According to Frost & Sullivan’s Asia Pacific Program Manager for the Energy & Power Systems Practice, Suchitra Sriram, the existing “adder” policy for RE generated power in Thailand, and the ongoing discussions in Malaysia and the Philippines to introduce an effective feed-in-tariff policy in 2011 are likely to be major driving factors for renewed interest in this sector.
She adds, “Unlike Southeast Asia, there is a strong government commitment in North Asian countries to promote and increase the RE contribution in the country’s overall electricity mix. Hence, from time to time, RE policies and targets are revised to facilitate ease of doing business as well as to aggressively stimulate growth.”
The Australian RE market will continue to grow with the revised Renewable Energy Target (RET) stipulating 20.0% contribution of RE towards electricity mix by 2020 which was passed by the federal government in August 2009.
“This landmark bill is expected to attract investments of up to USD16.8 billion in various RE technologies, apart from creating more than 25,000 jobs in this sector alone. Moreover, this bill is considered to be a great starting point to encourage companies,” says Suchitra.
In terms of industry specifics, Asia Pacific’s RE market growth in 2011 will be largely driven by centralised large-scale plants in areas of wind, solar photovoltaic and biomass power. This is more pronounced in countries such as Thailand, Vietnam, South Korea and The Philippines.
The region’s wind power market is estimated to grow from 5806 MW in 2010 to 7553MW in 2011, mainly boosted by projects in Australia, Thailand and the Philippines. The interest of the project developers is shifting toward developing large-scale projects where the capacity of the wind turbines used are above 2 MW. In terms of revenue, the market size is estimated at US$3.89bn in 2011, doubling the market size of 2010.
“Investments in the wind power market which was centered on Australia, Japan and the Philippines a few years back, now has competition from new emerging markets in Southeast Asia such as Thailand and Vietnam, and also from Taiwan because of the identification of high wind potential in those countries,” Suchitra commented.
She continues, “So far, most of the wind power projects have been developed through private sector investment. However, realizing the huge untapped potential in the region as well as to diversify their portfolio mix, many leading utilities in Asia Pacific have initiated plans to invest in wind power plants.”
The Asia Pacific solar PV systems market is estimated to grow from 4624MW in 2010 to 6509MW in 2011. In terms of revenue, the market size is expected to increase from US$10.05bn in 2010 to US$13.81bn in 2011, posting an annual growth rate of 37.4%.
The main markets include Japan, Thailand, Australia, Malaysia and South Korea. Most of the projects that have been proposed and under construction are grid connected ones driven by the existing feed-in-tariff policy and other industry-specific incentives from the government.
“Almost 1 GW of solar PV was installed in Japan during 2010. The market outlook looks very positive and is expected to post another 1 GW in 2011. Besides Japan, this RE technology is expected to gain considerable traction throughout the Asia Pacific region and is expected to double its capacity additions in 2011 due to high resource availability, declining prices, and introduction of favorable solar credits and incentives,” says Suchitra.
She adds, “Moreover, the customers’ appetite for this modular technology remains strong especially in countries such as Japan, Australia, South Korea, and Thailand that have feed-in-tariff (FIT) and other rebates. There were several large-scale grid connected solar power plants that were announced in 2010 from leading project developers that are expected to come online in 2011.”
Other RE technologies that hold potential in Southeast Asia include biomass power generation as there is abundant resource availability at low cost and an increasing demand for onsite power from mill owners. It is estimated that only 3000MW has been utilised so far out of the total potential of 56,000MW in the region.
“With support from the government in the form of FIT, and tax incentives, this RE technology holds considerable market growth in the region. Encouraging foreign ownership of power plants with less than 10MW capacities will boost this underutilized industry,” Suchitra says.
On the other hand, geothermal power generation continues to attract investments in Indonesia and The Philippines, but the market growth rate is expected to be moderate between 5.0 and 8.0 percent.
Suchitra adds, “According to the second 10,000 MW crash program introduced by the government of Indonesia, geothermal power generation has been accorded high priority. But its success remains to be seen as some of the projects have not been able to get environmental clearances and faces opposition from environmental groups as they are to be developed in forest reserves.”
