Vietnam has the lowest “levelized” cost of solar energy in Southeast Asia, the International Renewable Energy Agency (IRENA) says in its latest major energy-transition publication.
The levelized cost of energy (LCOE) is a measure of the average net present cost of electricity generation for a generator over its lifetime. It is used for investment planning and to compare different methods of electricity generation on a consistent basis.
Vietnam’s LCOE from solar is $0.046/kilowatt-hour, IRENA says, adding that most other ASEAN nations have figures between $0.05/kWh and $0.075/kWh.
The IRENA publication, “Renewable Energy Outlook for ASEAN: Towards a Regional Energy Transition,” emphasizes the dominant role that will be played by solar energy in a net zero world.
The Abu Dhabi-based organization has updated the analysis it produced in 2016 about the 10 ASEAN countries to map a route to net zero in the region by mid-century.
It estimates that a net-zero need of 64 gigawatts to 73 GW per year of new solar energy generation is needed in Brunei, Myanmar, Cambodia, the Philippines, Indonesia, Singapore, Laos, Thailand, Malaysia and Vietnam.
Starting this year, Indonesia, Vietnam and Thailand would need to add 24.2 GW, 17.9 GW and 11.2 GW per year, respectively. At the other end, Brunei would have to contribute just 70 MW annually.
Vietnam Electricity (EVN) data shows Vietnam’s total capacity of operational wind and solar projects accounts for nearly 27% of the total installed capacity, including 16,545 megawatts of ground and roof solar power, and 4,126 MW of wind power.
“While ASEAN has ambitious renewable energy goals in the near-term, the region needs to think and plan for the long-term,” the report says.
“It has a unique opportunity to develop a sustainable energy system based on renewable energy resources that can support recovery and development while addressing climate change mitigation and adaptation strategies, and accomplishing energy security, universalization and affordability goals.”
The authors of the report, jointly written by the ASEAN Centre for Energy, an inter-governmental regional body, concluded solar will become the dominant force among new power generation capacity by mid century, even in the most pessimistic business-as-usual scenario, which presumes backsliding in environmental ambitions.
In terms of the energy transition required to deal with climate change, the study says the ASEAN nations must have installed 241 GW of solar generation capacity this decade, at a cost of $156 billion, and can then spend $1.08 trillion to reach 2,100 GW of solar in a 90%-renewables energy system by 2050, or $1.25 trillion for 2,400 GW across the 10 countries for an all-clean-power grid.
The year 2050 is also the year Vietnam seeks to reach carbon neutrality via its clean energy transition process. Its net-zero emissions target provides renewable energy businesses with abundant scale opportunities in the decades to come.
The 128-page study, published last week, estimates the ASEAN nations will need about 11 million tons of green hydrogen by 2050, to be used in heavy industry, shipping fuels, and to balance out all that solar, along with grid-scale batteries.
According to the report, Southeast Asia is lagging the sort of progress witnessed in other parts of the world when it comes to hydrogen strategies.
Another potential energy transition opportunity for the ASEAN nations lies in exploitation of the raw materials critical to renewables and electric vehicles (EVs), the study says. Indonesia is a big supplier of the world’s nickel and copper and the Philippines also has a big slice of both markets. Vietnam, Malaysia, and Myanmar have substantial rare earth element deposits, the report adds.
IRENA is an intergovernmental organization mandated to facilitate cooperation, advance knowledge, and promote the adoption and sustainable use of renewable energy.