Renewable Energy Sources in Southeast Asia: Current Status and Future Implications Wind and Solar Energy Thailand and Vietnam

Transcription

1 7 TEAM 4 Renewable Energy Sources in Southeast Asia: Current Status and Future Implications Wind and Solar Energy Thailand and Vietnam Oscar Alfaro Ricardo Espinoza Alejandra Mendez Diana Servin Rocio Vazquez Green Energy Manufacturing Dr Mandal 10/1/2013 1

2 Table of Content Introduction... 3 Problem statement/issue with renewable energy sources... 4 Thailand and Vietnam: Technological development in the last two decades... 6 Current status of other available renewable energy sources... 9 Thailand---Biomass... 9 Vietnam---Biomass Vietnam--Hydropower Thailand ---Hydropower Comparative studies between Thailand and Vietnam Existing Capacity and Targeting Capacity of Thailand (MW) Existing Capacity and Targeting Capacity of Vietnam (MW) Renewable energy policies and future prospects in Thailand Renewable energy policies and future prospects in Vietnam Thailand Environmental Impact Vietnam environmental impact Conclusion References

3 Introduction As part of the socioeconomic development of a country, energy and energy sources play a substantial role and it is of high importance be aware of this. In the past, fossil fuels have been the main source of energy in the world, but in recent years, its downsides have become more noticeable. The main issues with fossil fuels are that it is a limited nonrenewable source of energy and that is use have led to global warming. For many countries in the world, renewable energy can become a good source since they have limited resources on fossil fuels and they might have a particular strength on a type of renewable energy. Renewable energies rely on inexhaustible sources and are free from greenhouse gases emissions. This gives them an enhancement over other energy sources. Also the cost can be a benefit depending on the area and the energy source. Below is a table showing costs power of generations of different energy sources along with its characteristics. TABLE I Costs of Power Generations Many first world countries nowadays are very concern and very active in finding sustainable energy sources. This has become a priority when talking about energy due to the levels of pollution found in many of them. In developing countries, renewable sources of energy 3

4 are becoming not only more common but more viable solutions since in some instances they represent less costly alternatives. In this paper we will analyze some renewable energy sources in Southeast Asia along with their current status and their future implications. This area is a sub region of Asia and it is considered to have heavy seismic and volcanic activity. This zone is composed of Cambodia, Laos, Myanmar (Burma), Thailand, Vietnam, Brunei, Malaysia, East Timor, Indonesia, Philippines, Christmas Island, and Singapore. Overall this region has a physical area of 4.5 million km2, a population over 610 million and it has an estimated average GDP (nominal per capita) of over $10000 (with some countries as low at $849 and as high as $49936). Below is a map for the Southeast Asia. Fig. 1. Southeast Asia Map Problem statement/issue with renewable energy sources As population grows the demand for energy increases. This leads to a greater demand and a quest to allocate energy generation methods that are not only more cost effective but are viable for the areas needed. Southeast Asia as a region that posses abundant natural resources and this makes it very suitable for renewable sources. Its countries are considered rapid and dynamic developing and this is a gate opener for development of renewable sources of energy such as hydro, biomass, geothermal, hydro and solar. Countries like Singapore, Indonesia, Philippines, Malaysia, Thailand and Vietnam are setting targets on renewable energy in order to supply their 4

5 needs in energy due to their rapid growing rate. On below figure, we can see the targets Southeast Asia has set up as a region for Fig. 2. Existing and Target Capacity for Southeast Asia For this paper we will discuss two main energy sources: wind and solar. Wind energy has become more popular and has been increasing in the last decade. Solar energy is viable and depends on certain conditions such as weather and solar emissions. Some of the considerations that we need to have in mind when we talk about wind energy are tower height, the data recovery rates, quality of the equipment that is being used in building the turbines, usage/maintenance of the turbines, areas in which the this will be a feasible option, space allocation among other. These are elements that need to be considered thoroughly or they will become an issue on planning for wind turbines. Solar energy forms a vital part of most of Southeast Asian countries national renewable energy plans and policies that are being enforced for the next 2 decades. These new policies represent large scale investments. Some considerations for solar or photovoltaic energy that have to be taken into account are location, size of the PV panels, and weather among other. 5

