This programme introduced the basics about South-East Asia’s micro-grid market. The participants learn about global trends, fundamentals of technical design and key building blocks for micro-grid business models. 3 country-level dive-in’s were presented for Indonesia, Philippines and Myanmar and they were accompanied by selected case studies.
South East Asia energy mix is primarily dominated by oil at followed by natural gas, coal and bioenergy.. Tpes is 628 mtoe as of 2015 and the demand for energy is expected to grow 4.7% annually until 2035. The Energy demand for producing electricity is expected to increase by 95% by 2025, provided predominantly by coal, natural gas and large hydro. Of energy use, industry is the largest consumer at 29%, followed by transportation at 27% and residential at 26%.
According to Reiner Lemoine Institut, the global installed capacity of off-grid diesel power plants is ~20 GW. About 700 million people worldwide use diesel generated electricity and further millions do not even have diesel generated electricity. Diesel generated electricity is costly (USD 0.30-0.60/kWh) and about 25% (~5 GW) of this market is in South East Asia.
There has been high growth rate of microgrid over the decade. It is projected that in 2024, 41% of microgrid revenue will be from Asia Pacific, while 32% will be from North America, with total global revenue to be about $165B. However majority of mircogrids are still not RE based, mainly combined heat and power, natural gas and diesel.
Government policy and regulation will be somewhat driving new mini-grid projects, but involvement of private developers will be limited due to local administrative complexities. National MediumTerm Development Plan 2015-2019 specifies energy access target of 96.9% by 2019 (Program Indonesia Terang - Bright Indonesia Program). Renewable energy target is 23% of electricity production by 2025, the current share is 13%. The World Bank’s Regulatory Indicators for Sustainable Energy indicates low quality of the overall framework which is complicated by local government interventions.
The National Renewable Energy Programme seeks to increase the renewably energy capacity of the country. An estimated 15,304 MW by the year 2030, almost triple its 2010 level and achieve target of 100% household electrification by 2020. The government policy is currently under revision with the support of the EU Access to Sustainable Energy Programme. The changes will target revision of subsidy scheme (no subsidy for commercial and industrial customers) and will creating framework for investment to drive hybridization of diesel-based mini-grids managed by National Power Corporation – Small Power Utilities Group.. This will include revision of regulations for NPPs and QTPs. The World Bank’s Regulatory Indicators for Sustainable Energy indicates the main challenge in terms of the overall mini-grids framework (targeted by the above-mentioned revisions).
The Myanmar government has an ambitious plan to achieve universal energy access by 2030 up from the current levels of 30 to 50% of population. Decentralized power solutions (mini-grids and solar home systems) were identified as preferred means of electrification in remote areas that won’t be reached by the central grid within the coming decade. The World Bank’s Regulatory Indicators for Sustainable Energy indicates several challenges including the overall framework and lack of transparency in government and utility planning.
In summary, micro-grid industry is evolving quickly. Donors and development banks are still playing a strong role but private investors are also taking notice. The industry is pulling together grassroot support to Advise governments, de-risk finance, and build local capabilities.
Supported by SECOE
SECOE is a programme of
