High-potential South East Asia solar markets expected to overcome inflated prices and policy uncertainty
Solar photovoltaic (PV) technology’s momentum in the high-potential South East Asia region, spurred by the benefits it brings in terms of meeting decarbonization goals and giving more efficient power networks, can enable PV to overcome new setbacks such as rising prices and kinks in the supply chain.
This was the message to emerge from “Solar International Dialogue of South East Asia. Strategizing PV in SEA – Next Chapter”, a webinar organised by the Global Solar Council (GSC) and hosted by the Asian Photovoltaic Industry Association (APVIA). As part of the GSC Task Forces on Emerging Markets and introduced by Prof. Sulaiman Shaari, Secretary General of the APVIA, the event brought a timely update and forward-looking analysis on the situation of the dynamic solar PV markets in South East Asia.
Solar PV experienced explosive growth in recent years in South East Asia, making the area one of the highest potential markets globally, as countries actively look to accelerate the transition to green energy. Regional industry experts addressed how solar PV can resist short-term headwinds and what policies are needed to sustain investment until the dynamics of geopolitics and global economy help readjust prices on a downward trajectory in the mid-to-longer term. There is no doubt solar PV is set to play a leading role in South East Asia through competency, education and awareness involving various actors in society.
“A new energy crisis is unfolding, with electricity prices reaching levels never imagined,” said Jose Donoso, Chairman of the GSC. “Solar PV prices are experiencing an upward trend as well, along the entire supply chain. Whether such increase is structural or temporary, though, solar PV remains key to lowering energy costs. We see very dynamic, high-potential markets in South East Asia and it is important to ensure they are sustained by enabling policies and to avoid the rise of additional barriers to its deployment.”
Septia Buntara, Manager at the ASEAN Centre for Energy (ACE) explained: “The Association of Southeast Asian Nations includes 10 countries representing more than 650 million people. Here, energy demand is projected to increase by 150% by 2040. Without clear and pragmatic policy targets for renewables, this will be met with fossil fuels and the group will become net importer of oil by 2025 and gas by 2030. Considering that solar PV’s levelized cost of energy is set to decrease significantly, it will be key for achieving the ASEAN’s target of 35% renewables share in total installed power capacity by 2025.”
“Regional and national targets, feed-in tariffs and auctions, and the declining costs of renewables are all drivers of solar power growth in SEA”, added Dr. Tharinya Supasa, Project Leader, Clean, Affordable, and Secure Energy (CASE), which provides evidence to inform governments’ transition strategies. “Solar PV’s growth requires support through increased access to finance, integrated grids, deregulation and policy schemes, capacity building for the power sector’s stakeholders. The good news is all major markets in the region have renewables targets, net metering and tax incentives already in place.”
The role of education is increasingly important, as clarified by Dr. Worajit Setthapun, Dean of the Asian Development College for Community Economy and Technology (adiCET), Chiang Mai Rajabhat University, Thailand. Renewables are multidisciplinary topics and many universities in the region are active with different solar PV projects allowing students to learn, monitor data, get to know the technology and ultimately embracing it as normal in their lives. “Students’ enhanced awareness allows them to understand renewables and assist community development for a responsible power production and consumption”, said Setthapun. “Collaboration and sharing resources among universities are essential.”
“SEA is particularly vulnerable to climate change, with rising sea levels, more frequent extreme weather, storms and droughts already heavily impacting the region,” said Dr. Nguyen Thi Anh Phuong, CEO of Tona Syntegra Solar JSC, Viet Nam. “That is why sustainability is a core element of ASEAN energy planning.” Here, solar PV is expected to grow at more than 10% CAGR through 2040 also exploiting opportunities such as rooftop and floating, but there are some challenges for the long-term green objectives: legal and policy uncertainty, short electoral cycles, current increased cost. Above all, Nguyen Thi Anh Phuong remarked: “we risk long-term trade-offs in quality, safety and reliability if we rush for quick short-term deals: capacity is only one factor, sustainability has to be taken into account rather than profitability only.”
The recently issued 6th assessment report of the Intergovernmental Panel on Climate Change “is all bad news,” recalled Steve Blume, President of the Smart Energy Council (SEC) Australia, “but we have the technology to intervene. Political will is needed, especially at COP26, because the next decade is critical if we want to be on track for the 2050 targets. Solar PV needs planning, training, collaboration and commitment. It is also a financial issue, and the progress that is being made for carbon pricing in many areas of the world will help level the playing field with fossil fuels.”
As extreme weather events cause disruptions and outages in many countries’ power grids, distributed generation is gaining momentum, which helps also considering the intermittency of renewables like solar PV. “The key to avoiding problems for the grid is to generate power as close as possible to where it gets consumed,” said Mr. Frank Haugwitz, AECEA Co. Ltd., Hong Kong
As urbanization increases, “we have to get solar into the cities,” observed Prof. Armin Aberle, CEO of Solar Energy Research Institute of Singapore “Rooftops are the best solution as they allow to not sacrifice land for food production. In order to really exit the Covid crisis we need to create millions of local jobs, and solar PV can definitely help with that: to counteract the inflated prices, every country should produce its own panels.”
Solar PV is versatile and can have huge implication for food production, aquaculture, and water management. Ultimately, it can help countries achieve greater self-sufficiency and resilience to external shocks. This is the unique value-added of solar power: it is good for the grid, good for the economy, and good for environment.
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The Global Solar Council (https://www.globalsolarcouncil.org) is the voice of the world’s solar energy industry, a non-profit body based in Washington D.C. representing national, regional and international associations as well as leading solar sector corporations. Founded at the 2015 Paris climate conference as a private-sector response to the climate emergency, the Global Solar Council brings together associations from both established and emerging markets that represent companies all along the solar supply chain.
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