Inadequacy of electricity grids in island nations such as Indonesia and the Philippines spur demand for distributed power generation (DPG) in Southeast Asia. Decentralised plants also help nations like Myanmar to quickly improve its electrification rates - from currently just 26% - and avoid power losses through transmission. Worldwide, the DPG market is estimated to top 34.7 GW by 2020.
Change in utilities' business models, combined with policy support, will go a long way in unlocking the true potential of distributed power in Southeast Asia , Frost % Sullivan analysis finds, forecasting the DPG market will grow from around 20,450 MW in 2015 to reach 34,747 MW by the end of the decade.
"Across Southeast Asia, gas-fired solutions are likely to find greater uptake than diesel/HFO-fired solutions due to their environment benefits, operational flexibility and shorter implementation time," analyst Adwaith Visveswaran said. "DPG solutions will also become less expensive once developers ensure the security of fuel supply through long-term partnerships with suppliers and the feedstock community."
Decentralised power, notably temporary rental power plants, is often a more viable option in developing countries that conventional power plant. An industrial –size, centralised plant “takes five to ten years to become fully operational,” he said, pointing at “obstacles created by environmental laws, the protracted land acquisition process and overall construction delays.” During this period, power producers often choose to meet local demand by setting up temporary rental gensets.
Competition between gas and solar heats up
Solar is on the brink to becoming a success story, should cost of batteries for solar PV panels fall further. Advantages irradiance levels throughout most the region “has given a major fillip to the DPG market in Southeast Asia.”
With annual global horizontal irradiance (GHI) ranging from 1,200 kWh/sq meter to 1,800 kWh/sqm, Southeast Asia is ideal for solar power deployment. More than 60%of the land in Thailand, Myanmar and Vietnamis is deemed suitable for large-scale solar farms, with annual irradiance levels up to 2,000 kWh/sqm.
Latest analysis from Frost & Sullivan on the DPG market in SouthEast Asia analyses market prospects, investment and key power plant types – notably biomass and waste to power, solar photovoltaic (PV), internal combustion engine (diesel/heavy fuel oil/gas engines/gensets)-based power plants and temporary rental facilities.