November 20, 2019 Read More →

Solar power in Southeast Asia booming as costs drop below gas-generation

Solar Magazine: 

Southeast Asian nations are stepping up plans to invest in and deploy solar power as the cost has dropped below that for gas-fired power plants, according to analysts and government officials. The region, where power demand is expected to double by 2040, is striving to expand the share of renewable sources as developing nations seek affordable electricity while battling climate change.

ASEAN (Association of Southeast Asian Nations) members have forged themselves into leading industrial and export-driven manufacturing hubs in recent decades. They have been lagging behind when it comes to deploying solar and other emissions-free energy resources, however; that despite having committed to achieving UN renewable energy and climate change goals.

Regionally, Southeast Asia’s cumulative solar photovoltaic (PV) capacity could nearly triple to 35.8 gigawatts (GW) in 2024 from an estimated 12.6 GW this year, according to consultancy Wood Mackenzie. Expected to have installed a cumulative solar power capacity of 5.5 GW by the end of this year, 44% of the total, region-wide capacity, highlighted Wood Mackenzie power and renewables analyst, Rishab Shrestha. That compares with 134 MW last year.

Solar energy investment and deployment and potential varies widely across and within ASEAN members. Laos continues to boost its hydroelectric power capacity despite the ensuing degradation of water, fishing resources, community displacement and loss of traditional livelihoods. The Philippines continues to subsidize coal power and oil fuels for transportation despite their higher true costs and resulting damages to human and environmental health.

Solar energy investment and capacity deployment could be growing faster, some Singapore solar industry participants say, however. “It’s true that Singapore doesn’t have lots of land for project development…The good thing is the government of Singapore is doing its best to drive ‘solarization’ and clean energy in a step by step manner, but if you consider Singapore has 2 GW of solar power potential and you look at the level and speed of activity—around 200 megawatts-peak (MWp) of installed capacity—progress hasn’t been all that impressive,” said Atem Ramsundersingh founder and CEO WEnergy Global.

As positive and encouraging as all this is, Southeast Asian nations need to guard against a solar energy boom that results in way more solar and renewable power generation deployed than is needed or economic. The “mushrooming of solar PV in Vietnam has exceeded its grid capacity by 18%,” Wood Mackenzie’s Shrestha said, underscoring the need for further investments across other facets of the power sector. “The approved capacity for the Ninh Thuan and Binh Thuan provinces amounts to 5 GW, more than double the grid usable capacity,” he pointed out.

The same is true in the Philippines, according to the International Institute for Energy Economics and Analysis (IEEFA). “The government is in a position to change the longstanding status quo, which disproportionately puts fuel-price and foreign-exchange risk on consumers, while utilities and power generators remain insulated from market changes,” IEEFA Energy Analyst Sarah Jane Ahmed wrote in IEEFA’s Unlocking Rooftop Solar in the Philippines. “As a result, power suppliers have no incentive to transition away from coal and diesel or to hedge against price-change and currency risks.”

Electricity costs in the Philippines are the highest among the 10 ASEAN nation member countries at around 10 PhP/kWh (USD0.20/kWh). Much of that has to do with longstanding government fossil-fuel industry subsidies that transfer the fuel, currency and other socioeconomic and environmental risks and burdens of electricity generation, transmission and distribution from utilities and large independent power producers that have the ability to manage them to everyday Filipinos, many of whom live at marginal, subsistence levels, IEEFA highlights in a March 2019 research report.

More: Southeast Asian Solar Power Set to Surge as Costs Drop Below Natural-Gas Generation

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