The economic growth between 2011 and 2017 drives the consumption of electricity in ASEAN by 6%. Cambodia, Lao PDR and Myanmar show double-digit growths in the same period by 14%, 14% and 21%, respectively. As part of its industrial growth, Vietnam is expanding its power system more rapidly compared to its ASEAN neighbours. With the energy demand growing at 11% annually, Vietnam’s power generation doubled to 220 TWh by 2018 from 2011. However, millions of people in ASEAN still lack access to reliable electricity. Other goal is toward 23% renewable energy in energy mix (including power sector), therefore an update of plans and the progress of renewable-based power plants in ASEAN are important to be highlighted.
In this energy insight, we would like to provide you with an analysis of ASEAN’s power sector during the first quarter of 2019. The analysis is based on information collected from the weekly news clippings, with focus on updated progress of electricity access, national power development plans, and renewable energy development in ASEAN.
Progress on ASEAN’s Electricity Access
ASEAN moves closer towards 100% electricity ratio, but some Member States still need intensified efforts.
The Indonesian electrification ratio in 2018 reached 98.3 per cent, showing a continuous growth from 84.3 per cent in 2014. Previously, the ratio stood at 95.3 per cent in 2017, 91.2 per cent in 2016, and 88.3 per cent in 2015. As a large archipelago, the country’s geographical issue is its greatest challenge, but the Government of Indonesia (GoI) has implemented their action plans that include among others deploying diesel generators and low energy-solar lamps. The plans however still need to address the issues of long-run affordability, reliability, and power quality.
In line with progress of Indonesia, Vietnam has achieved nearly 99 per cent electrification ratio with relatively low cost in comparison to neighbouring countries, according to the Ministry of Industry and Trade (MoIT). This achievement is contributed by its hydro- (83 TWh) and coal-based (92 TWh) power plants.
In Myanmar, the electrification ratio reached 44% in December 2018. The government announced in April 2019 that soon seven regions and states will get electricity access under the National Electrification Plan. About 6.33 million out of 10.87 million households have currently no access to electricity. This is a good progress for Myanmar—who is currently still behind other ASEAN Member States (AMS) in terms of electricity access–, as it taps half of its population with electricity access.
Meanwhile, the Philippine’s electricity access reached about 90%, with the government urging to speed up electrification ratio in rural areas through the affirmation of 100% electrification goal from the Philippine Department of Energy (DoE). In the Philippines, about 2.7 million households are still without electricity in spite of the billions of funds spent on the efforts. To achieve 100% electrification goal, the government mobilised the support of distribution utilities, the electric cooperatives, and all other stakeholders.
Updates on National Power Development Plans
ASEAN is gearing towards greener planning, with more renewables incorporated into their power development plans
More renewable energy (RE) is seen in Thailand’s National Power Development Plan (PDP). The PDP targets to have 35% of non-fossil generated power in the total power capacity by 2037, while coal-fired power plants will be reduced to 12%. In this new version of PDP (2019), the government also targets 8,300 MW to be generated from commercial operations dated in 2025 – 2030.
As a leading country in solar and wind power in ASEAN, Thailand made an excellent progress in renewable development, by reaching 3 GW of RE-generated power in 2011-2017. As a current importer of hydropower, Thailand is very keen to implement renewable energy projects and energy conservation plans. We believe with such plan, other ASEAN Member States (AMS) can replicate it and together they could look forward to have 23% renewable energy in ASEAN’s energy mix.
Meanwhile, through an update of its strategic plan, Lao PDR is expected to be the regional hub for electricity transmission by 2025. The new strategic plan sees Lao PDR as the network centre for a regional electricity transmission system by 2025. It is expected that within the next six years, Lao PDR could export 200 MW to Cambodia; 500 MW to Myanmar; 9,000 MW of electricity to Thailand; and 5,000 MW to Vietnam.
Initiatives on Regional Electricity Cooperation is Still Centred in Mekong Sub-region
Hydropower projects and Strengthened Grid Infrastructure are the focus of ASEAN Power Grid in Q1 2019.