6 Thailand and Vietnam: Technological development in the last two decades Thailand's economic transformation has been occurring since the sixties thanks to an industrial policy based on the promotion of private investment, both Thai and foreign. Public investment has focused on the The government has implemented a program called the Adder to promote the private sector of power producer to invest in renewable energy methods. Thailand has signed the Kyoto Protocol, and therefore is benefiting from it. This international convention classifies Thailand as a country on that investment in the renewable energy sector will allow a company in a developed country to offset their carbon emissions. The government has already made energy projects covered by this mechanism, as the construction of power plants. As shown in table 1. The project called Adder has been implemented in this nation the usage of Renewable energy as an incentive. Adder for development of infrastructure, technology and public services. TABLE II renewable energy in Thailand (as of 2008) The problems of energy sufficiency forced to seek alternative sources of energy. Power generation in Thailand depends heavily on fuel imports. This makes the country vulnerable to energy supply disruptions and fluctuations in world market prices. At the same time, Thailand is endowed with abundant renewable energy sources such as biomes, biogas, mini-hydro, solar and wind whose use can increase the country's energy security and saving foreign exchange and protect against fluctuations in world prices. Since 1982, Thailand as implemented a power development plan to focus on different clean and efficient energies. As seen in Figure 3. How the installed capacity of generation system has been modified in the past decade and how it is planned for the next two decades. 6

7 Fig. 3. Installed capacity of Thailand generation system The solar industry has gained strength as a global energy source, not only for the advancement and technological innovation that characterizes this sector, but to become a key driver for countries to renew their energy policy. Asian companies began in the early 1990s to invest in solar energy and have recently diversified global operations in this industry through plant Lopburi in Thailand, one of the largest in the world. Thus, Thailand seeks to diversify its sources of renewable energy, supply its domestic demand and, in the future, expand the model and supply to neighboring countries, which would make a supplier and regional development center. Fig. 4. Renewable energy development in 3 years ( ) The government has several plans in place to diversify energy supplies and promote alternative energy sources; the stated objective for 2011 is that 8% of the primary energy that is sold comes from renewable energy sources. On the other side, the demand for electricity in Vietnam has been growing significantly to an approximation of 15%. To understand Vietnam it is important to understand that this is a country where 20% of its population live in rural areas without access to electricity Vietnam 7

8 considers the technology and renewable energy as a key economic sector to boost industrialization and modernization process in the interest of reducing poverty. Vietnam has planned a national energy system linked to socio-economic development and under the guidance of international integration and efficient use of natural resources. In this sense, prevail gradually build an energy market; diversify ownership and business in favor of the interests of consumers. As seen on figure 2. A proper development of the electricity system, coal, oil and renewable energy, attracting investor and environmental protection has been implemented in the last decade. Fig. 5. Structure of energy sources generating electricity in Vietnam in the phrase As seen on the above figure, there are three main sources used in the last decade such as hydropower, thermal coal, electricity and thermo-electric gas. In Vietnam in recent years the Government has been trying to push investors to create more diverse sources of energy. Many foreign countries support Vietnam to assess the effect of the integration of the fountain in the national electricity system and market operation of the sector in order to ensure security of supply. Vietnam as a participant of the Kyoto Protocol has undertaken an active process of development of green alternatives, attracting more and more investors friendly to the environment in the areas of high levels of CO2 emissions. Vietnam has more than hydroelectric plants, which generate about 300 megawatts. In addition, the power of its wind energy is estimated at 514 megawatts. The production of electricity has increased significantly in the last ten years in Vietnam, however the production growth is not expected to meet demand in the coming year. Government forecasts that the country will need to import a significant amount of fuel in the coming years. 8

