South East Asia on the cusp of a solar boom in 2019

January 25, 2019

The Southeast Asian renewable energy sector is expected to see installed capacity triple in 2019, according to Rystad Energy’s annual outlook report, as Vietnam’s energy transition kicks into high gear.

 “2019 is shaping up to be another red hot year for renewables in the Asia Pacific,” said Rystad Energy Senior Analyst David Dixon.

A graph showing the South East Asia Solar Pipeline in MWAC from 2015 to 2021. Source: Rystad Energy RenewableCube

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Rystad Energy, the independent energy research and consulting firm headquartered in Norway with offices across the globe, recently published its South East Asia Renewables Outlook for 2019.

In Vietnam, government incentives introduced in 2017 have successfully attracted 20 GW of large-scale solar developments in the pipeline, matched by a wind pipeline of another 20 GW. For perspective, installed power-generation capacity in Vietnam currently amounts to around 42 GW.

“Developers are rushing to finish solar power plants in Vietnam in order to meet the feed-in-tariff (FiT) deadline of 30 June 2019, with 40 large-scale solar power plants currently under construction and expected to be connected to the grid by this date,” said Rystad Energy Analyst Minh Khoi Le.

Four of these large-scale projects – Dau Tieng Phases I & II, BIM phase II, Trung Nam and CMX Sunseap – are each bigger than the largest existing solar power plant in South East Asia (132 MWp). The country should also see a number of wind power projects go into construction, according to Rystad Energy.

“The main concern in Vietnam is the risk of grid overload once these plants are completed. EVN, the country’s only utility company, will need to find more free space in the grid, or these plants will not be producing to their designed capacity,” Minh added.

The most anticipated event for Vietnam’s renewables energy market in particular, and for the region in general, will be the country’s updated solar power policy following the conclusion of the current FiT this June.

“With Vietnam’s energy demand set to grow rapidly over the next decade and the success of the FiT scheme in attracting foreign investment and expertise, it is expected that the Vietnamese government will announce a policy update in the first half of 2019 to continue incentivizing PV development in the country. We expect this to be a combination of auction mechanisms and corporate power purchase agreements in Vietnam,” Minh added.

Farther south in the region, Australia’s project pipeline continues to grow at a rapid pace at the front end, while construction and commissioning continues on more than 5 GW of solar and wind projects. With a federal election to be held by May, all eyes will be on Canberra and the possibility of a national energy policy post-2020.

Meanwhile Malaysia will see its third large-scale solar auction (LSS 3) taking place during 2019. The government stated last autumn that the targeted capacity was for 500 MW.

“Experience from the first two rounds of LSS auctions has shown they were significantly over subscribed.  Another key trend is that the government consistently approves more capacity than targeted,” Dixon said. “With two years since the last auction and bids expected to be cheaper due to the declining cost of solar, it is expected that this trend will continue.”

In the Philippines, the largest development likely to be commissioned in 2019 is the 150 MW Concepcion I in Tarlac. In Indonesia, overall growth is expected to be muted due to policy uncertainty.

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Contacts

David Dixon
Senior Analyst, APAC Renewables
Phone: +61(0) 405 306 822
david.dixon@rystadenergy.com

Minh Khoi Le
Research Analyst, Renewable Energy
Phone: +61 (0) 28 06 78 468
Minh.Khoi.Le@rystadenergy.com

Morten Bertelsen
Media Relations
Phone: +47 951 98 742
morten.bertelsen@rystadenergy.com

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