A growing concern over upcoming hydropower projects (2020) is inevitable in Lao PDR. Shortly after the dam accident, Lao PDR has been quite responsive in improving the safety regulations for the construction and operation of dams. Lao PDR has been actively promoting the “Battery of Asia” policy, which promotes energy security to the neighbouring Member States such as Cambodia, Myanmar, Thailand, and Vietnam.
While Lao PDR is growing with hydro-electricity, its neighbours such as Cambodia, Myanmar, and Vietnam, allocated immense investment in new power plants and transmission lines. In Vietnam, Vietnam Electricity (EVN) has started a 500-kV back bone line to connect Quang Trach plant to the national power grid. This project aims to resolve the power shortage issue in the southern region of the country by 2021. In Cambodia, the government signed an agreement on energy imports in December 2018 with Lao PDR and extends the grid infrastructure to five provinces in order to electrify all Cambodian villages by 2020. In Myanmar, the Electricity Supply Enterprise and 12 tender-winning companies just signed agreements for the national electrification projects with the aim to reach 55% of electrification rate by 2021.
Apart from the fast-paced electricity infrastructure development in the Mekong sub-region, other cooperation are emerging in the Malay Peninsula. Malaysian-based Ranhill Holdings Berhad (Ranhill) and Thailand-based Treasure Specialty Company Ltd (TS Co) are exploring the opportunity to develop a 1,150-MW combined cycle gas turbine power plant in Kedah for power export from Malaysia to southern Thailand.
Variable Renewable Energy in Each National Power System
Solar booming in ASEAN allows more attractive mechanisms and development of advanced technologies.
In the 1st quarter of 2019, several large-scale ground-mounted solar projects have been commissioned in ASEAN, such as the 30.8-MW solar farm by B.Grimm Power Plc in Thailand, 65-MW solar farm by Scatec in Malaysia, and over 550-MWp solar project in Vietnam. The Vietnamese government commissioned a 100-MWp solar farm in Dak Lak Province, a 64-MWp solar farm in Ninh Thuan Province, a 70-MWp solar farm in Tay Ninh Province, and a 350 MWp hybrid solar and wind farm in Ninh Thuan Province.
In February 2019, the Malaysian government opened the bids of the 3rd round of Large-Scale Solar (LSS3) scheme with the total target capacity of 500 MW, and the quota offered to the developer will be increased to 100 MW from 30 MW in the previous round. Such progress with variable renewable energy (vRE) continues aggressively in Thailand, Vietnam, and Malaysia, which consequently supports the Member States’ energy self-sufficiency. Indeed, these upcoming solar projects are good for reducing the emissions caused by fossil-based power plants, however, their up-front costs and intermittency issues are calling for ASEAN utilities’ attention.
To be more innovative, ASEAN’s policymakers have started to look at other mechanisms to encourage renewable energy development. Those new mechanisms include a peer-to-peer trade to catalyse the national solar rooftop market through net-energy metering (NEM) in Malaysia, and direct consumption-direct supply method in Vietnam, which is written under the Decree No. 02/2019/QD/TTg. The changes in the Decree allow buyers and sellers to directly or separately pay the electricity from the project sellers or the power grid respectively.
Those mechanisms are driven by the development of rooftop solar photovoltaic (PV) in different AMS. Cache Logistics signed a contract with Sembcorp for 7.9MW of rooftop solar projects in Singapore. The 7.9MW of PV capacity will be installed on warehouses including the Commodity Hub, Pandan Logistics Hub and Cache Changi District Centre. When completed, Commodity Hub will house Singapore’s largest rooftop solar facility to date, standing at roughly 6.2MW capacity. In Vietnam, solar rooftop panels ease thirst for power and its promotion. Ho Chi Minh City alone has seen over 748 rooftop solar power owners registering to sell their surplus electricity to Ho Chi Minh City Power Corporation, with a combined capacity of 11.55 MWp. It sets a target to restructure power usage with a higher rate of renewable energy (1 to 1.74 per cent) of the city’s total consumption. Korea and Malaysia co-pilot a USD-7 million virtual power plant system. South Korean utility Busan City Gas collaborating with Malaysian utility Tenaga Nasional Berhad to develop a virtual power plant to integrate and test an energy storage system with solar technology over a period of 30 months.
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