Wind energy has been a relatively low-priority renewable segment for many countries in the Southeast Asia (SEA) region, as compared to solar, which has witnessed rapid installations. The region significantly lags behind the rest of the world in terms of wind power development. This can be largely attributed to the lack of effective policies and greater preference for fossil fuels in most of the SEA countries.
That said, it cannot be denied that the region has significant wind power potential. This is especially true in the northern parts of Vietnam, Cambodia, Myanmar and Lao PDR. The Philippines, Thailand and Indonesia also have a considerable amount of wind power potential. Together, the Philippines and Vietnam account for an estimated wind power potential of 832 GW, as per the Wind Energy Future in Asia Report 2012 prepared by the Asian Development Bank. Further, most of the countries have long coastlines, which are ideal for developing offshore wind energy.
Global trends show that wind power technology has become increasingly cost competitive, even without any subsidies. Tariffs for new wind power projects surpass those for new coal-based power projects in many global markets including India, Brazil, Australia and the European Union (EU). Many countries in the EU have imposed carbon emission costs, which makes wind power a more attractive option than coal or gas. For these reasons, wind energy is witnessing a significant uptake around the world, with technological advancements focused on making bigger and better wind turbines.
In comparison, in the SEA region, only Indonesia, the Philippines, Thailand and Vietnam have witnessed some degree of wind power uptake. The other countries in the region do not have even a single megawatt of installed wind power capacity as of March 2019, as per the International Renewable Agency (IRENA). Renewable Watch analyses the wind power potential across the four markets that have taken noteworthy steps to develop the wind power segment…
The country’s wind power potential is limited because of its location along the equator. Average wind speeds across the country range from 3 to 6 metres per second. The country’s investments in the wind power domain are thus focused on small-or medium-sized power plants, which require lower wind speeds. Some of the higher wind speed regions include Sumba, West Timor and the coastal areas of South Java. The country has an estimated realisable wind energy potential of 9.3 GW. The windiest regions in Indonesia lie in the eastern islands, which are less populated and lack adequate transmission infrastructure. Transmission systems would need to be built in these regions to facilitate the development of large wind farms. With ocean breezes along its long coastline throughout the year, Indonesia may also have a sizeable offshore wind potential.
The Philippines’ wind energy has been estimated at about 55 GW. Various surveys have identified at least 47 wind-rich provinces, each with a potential to generate a minimum of 1 GW of wind power. Of the total available potential, 7.4 GW has been discovered at 1,038 wind sites across three of the country’s islands. Luzon has 4.9 GW of wind power potential across 686 sites, Visayas has 2.17 GW across 305 sites and Mindanao has 0.37 GW across 47 sites. The north and north-eastern regions of the country have the highest wind resources, while the south and south-west regions have the lowest available wind resources. Good to excellent wind potential has been discovered in those regions of the country that face east towards the coast, extending from Luzon to Samar. These regions also have significant wind resources for utility-scale wind power projects as well as for small and decentralised applications.
Thailand has low wind speeds throughout the country, because of which it is frequently overlooked in terms of wind power generating capabilities. The country has a few high wind regions, with average wind speeds of 6-7 metres per second at a hub height of 90 metres. Its wind resource in these areas is adequate for the implementation of large-scale wind power projects, particularly in the central and western regions of the country. At 190 GW, Thailand’s wind power potential is enormous, and more than sufficient to cater to its increasing energy demand. The only drawback is that most of the wind-rich regions are located in national parks and rough mountainous terrain. Thus, a lot of time and effort is required for securing approvals and getting the basic infrastructure ready before a power plant is commissioned. Since most of the country has low wind speeds, it requires smaller wind turbines to utilise its potential.
Vietnam has abundant wind power potential owing to its coastline of 3,000 km. The total wind power potential in the country is estimated at 713 GW. Of this, 510 GW is estimated to be in the mainland while 200 GW is on the islands. The average wind speed is around 5.6 metres per second in the coastal regions. On certain islands of the country, winds speeds go up to 8 metres per second. Wind density in Vietnam varies by area. The islands have an average density of 800-1,400 kWh per m2 per year, while the Central Highlands, the coastal areas of Central Vietnam and the Mekong Delta have an average density of 500-1,000 kWh per m2 per year.
The recent wind power development trends in SEA show inconsistencies in policies and their implementation. Despite the high wind potential of the entire region, only 1.8 GW of wind power capacity has been installed as of March 2019, all of which is present in the four countries discussed above. However, the situation in SEA is likely to improve in the near future with an increasing uptake of renewable energy. The primary reason for this is that the domestic fossil fuel reserves are insufficient to meet the rising energy demand in the SEA region. Moreover, the cost of wind power is lower than that of fossil fuels. With leading international investors opting not to invest in fossil fuels, the cost of financing these projects is rising, while that of renewable energy projects is decreasing. With the global stress of combating climate change, the pressure is mounting on SEA countries to move towards greener sources of energy. These factors coupled with increasing market competition have led to a spike in wind power development activities in the region.
In 2018, Indonesia installed its first wind power project, a 75 MW utility-scale wind farm in Sidrap, South Sulawesi. This project was constructed by Australia-based UPC Renewables in collaboration with a local partner at an investment of $150 million. Another wind project is being developed in Jeneponto, located in South Sulawesi. Besides these, several other wind power projects are currently being developed in East Kalimantan and West Java.
The Philippines, which has seen no new wind power installation after 2016, is slowly transitioning from feed-in tariffs (FiTs) to auctions for allocating wind power projects to attract more private players as well as international investors in the wind segment.
Thailand, which has witnessed a rapid growth in wind power uptake, is targeting only 3 GW of wind energy by 2036. Although the targeted capacity is quite small when compared to the wind power potential, the country is focusing more on reliability of power supply and its land allocation issues than on aggressive capacity additions.
Vietnam is also emerging as a popular destination for wind power projects. The 50 MW Dam Nai Wind Project being developed by Blue Circle is Vietnam’s first foreign-owned wind plant. In November 2018, Singapore-based Blue Circle partnered with the Philippines-based AC Energy to jointly develop and construct about 700 MW of wind power projects in Vietnam. They are also planning similar projects in Laos, Indonesia and the Philippines.
The way forward
In line with global trends, wind power development in SEA has been largely due to the attractive FiT programmes, which ensure priority grid connections for wind power plants. However, with global markets moving towards auctions, the governments in SEA countries are considering a similar transition. This brief period of market uncertainty has led to a slowdown in the already subdued wind power market in this region. Despite the lack of visibility, global developers and investors are considering large investments in the wind power segment of the region. Going forward, the governments of SEA countries need to improve their tendering, contractual and approval procedures for increasing developer and investor confidence in the segment. In sum, strong national policies and a competitive market will drive the realisation of SEA’s large wind power potential.
By Khushboo Goyal