Investment Potential in
Southeast Asian Renewables - Regional Trends
Fossil fuel power plants are
the largest contributors to greenhouse gas emissions. Rising concerns about
pollution and limited energy reserves have increased the emphasis on
renewable energy development. Southeast Asia, due to its abundant natural
resources and favorable topography, has immense potential in terms of energy
production from renewables. In Southeast Asia, the mature renewable
technologies include geothermal, biomass and small hydropower, whereas solar
photovoltaics and wind energy are classified under emerging technologies.
Chart 1.1 shows the installed capacity by renewable energy type in
Southeast Asia in 2008.
Southeast Asia is experiencing healthy expansion in terms of economic
growth. Additionally, there is an increasing rate of urbanization in these
countries which implies higher energy consumption. Due to the inability of
conventional coal powered plants to provide for the growth in energy demand,
renewable contracts are being promoted. Also, many regulations have been
brought into effect on a country-wise basis to increase the composition of
renewables in energy production – one of the key legislations being the
Renewable Energy Act of 2008, which was passed in The Philippines recently.
• Indonesia’s revenue contribution is mainly due to capacity additions in
geothermal power. It has large potential in geothermal due to its
• Wind power potential is restricted to the eastern parts of Indonesia.
• The Indonesian government removed fuel subsidy for stand-alone generating
sets to promote solar homes.
• Maximum number of small hydropower installations is in Indonesia.
• The Philippines holds the largest potential (76000 MW) for wind energy
among the Southeast Asian countries. Many projects are expected to be
commissioned during 2010-2011. Northpoint Wind Power Corp is building a 40MW
wind farm in The Philippines which is considered to be the largest in
Southeast Asia. The project is being financed by Japanese, Danish and
Spanish investors. Investor interest in Southeast Asian renewables is
growing as bigger projects are being drawn up.
• Solar power technology support project initiated by The Philippines
national oil company has been instrumental in providing power to the
agrarian communities. Yet, the market is not as strong as it is in the other
countries in this region.
• They have abundant biomass resources and installed capacity is expected to
reach 161 MW by 2014.
• The Mini-hydro law provides significant incentives to promote small
hydropower projects in The Philippines.
• In case of geothermal energy, The Philippines are the second largest
producer in the world.
• Singapore is exposed to sunlight all year. Efforts are underway to adopt
the use of building integrated PV systems in tall-rise buildings. Revenue
contribution is likely to rise during the forecast period.
• Singapore is also largely involved in utilizing municipal waste to produce
• Overall, the contribution of biomass, small hydropower and geothermal
energy is negligible to Singapore’s renewable energy.
• Wind energy market is expected to increase owing to installation in new
location with wind potential.
• Thailand has the largest installed capacity in Southeast Asia for solar
PV. They have set up ‘Solar Energy Park’ to promote solar energy. Thailand
has a target of achieving 85 MW by 2011.
• They represent the largest biomass market in this region with an installed
capacity of 1761.29 MW in 2007.
• The department of alternative energy development and efficiency is
promoting micro small hydropower projects.
• Wind power potential is insignificant in Malaysia.
• Like Singapore, Malaysia is also blessed with sunlight almost throughout
the year which makes the solar PV market very lucrative. The government is
actively promoting the use of building-integrated PV systems.
• The country has abundant biomass resources but the uptake from private
sector to use biomass in power generation has been limited.
• Small-hydro projects are being promoted by way of incentives for equipment
imports and many projects are underway due to a renewed interest in hydro
• Small wind power projects are likely to come up in the central parts of
Vietnam which has an otherwise negligible wind power market.
• Vietnam has widely uses off-grid solar PV systems but the revenue
contribution is low.
• Biomass resources such as wood residues, crop residues and livestock waste
are abundant in Vietnam.
• Vietnam is the most lucrative location in Southeast Asia for small
hydropower as it has large water bodies. Incentives from the government and
other private investments are driving the market growth.
Equipped with a favorable topography, Southeast Asia is a naturally
promising location for promoting renewable power generation. Further
supporting legislations, environmental concerns and international interest
in Southeast Asia’s potential is expected to increase the attractiveness of
renewable energy as an investment option during the forecast period and
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