APAC electricity demand to grow 3.4% in 2022

CREDIBLE RE STRATEGY WILL BOOST VIETNAM’S MANUFACTURING SECTOR

VIETNAM

The future of Vietnam’s manufacturing sector will depend on the country’s renewable energy strategy as its economy has “unparalleled exposure” to multinational companies who are joining the call for carbon neutrality, according to the International for Energy Economics and Financial Analysis (IEEFA).

Multinational companies who are responsible for up to $150b of the countries have made pledges on carbon neutrality and decarbonisation with varying timelines said Energy Finance Analyst Thu Vu in her report.

“These brands’ journey toward sustainability progress is one in which Vietnam cannot afford to ignore or miss out on,” she said.

“Solar and wind power is no longer a sole matter of incremental power supply, but also an insurance policy for jobs, hard currency earnings, economic growth, and a conduit for sustainable investments,” she added.

Vu said the revenue stream of Vietnam, currently the largest exporter of goods in developing Southeast Asia, for this decade will depend on its “ability to plug factories to a low-carbon grid.”

Credible decarbonisation strategies

Corporate adoption of clean energy can be observed in the rapid growth of distributed power solutions such as commercial and industrial (C&I) rooftop solar systems which will help ease demand, grid congestions, and relieve the pressure on state utility Electricity of Vietnam to develop and fund new capacity, she said.

The C&I rooftop solar segment has also been driving capacity quietly this year amidst a temporary policy freeze on utility-scale projects as developers and their financiers tap into Vietnam’s “largely under-served and growing industrial space.”

Eco-industrial parks are also rising in the country as owners explore clean energy solutions to attract environmental, social and governanceconscious tenants.

The government, meanwhile, is undertaking regulatory and technical preparatory work for an offsite corporate renewable energy procurement scheme known as the Direct Power Purchase Agreement, which is expected to be deployed from 2023 to 2024 with an initial cap of one gigawatt (GW).

The scheme, which will relieve EVN of tariff pressures according to Vu, is highly anticipated by energy-intensive corporate consumers who have insufficient access to adequate onsite renewable resources.

She also said that the corporate renewable procurement market in the Asia Pacific region is increasing, led by India which currently has a 5.2GW capacity.

APAC electricity demand to grow 3.4% in 2022

ASIA PACIFIC

Electricity demand in the Asia Pacific region is expected to grow at around 3.4% in 2022, a downward revision by over one percentage point from the early 2022 forecast, according to a report by the International Energy Agency (IEA).

The IEA said the downward revision is mainly driven by the lower economic growth, high energy prices, strict sanitary measures, and extended effects of coal shortage for power generation.

Demand in China is expected to increase by 3% this year, according to IEA report.

China posted a 0.5% year-on-year increase in the first five months of 2022, as it has seen a decline in April and May as zero-COVID strategy measures were in place due to new outbreaks, which strongly affected energy consumption, with some industries forced to top their operations.

“The outlook for the rest of 2022 remains highly uncertain and will depend on the stringency of sanitary measures. Potential reform of China’s ‘dual control’ policy, which would replace caps on total energy consumption and energy intensity by caps on total carbon emissions and carbon intensity, could trigger an increase in total demand,” it said.

If renewables supply the additional demand, a rise in total demand beyond the existing caps is possible, it said.

India, on the other hand, is expected to have its demand grow to 7%, up from the previous forecast of 6%, following the heatwave the country experienced.

With temperatures increasing up to 50 degrees Celcius, air conditioning use is boosted, creating a surge in electricity demand, including new-all-time highs along with supply shortages, the energy agency said.

Overall for 2023, the IEA expects demand growth of close to 4% in the region, “making up for some of the 2022 slowdown.” China’s electricity demand is expected to be over 4% next year, on the back of recovery from suppressed demand in 2022.

The IEA, meanwhile, revised its growth forecast for India to 5% in 2023 from 6%, due to the expected impact of high global prices and a correction against temperaturedriven growth in 2022.

For 2023, demand growth will be close to 4% in APAC

The outlook for the rest of 2022 remains highly uncertain

PLANT WATCH Jurong Island’s energy storage Athena’s largest rooftop solar World’s largest solar facility

SINGAPORE

Sembcorp Industries, through its wholly-owned subsidiary Sembcorp Utilities, has been chosen by Singapore’s Energy Market Authority to build a 200-megawatt (MW)/ 200-megawatt-hour (MWh) energy storage system on Jurong Island.

In a statement last week, Sembcorp Industries said the project is expected to be completed by the end of 2022.

The company’s battery storage portfolio in Singapore and the UK is now at 474MW/624MWh, making it one of Asia Pacific’s largest battery operators. Athena Energy Holdings has commissioned a 26.15-megawatt (MW) rooftop solar project, which is considered as the largest one in Vietnam.

The landmark project, known as the Shundao Rooftop Solar Project, is expected to produce an average of 34 million kilowatt-hour of energy every year.

It is estimated to offset some 33,898 tonnes of carbon emissions, which is equivalent to to at least 8,000 cars on the road per year for the next two decades. Philippines-based Prime Infrastrastructure Holdings, Inc. (Prime Infra) plans to develop the world’s largest solar power facility with a 2,500MW to 3,500MW capacity, along with a battery energy storage system that will augment the country’s renewable energy supply.

In a statement, it said that the facility will have a capacity of 2,500 megawatts (MW) to 3,500MW, combined with a 4,000MW-hour (MWh) to 4,500MWh of battery capacity.

The project will be led by Terra Solar Philippines (Terra Solar), which is a unit of Terra Renewables Holdings, Inc.

VIETNAM PHILIPPINES