In our first energy insight earlier this year, we analysed how ASEAN progressed with renewable energy (RE) in 2018. We learned that so far ASEAN has put serious efforts to implement RE in the region and will continue to do so by among others, setting more ambitious RE targets, driving more investment through new financing options, bolstering collaborations, and exploring new technologies.
The first quarter (Q1) of 2019 has passed, and looking at the number of new advancements in the area of RE in ASEAN as reported in the news we collected during that period, we expect ASEAN RE to continue to flourish even more this year. RE is one of the most reported subjects under energy news from across ASEAN. The stories and updates in the media amounted to almost 29% of the total news we collected in Q1 2019. In this energy insight, we aim to update you on how RE was progressing in Q1 by analysing the news highlights.
Solar Energy is Looking Rosy in ASEAN
The declining costs of solar photovoltaics (PV) modules and battery storage has given a boost to solar market in ASEAN. It is true that the overall system cost of installing solar system is highly influenced by where it is located and may vary across the region, but our recent levelised cost of electricity (LCOE) study shows that the cost is also declining in ASEAN, even reaching grid parity in several Member States. Solar has reached grid parity in the Philippines and Singapore, and soon in Thailand too if the equipment costs can be brought down.
Vietnam has also joined the other ASEAN Member States (AMS) in pushing solar development by revising its feed-in-tariff (FiT) incentive scheme early this year. Following a proposal from the Ministry of Industry and Trade, the FiT will be differentiated by regions, higher for cloudy region in the north and lower for sunny region in the south. The tariffs range from USD 6.59 to 9.85 cents/kWh, and would apply starting 1 July 2019, replacing the current fixed rate of USD 9.35 cents. The rates, paid by the state-owned utility Vietnam Electricity (EVN) for those who contribute solar power to the electricity grid, would also differ depending on the category, ranking from highest to lowest: household solar panels; floating solar system; and ground PV with a capacity of more than 1 megawatt-peak.
The RE sector is also increasingly attractive for investors in Cambodia as an outcome of the Kingdom’s largest solar energy project which is soon to be running this year. The 60-MW solar farm in Kampong Speu will be the second solar farm in Cambodia after the 10-MW in Svay Rieng province’s Bavet City which has been operational since last year.
Another update came from Singapore where the country will have one of the world’s largest offshore floating solar system along the Straits of Johor. Developed by Sunseap Group, the 5-MW-peak system will generate about 6,388 MW hours of RE annually, capable of powering about 1,250 four-room flats, and reducing greenhouse gas emissions by about 2,600 tonnes every year. The project is estimated to be completed later this year. Similar to Singapore, Thailand has also gotten its hand on the floating solar technology in their dams and reservoir. The state-owned Electricity Generating Authority of Thailand (EGAT) will start installation of floating solar panels in April at five hydropower plants in five provinces. The 45-MW floating solar in Sirindhorn dam is now on progress and will be commercially operational in 2020.
As ASEAN front-runner in solar installed capacity, Thailand also begins to plan for recycling plant of solar cell. With the current solar installed capacity of 3 MW in the country, the Thailand Industrial Works Department calculates the volume of solar panels to expire in 5-10 years will reach 500,000 tonnes or 18 million solar panels.
Wind Power Market Starts to Kick-in in Vietnam
Good news on wind energy is coming from Vietnam. The Ministry of Industry and Trade (MOIT), Vietnam, has issued Circular No. 02 as an updated guideline for onshore and offshore wind power projects in the country. This guideline will replace the previous regulations as substantial revisions have been made with stricter requirements for projects.
Last year in September, under Decision 39/2018/QD-TTg by the Prime Minister, the FiT for wind power has also been revised from USD 7.8 cents/kWh to USD 8.5 cents/kWH for onshore generation and 9.8 USD cents/kWh for offshore generation. Since the decision come into force, local authorities have received a number of proposals on wind power projects. So far, there are a total of 7,000 MW of wind power project proposals submitted for approval in the master plan. Looking at the increasing domestic electricity demand in the future and the effect of the revised regulation, wind power market is expected grow fast in Vietnam.
Waste-to-Energy as an Emerging Potential in ASEAN
Waste issue is arising across ASEAN with the increasing amount of waste coupled with poor waste management, which begins to cause health and environmental problems in several ASEAN Member States (AMS). Most of AMS are still using landfill to store their wastes, but the environmental impacts of this are becoming more pressing. The AMS are seeking solutions to this problem, among others by pushing waste-to-energy (WtE) technologies through incentives.
Thailand, for example, has established subsidies and tax incentive for various WtE plants which include incineration, gasification, fermentation and landfill gas capture. The country has also set 500 MW as target for WtE in the new Power Development Plant 2018-37, which represents 30% of total RE resources by 2037. The tentative FiT given for the WtE plants is THB 3.66/kWH.
In Vietnam, WtE projects in big cities are appealing to investors. Several municipal authorities have accepted WtE plant projects and called for investment from different economic sectors. Ho Chi Minh City Municipality has released a set of criteria for investing in WtE project to process huge volume of domestic waste up to 9,300 tons per day. The government has set a high electricity purchasing price for WtE up to USD 10.05 cents/kWh, which is even higher than prices for wind and solar powers.
On the other hand, Malaysia will have its first WtE plant in operation in June this year. Located in Tanah Merah, Negeri Sembilan, the project is planned to handle 1,000 metric tons of solid waste daily and to produce 20 to 25 MW of electricity to power 25,000 households.
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