JD Ross: A regional push towards green energy in Southeast Asia

Major energy businesses in Southeast Asia that have relied on the fossil fuel industry for so many years are now progressing further into renewable energy in an attempt to meet rising energy demands in the region. For example in Vietnam, power generation and coal mining business Banpu recently announced plans to develop an 80,000 kW wind farm in the southern part of the nation. The wind project has been valued at over $400 million and is due to be completed by 2021. The expansive coastline of Vietnam offers an ideal location for wind energy in Southeast Asia. Last year, the government showed its support for the wind sector by enhancing feed-in tariffs for wind power.

A new kind of wind energy 

Leading wind manufacturer, Vestas recently won its first V150-4.2 MW order within Southeast Asia for a new project in Vietnam. Based on the V150-4.2 MW wind turbine, regarded as one of the most effective producing low-wind turbines in the industry, the project is expected to generate a highly efficient and competitive energy cost for the customer. With their years of experience and vast knowledge of the nation, Vestas was able to create an effective transportation and logistics solution capable of producing the largest turbines in Vietnam, exceeding 73 metres in blade length.

The 42 MW order involves the supply and installation of the wind turbines as well as a 10-year energy-based service agreement. This will form the fifth project in Vietnam for Vestas and the first that incorporates both supply and installation stages. Clive Turton, the President of Vestas Asia Pacific explains that this is a vital win for Vestas as it will highlight the potential of Vietnam as one of the core countries in Southeast Asia to attract investors and expand its wind industry. Turton explains that with their great knowledge, strength in delivering customised solutions and established a presence in Vietnam, Vestas is in a strong position to support the nation’s goal of expanding its renewable energy resources.

Rising Demand

Energy demands in Southeast Asia are expected to rise by over 70% in 2030. According to the International Renewable Energy Agency, over 50 million kW of electricity was produced directly from renewables in 2017 within Indonesia, Thailand, Vietnam, Malaysia and the Philippines. This equates to an increase of approximately 125% since 2007 and is the equivalent output of 50 nuclear reactors.

Energy demand levels are increasing rapidly worldwide, with fossil fuels meeting around 70% of the increase in growth in electricity consumption. With the rising threat and implications of climate change, carbon-free alternatives like solar and wind are becoming ever more important within meeting future global energy demands.

Offshore wind projects are experiencing a significant rise

A recent study by Global Industry Analysis suggests that offshore wind capacity is predicted to increase by over 80 GW by 2024, reaching a CAGR of over 25% within this period. Europe, which has maintained its place as a leader in offshore wind development is now struggling to maintain its position, with significant development plans in Asia. Whilst China and India are key areas for wind development in Asia, within southeast Asia, Vietnam is emerging as a new region for offshore energy development. Today, Asia economies combined have over 100 GW of offshore wind capacity planned for development in 2030.

Furthermore, organisations are actively pursuing emerging economies across Southeast Asia to meet their own wind power targets. Earlier this year, the World Bank Group (WGB) confirmed a $5 million partnership project with the International Finance Corporation (IFC) to explore offshore wind potential. With support by the UK Government, providing an additional $26 million, the project will focus on sustainable energy solutions worldwide. It is predicted that countries likely to really benefit from the project include many nations within Southeast Asia such as Indonesia, the Philippines, Sri Lanka and Vietnam, countries that provide ideal coastal locations for offshore wind development and have rising energy demands.

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