Indonesia, Vietnam look to blaze trail for solar in Southeast Asia

Indonesia, Vietnam look to blaze trail for solar in Southeast Asia

Indonesia and Vietnam are looking to join Thailand in blazing a trail for
solar power in Southeast Asia, introducing targets to fire up green energy
generation as a landmark global agreement to curb pollution is set to take
effect.

Countries around the world are coming under increasing pressure to crack
down on carbon emissions from sectors such as coal-fired power stations,
with the historic Paris climate accord coming into force this Friday after
it was signed last year.

Indonesia and Vietnam aim to each have annual solar power capacity of at
least 5 gigawatts (GW) from 2020, up from close to nothing now, officials
from both governments told Reuters.

That level of output would have placed the countries among the top 15 solar
producers in the world in 2015 data from the International Renewable Energy
Agency (IRENA), and would account for close to 9 percent of expected power
generation in Indonesia and Vietnam at the turn of the next decade.

The regional push towards solar will add momentum to global growth in the
technology and could benefit companies such as Canada's CMX Renewable Energy
Inc, as well as South Korea's Shinsung Solar Energy and Hanwha Q Cells Korea
Corp.

"It will come very quickly as it takes a short time for construction," Hoang
Quoc Vuong, Vietnam's Vice Minister of Industry and Trade, said on the
sidelines of an industry conference last week.

However, with initial costs traditionally seen as a big deterrent to solar
projects, both Indonesia and Vietnam will be offering opportunities for
subsidies via so-called feed-in tariffs (FIT), allowing producers to lock in
sales of renewable energy at fixed prices for a few years.

"If we promote solar, there has to be subsidy," said the Vietnam official.

"Feed-in tariffs have been issued so that the (5 GW) target can be
achieved," said Maritje Hutapea, director of various kinds of energy at the
Renewable Energy Directorate General under Indonesia's Energy Ministry.

France's Engie (ENGIE.PA) is in talks with state power company PLN for two
solar projects of 200 MW.

FEELING THE HEAT

Thailand has so far been the frontrunner in developing solar power in
Southeast Asia, with a government official saying its installed capacity
reached about 2 GW in August, beating its target of 1.7 GW for this year.

"We have already exceeded our target for this year, especially in solar and
waste power, given attractive FIT rates," Viraphol Jirapraditkul, director
of the Energy Regulatory Commission told Reuters.

"We have discussed about the possibility of raising the target for
renewables and the energy ministry's planning office will need to propose
the numbers."

Elsewhere in the region, Malaysia plans to add 1 GW of solar power capacity
by 2020, or 250 MW per year, said Energy, Green Technology and Water
Minister Maximus Ongkili, up from 267 MW currently.

And the Philippines has met a previous target of 500 MW for solar, but no
fresh target has been set as the country's new government is still reviewing
its energy mix.

But some analysts cautioned that Indonesia and Vietnam's solar targets were
ambitious and could be difficult to achieve.

"It's a good move in the right direction but the targets are optimistic,"
said Paul van der Aa, an advisor at PT. PricewaterhouseCoopers Consulting
Indonesia.

"It remains to be seen if they can be achieved in the short term."

And despite the growth of solar power in the region, coal is likely to
remain a major source of energy as fast-growing demand means that Southeast
Asia needs to double its power generation capacity in the next decade,
government and industry officials said.

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Ref: http://uk.reuters.com/article/uk-asia-solar-power-idUKKBN12X08T

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com