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SE Asia’s race towards clean energy

In the Asia-Pacific region, the SE Asia countries have traditionally been overshadowed by clean energy funds flowing into China and India, but recent developments are putting them into a new investment spotlight.

In Nov 2010, Norway’s Renewable Energy Corp (REC) announced the opening of one of the world’s largest integrated solar plants in Singapore. The $2.5bn complex, Singapore’s largest cleantech investment to date, sits on a 321,000 sq m site, produces over 190,000 solar modules monthly, and will employ a 1,700 workforce. This will initially provide 740MW of solar wafers, 550MW of solar cells, and 590MW of solar modules annually.

Frequently affected by power shortages and an ageing collection of coal-fired power plants, the Philippines announced in Dec 2010 that it will consider opening an unused nuclear plant. It joins neighbouring countries like Indonesia, Malaysia, and Vietnam, which have all put in place plans to build their own nuclear plants.

The Philippines and Indonesia both hold untapped potential for geothermal energy. The Philippines is the world’s second biggest user of geothermal power, while Indonesia, with 40 percent of the world’s proven geothermal reserves and portntial steam reserves of 27,000MW, is aiming to add 8,500 MW of output to its current 1,000MW by 2025. The Indonesian government has also just announced a Biru program that will provide $200 and an interest-free loan for the remaining $800 to each household that plans to construct a biogas reactor. It targets to add another 6,000 units to its current 1,686 reactors by 2012.

Malaysia is next looking into solar power. The government power utility just announced that it will soon request for tenders to build its first solar power plant at an existing power plant in Putrajaya, south of Kuala Lumpur. This is expected to help Malaysia reach its solar power generating capacity to 5% of its energy mix by 2015. Malaysia’s total power generation currently stands at over 108GW.

Just 180km north of Bangkok in Lopburi, Thailand’s National Development Energy Company, with $70m support the Asian Development Bank, is also investing in a solar plant that will start producing 55MW of output by Nov 2011, and eventually reach 84MW. This is expected to power up to 70,000 homes as the Thai government’s Renewable Energy Development Plan targets to increase the contribution of clean energy from 5 percent currently to 20 percent by 2020.

The region holds massive natural developmental potential in this space, despite challenges in competing landuse and fluid policy conditions. Led by government investments, private sector capital is starting to flow and will continue to grow with the incentive structures such as feed-in tariffs, tax breaks, and soft loans.