More investments in renewable energy by Southeast Asia’s governments

More investments in renewable energy by Southeast Asia’s governments

Before the coronavirus pandemic, one of the main agendas of investors and policymakers in the Association of Southeast Asian Nations (ASEAN) was energy transition. The Government is so committed to reducing carbon emissions, which is well seen by investing in renewable energy infrastructure. Even though the construction activities have stopped due to the Government diverting funds towards the social expenditure, renewable sector investment will pick up quickly.

ASEAN governments have developed a five-year sustainability plan to boost renewable energy capacity and revive the most hit economies due to the Covid-19 pandemic. The plan is under the second phase of the ASEAN Plan of Action for Energy Cooperation (APAEC) 2021 to 2025. The ASEAN energy ministers agreed that renewable energy would take 23% of the total power supply and 35% of all installed energy capacity by 2025. This means that by 2025, renewable energy capacity would constitute 35GW to 40GW.  

In the Southeast Asian countries, 84% of the total installed renewable energy capacity comes from Malaysia, the Philippines, Thailand, Vietnam, and Indonesia. Among the leading countries is Vietnam with 34% share, the second one is Thailand with 17%, the third is Indonesia with 13%, Malaysia is the fourth with 10%, while the Philippines is the sixth with 10% share.

The Vietnamese Government plans to build a sustainable renewable energy capacity so as to cut carbon emissions by 15% by 2030, decrease the nation’s reliance on coal, and meet the ever-increasing power demand. So far, Vietnam has the highest number of installations with 13GW. Between the 2020-2025 period, Vietnam expects 70% of its new renewable capacity to come from hydropower and solar PV. The country also expects to generate 17% of renewable energy from wind, and 11% will be from biopower. In the 2021-2030 National development Plan, Vietnam targets to produce 50GW from offshore and onshore wind and solar power by 2030.

Among the most affected countries due to the pandemic is Singapore. Its total number of new grid-connected solar photovoltaic (PV) installations decreased by 52.1% yearly in the 2020 first nine months. Between January-September 2020, Singapore managed to build only 390 installations compared to 814 installations in the same period in 2019. In 2020, the Government planned to have an additional solar power from 350MWp to 2GWp by 2030 and 5GWp by 2050.

In 2020, the Indonesian Government also planned to increase its renewable energy share from 9% to 23% by 2025 and 31% by 2050. For the country to achieve this goal, it needs 10GW of renewable power by 2025. However, there are challenges such as power pricing issues and a lack of investments. The Government plans to give more incentives to boost hydropower and solar energy.