Vietnam is leading Asian growing solar PV market
SOUTH-EAST Asia’s cumulative solar photovoltaic (PV) capacity is expected to triple within the next 5 years, with large-scale solar projects dominating installation capacity before distributed solar installations pick up as project economics start to become more attractive, an energy consultancy group said.
Even though Asean is still an “emerging region” in solar PV installations, cumulative solar PV capacity is expected to hit 35.8 gigawatts (GW) in 2024, up from an expected rate of 12.6 GW for 2019, Wood MacKenzie said.
By 2024, small-scale solar should account for 32 per cent of the capacity additions, WoodMac said.
Within South-east Asia, Vietnam is the leader in the solar panel market with the largest installed capacity, making up close to half the region’s total capacity in 2019, WoodMac said.
Its data shows that the country’s cumulative solar PV installation will hit 5.5 GW this year, making up 44 per cent of South-east Asia’s total capacity. This compares with just 0.134 GW in 2018.
WoodMac noted that Vietnam awarded projects at US$93.50 per megawatt hour (MWh) under a feed-in tariff (FIT) programme for solar PV projects connected before end of June 2019. While bankability concerns existed, the project economics were attractive, delivering equity internal rate of returns in the mid-teens.
FIT is a payment made to renewable energy producers, which could be households or businesses generating their own electricity using renewable means, for each unit of energy produced and injected into the electricity grid.
WoodMac solar analyst Rishab Shrestha said FITs have proven to be an effective policy to inject rapid growth in renewables, and Vietnam’s build is another example of that.
Vietnam’s next FIT is expected to be applied through 2021, and WoodMac expects grid connection activity to peak at around the end of that year.
Grid expansion is also expected to increase grid capacity for solar in key southern provinces, as installed capacities exceed grid capacity. WoodMac expects this to go up by about 25 per cent in 2020, compared with 2019, but said more investment is needed to address curtailment concerns.
Other growing solar PV markets include Malaysia and Singapore.
WoodMac said Malaysia’s policy target is backed by a sound policy framework and offers sizable opportunities, as the country targets a 20 per cent renewable capacity mix by 2025.
As for Singapore, distributed solar is gaining momentum, WoodMac said, as it expects the national target of 350 MW by 2020 to be met. Singapore installed 56.7 MW in the first half of this year, exceeding the 2018 full year solar addition of 55.1 MW.
Source: businesstimes.com
