A new study released by Wood Mackenzie highlights that Southeast Asia requires $14 billion in investment by 2030 in order to expand its wind energy market.
The investment will support the 8.9GW of new wind energy capacity the region is anticipated to add between 2020 and 2029.
Southeast Asia is one of the world’s fastest growing power markets owing to governments setting renewable energy targets to diversify their energy mix to be more energy self-sufficient, according to the study.
The region’s average annual power demand is expected to grow at 8% until 2030.
Wood Mackenzie principal analyst Robert Liew said: “Currently there are about 20.7GW of planned wind energy capacity in the pipeline, but we think less than half or 8.9GW will be realised by 2030. The coronavirus pandemic has slowed development in 2020, as border closures delay equipment transportation and prevented foreign technical staff support in these nascent Southeast Asian markets.
“Vietnam has risen to become the shining star in the region’s race to add wind power capacity. It alone accounts for 66% of new capacity expected to be added by the end of the decade.”
The surge in projects in Vietnam is driven by the government’s decision to upgrade the wind feed-in-tariff (FIT) in 2018 to $85 per MWh for onshore wind and $98 per MWh for intertidal offshore wind with a 2021 deadline for both FITs, though a potential extension to 2023 is still to be decided.
Power demand is recovering, and Southeast Asian countries will be competing to attract large-scale investments to spur economic recovery. This will provide opportunities for governments to push ahead with their new national power plans with expanded roles for more renewables.
“There is potential for more upside if Malaysia and Myanmar start utility-scale wind development and offshore wind development occurs in markets outside Vietnam,” concludes Liew.