The renewable energy market in Southeast Asia is expected to grow at a CAGR of 7.3% during 2020-2025. In Southeast Asia, power generation sector is dominated by coal-fired power generation. However, the renewable power generation and the battery costs registered a significant decline in recent years, which, combined with drying up of the finances for coal-fired power plants, is expected to drive the renewable sector in the region. The impact of COVID-19 on the economics, power consumption, and renewable sector supply chain is expected to restrain the renewable energy market in the region during the forecast period.
- Southeast Asia is becoming one of the fastest-growing solar energy markets and one of the most promising regions in the global expansion of the solar energy industry. In 2019, Vietnam and Malaysia were at the forefront of this movement, with the highest amount of new PV capacity installed in the region.
- With the increasing growth of renewable energy, reliable and efficient technologies, such as blockchain, are expected to have higher adoption in the Southeast Asian region during the forecast period.
- Vietnam has a high potential for renewable energy, including hydro, solar, wind, biomass, and waste. Biomass and hydro power are the two major sources of renewable energy that are currently being used in Vietnam. The country’s ambitious goal to produce 23% of the total power generation from renewable sources, coupled with supportive government policies and schemes, is expected to drive the solar photovoltaic (PV) market in Vietnam during the forecast period.
Key Market Trends
Solar Energy to Witness Significant Growth
- Southeast Asia is becoming one of the fastest-growing solar energy markets and one of the most promising regions in the global expansion of the solar energy industry.
- In 2019, Vietnam and Malaysia were at the forefront of this movement, with the highest amount of new PV capacity installed in the region.
- The increasing demand for electricity, the abundance of the solar resource in the region, and the favorable renewable-related policies are some of the factors that have been favoring the growth of the solar power industry in the region.
- In addition, policymakers across different countries in the region have been intensifying their efforts to ensure a secure, affordable, and sustainable pathway for the energy sector, which includes action to facilitate investment in solar power generation and infrastructure.
- For instance, Thailand increased its solar installation to nearly 3 GW, owing to its Adder program introduced in 2006 and subsequent Feed-in Tariff (FiT) program. However, recently, the Thai government announced that it will not procure any new solar (and wind) projects for the next five years, asserting that solar (and wind) had put upward pressure on wholesale electricity rates. The announcement was likely driven by the current overall overcapacity in Thailand’s power market, which is expected to be further exacerbated with approximately 5 GW of new gas-fired plant capacity planned to come online in the next few years.
- Southeast Asia’s cumulative solar photovoltaic (PV) capacity could nearly triple to 35.8 gigawatts (GW) by 2024 from 11.14 GW in 2019. This is supported by the high solar power generation target by different countries. The region is expected to witness the development of floating solar photovoltaic (PV) power plants over the next 5 to 15 years, as countries in the region are looking to substantially increase their share of renewable energy in the power mix. Moreover, development plans are in progress, particularly in Thailand and Vietnam, while smaller utility-scale floating PV developments are being proposed in Indonesia, Singapore, and Myanmar.
Vietnam to Dominate the Market
- Vietnam has a high potential for renewable energy, including hydro, solar, wind, biomass, and waste. Biomass and hydropower are the two major sources of renewable energy that are currently being used in Vietnam. Despite the huge potential, renewable energy accounted for less than 1% of the total primary energy consumption in 2018. However, the country's ambitious goal to produce 23% of the total power generation from renewable sources, as well as the supportive government policies and schemes, are expected to drive the solar photovoltaic (PV) market in Vietnam during the forecast period.
- Vietnam had 82 solar power plants in operation, with a total capacity of approximately 4.46 GW as of June 30, 2019, far exceeding the target plan of only 850 MW of solar power in 2020 that was approved in the Power Development Master Plan VII (PDP VII). By the end of 2019, 13 more solar power plants with a combined capacity of 630 MW were scheduled to be connected to the grid, raising the total number of the country’s solar power plants to 95.
- Vietnam has enormous potential for the development of wind energy projects, having a coastline of over 3,400 km with average wind speeds ranging from 4.5 m/s in the onshore area to 10 m/s in certain offshore areas. The country apart from the wind potential also has a high degree of solar irradiation, which in some areas can exceed 4 kWh/m²/day on average. The potential for the development of wind and solar power in Vietnam has been estimated to be over 600 GW in aggregate.
- Vietnam has a huge potential for both onshore and offshore wind due to a confluence of geographic, economic, and political factors. The Vietnamese government, under the Power Master Plan VII, has planned to increase the capacity of wind power plants to 800 MW by 2020, 2,000 MW by 2025, and 6,000 MW by 2030. This is expected to bring in huge opportunities for the wind power market, which is expecting stable demand for the next decade in Vietnam.
- As of 2018, the onshore wind installed capacity in Vietnam was only 229 MW, although up to 80 further wind projects are registered with the Ministry of Industry and Trade (MOIT), reflective of the rush to market as developers seek to benefit from the increased FITs for projects operational by 2021.
- However, the outbreak COVID-19 pandemic is expected to restrain the growth momentum of the renewable energy market in the country till the mid of 2021, owing to the disruption in supply chain, lockdowns, and due to the financial losses incurred amid lockdown causing companies to decrease the investment in new projects.
- However, after the COVID-19 situation, the ambitious renewable energy target is expected to drive the market in the country.
Some of the major companies involved in Southeast Asia Renewable Energy Market include Sindicatum Renewable Energy Company Pte Ltd, Trina Solar Limited, Jinko Solar Holding Co Ltd, B Grimm Power PCL, San Miguel Corporation and others
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Table of Contents
1.2 Market Definiton
1.3 Study Assumptions
4.2 Southeast Asia Renewable Energy Mix, 2019
4.3 Renewable Energy Installed Capacity and Forecast in GW, till 2025
4.4 Recent Trends and Developments
4.5 Government Policies, Targets, and Regulations
4.6 Market Dynamics
4.7 Supply Chain Analysis
4.8 Industry Attractiveness - Porter's Five Forces Analysis
4.8.1 Wind Power Sector
4.8.2 Solar Power Sector
4.8.3 Hydro Power Sector
5.1.5 Other Types
5.2.6 Rest of Southeast Asia
6.2 Strategies Adopted by Leading Players
6.3 Company Profiles
6.3.1 Canadian Solar Inc.
6.3.2 JinkoSolar Holding Co. Ltd
6.3.3 Sindicatum Renewable Energy Company Pte Ltd
6.3.4 Trina Solar Limited
6.3.5 San Miguel Corporation
6.3.6 B Grimm Power PCL
6.3.7 PT Sumber Energi Sukses Makmur
6.3.8 Thanh Thanh Cong (TTC) Group
6.3.9 BCPG Public Company Limited (BCPG)
6.3.10 Gulf Energy Development PCL