Poor grid infrastructure may impede Southeast Asia’s renewable push


Poor grid infrastructure may impede Southeast Asia’s renewable push


According to a new report by Black & Veatch, flexible transmission infrastructure is a critical enabler for solar and wind power to function, and Southeast Asia needs to start preparing for stronger networks to support its renewable ambition.

Southeast Asia's electricity demand is increasing at a pace of 6% per year, one of the fastest in the world, due to strong economic expansion, industrialization, and population growth. The Association of Southeast Asian Nations thus plans to get 23% of the region’s energy from renewables by 2025.

With the increased use of renewable energy, power grids must upgrade to accept higher level of complexity in order to manage with quickly dispatchable and more variable sources of electricity, such as solar and wind. Experts predict a bumpy future if the necessary infrastructure to accommodate variable renewable energy sources is not in place.

In contrast to solar and wind projects which can be commissioned in a rather short period, related transmission infrastructure takes year to install, implying the latter may not be available in time, said Muralidharan Ramakrishnan, the head of Fitch Ratings' South and Southeast Asia energy and utilities division.

Southeast Asia may face growing pains as it transitions to renewable energy sources. According to a report released last year by accounting company PwC, advanced grid infrastructure is still unavailable in countries such as Brunei, Cambodia, and Laos.

For instance, some solar power projects in Vietnam have reportedly had to waste 80% of their generated electricity in recent years. While the country's solar power capacity increased significantly in 2019 and 2020, the electricity grids were unable to keep up with the mismatches between peak supply – when the sun is shining – and peak demand – when people turn on larger appliances in the evening.

Black & Veatch’s recent survey showed that over a third of Asia's electricity industry leaders say integrating renewable energy is one of their most challenging difficulties. The lack of energy storage and reliable transmission networks are cited by more than 30% of respondents as threats to providing reliable service.

“There is a clear need to raise awareness among governments, investors, and other public stakeholders about the role of transmission and grid management in improving renewable integration and achieving a successful energy transition,” said Narsingh Chaudhary, executive vice president and managing director of Black & Veatch Asia Pacific.

According to the report, in order to upgrade grid infrastructure to better support wind and solar power, Southeast Asia is anticipated to spend $1.2 trillion between 2019 and 2040, which will be used to ensure that networks can withstand high supply unpredictability and to develop systems that can modify electricity rates in real time to better match demand and supply.

Besides, Southeast Asia is expected to require new and longer transmission lines since the sun shines and the wind blows may be far from power-hungry urban regions.

Some Southeast Asian countries are becoming aware of the value of centralized grid development. For example, grid development is a top objective in Vietnam's PDP8 power development strategy, and the development of “smart grids” to better integrate renewable energy is also mentioned in Indonesia's newest five-year energy plan.

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