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Southeast Asian Solar Power Set to Surge As Costs Drop Below Natural-Gas Generation Jul 02, 2020

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

By Andrew Burger-20, 2019

Southeast Asian nationsare 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.

ASEAN Renewable Energy Targets by Country

Regionally, Southeast Asia’s cumulative solar photovoltaic (PV) capacity could nearl 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 ShresthaSolar Magazine Interviewee Avatar. That compares with 134 MW last year.

Solar power progresses across Southeast Asia

In addition, Malaysia recently completed a 500-megawatt (MW) solar power auction via which a bid for 365 MW of new solar capacity came in below the average cost of building natural gas-fired power plants, Minister of Energy, Science, Technology, Environment and Climate Change Yeo Bee Yin highlighted. The country intends to carry out at least one more-500 MW tender in next year’s second quarter, Yeo said.

More broadly, Malaysia intends to increase its renewable energy for electricity generation from 6% at present to 20% by 2025. The majority is expected to be solar power. “For the first time in the history of Malaysia we have a large-scale solar energy costs that is less than gas,” Yeo said at Singapore International Energy Week. “We now finally have an alternative energy that is cheaper than gas to replace our peak energy demand at midday.”

Another regional industrial and trading leader, Singapore set a goal of installing at least 2 GW of peak solar power capacity by 2030—more than 10% of current peak electricity. Natural-gas power generation supplies 95% of Singapore’s national generation capacity at present. Installing 2 GW of solar capacity could potentially replace that with emissions-free, solar power capacity, Wood Mackenzie Power & Renewables points out.

“This being presented by the (Singaporean) authorities is very interesting as this points towards firm political determination to go towards a low-carbon economy in a constrained world,” added Francesco La Camera, Director-General of International Renewable Energy Agency (IRENA). Furthermore, “There need to be some good measures to ensure that investors feel confident that their money could be returned in a relatively reasonable period,” said Keisuke Sadamori, the International Energy Agency (IEA) director for energy markets and security.

Varying solar power deployment and investment across Southeast Asia

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.

Leading industrialized ASEAN members, such as Thailand, have focused on supporting utility-scale solar, while deployment of smaller-scale solar-plus-storage home systems and microgrids have taken the lead in other, less industrialized countries, such as Indonesia and Myanmar. A mix of utility and small-scale solar-plus storage has and is being installed in the Philippines and Cambodia.

Solar in Singapore

Singapore is also concentrating on developing and deploying floating solar power. Singapore’s national water agency, the Public Utilities Board (PUB), in June announced it aims to seek out “private sector participation to deploy a 50-MWp floating solar PV system on a national reservoir by 2021,” Jasper WongSolar Magazine Interviewee Avatar, the head of Construction and Infrastructure, Sector Solutions Group for United Overseas Bank’s (UOB) Wholesale Banking Group, pointed out in an interview. “The floating solar energy system will eliminate the need to emit 28,000 metric tons of carbon dioxide every year it is in operation—the equivalent to removing 6,000 cars off Singapore’s roads,” he said. Reindl also highlighted that concerns and commitments to reduce greenhouse gas (GHG) emissions and stem the tide of rising global mean temperatures prompted the Singapore government to introduce a carbon tax in January. The carbon tax rate has been set at S$5 (~USD3.68) per metric ton of equivalent carbon dioxide emissions (tCO2e) from 2019 to 2023. Government authorities intend to review the carbon tax rate by 2023 with an eye towards raising it to S$10–S$15 (~USD7.35–11.03). “This will contribute to leveling the playing field in the energy sector,” Reindl told Solar Magazine.

Ongoing support for coal and natural gas power generation

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.


Philippine Solar Companies Urge Distribution Utilities to Shift to Solar Energy


The passage from:https://solarmagazine.com/southeast-asian-solar-power-surging-costs-drop-below-natural-gas-generation/

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