9 Current status of other available renewable energy sources Thailand---Biomass Thailand is an agricultural country which has plenty of biomass fuel such as wood chip, paddy husk, emptied palm bunch, rice. The concept at Thailand of the biomass energy is been promoted in order to reduce energy imports. The program started back on 1992 using several measures, including provision of top-up money for power generation using biomass fuel, guarantee of purchase and the provision of soft loans for the implementation of the project. The target of the (AEDP ) Alternative Energy Development plan was to have about 20% of the country s total energy from renewable resources. In order to meet that target Thailand must have by the year of 2022 a total capacity installed of 3,700MW. On September of 2011, the total capacity installed was of 1,397MW with only 84 biomass power plants. Fig. 6. Biomass Projection for Thailand The main barrier of the implementation of the projects is public oppositions, because of poor planned projects created public fear or health impacts from biomass power plants, in order to solve this, the HIA (health impact assessment) need to work with the stakeholders creating new policies in order restart the projects. 9

10 Vietnam---Biomass Biomass is the major source of energy at in Vietnam. It is estimated that approximately 90% of domestic energy consumption in rural areas comes from the biomass energy such as fuel wood, and agricultural residues, it is also an important source of energy for small industries located also at the rural areas Fig. 7. Biomass in Vietnam The well utilization of these residues creates opportunities and will benefit the environment. However, just only about over 30% of this resources are exploited and mainly used for household cooking. Therefore, it is necessary to provide the related information on energy efficiency technologies, energy conservation measures or improvements inside the country to help the local people use energy efficiently, improve their standard of living and also contribute to the environmental emission reduction Vietnam--Hydropower -Vietnam has 2360 rivers equal or greater than 10Km long -10 Major River Systems with hydropower development potentials By 2010 about 50 hydropower plants were put into operation, it is projected that in 2020: 80 large and medium hydropower plants will be operating. -Hydropower plants constructed in less developed regions help boost up their socioeconomic development hydropower accounted for only 20% of Vietnam total power capacity; early 2008 accounted for 37.09%. 10

11 TABLE III Renewable Energy Consumption and Capacity In the economically sector, the higher the proportion of hydropower in the system, the lower the power price. The projected Hydropower consumption and capacity is been reflected on the below table for the coming years Thailand ---Hydropower Thailand electricity consumption of national grid in 2010 was 121,229 GWh it increased 5.4 % over The total of national grid installed capacity in 2010was 26,269MW up 1.4% over the year The Hydropower installed capacity and generation it s been shown on the below table. TABLE IV Hydro Installed Capacity and Generation 11

12 Comparative studies between Thailand and Vietnam TABLE V Existing Capacity and Targeting Capacity of Thailand (MW) Fig. 8. Existing and Target Capacity for Thailand 12

13 Existing Capacity and Targeting Capacity of Vietnam (MW) Fig. 9. Existing and Target Capacity for Vietnam Renewable energy policies and future prospects in Thailand Thailand was one of the first countries in Asia in implementing renewable energy polices for the generation of electricity. By supporting RE policies and incentives, the Thailand s government aims to increase the energy stability of the country. There is a large potential in Thailand for the implementation of renewable energy; for this reason the government passed the 15-year Renewable Energy Development Plan ( ). The REDP has as an objective to achieve 20% of RE in final energy consumption. Then a 10- year Renewable Energy Development Plan ( ) increased the target to 25% in electricity consumption (see table VI ). In order to achieve this objective, the government has implemented the below policies and incentives to attract RE investors. 13

14 TABLE VI Renewable energy potential, 2008 capacity and 2021 alternative development plan targets In 1992 the government introduced the Small Power Producer (SPP) programme. This policy forces to the electricity authorthy to purchase the power generated by RE plants. The RE plants with a capacity of export 90 MW were eligible for this programme. A smiliar programme was introduced in 2001 but for RE plants with a export capacity of 10 MW, a Very Small Power Producer (VSPP). Another policy implemented is the Feed-in-tariff (FiTS) or adder. The adder, implemented in 2007, is a feed-in premium paid to SPP and VSPP. It offers incentives for private investors who are willing to invest in the RE projects by guaranteeing attractive power purchasing rates. The investors also will enjoy long-term contracts to sell the RE electricity at specific tariff with the local utility. The purchasing rates depends on the type of renewable energy used to generate electricity and the area where the energy is generated (Table?). For example, there is a special purchasing rate for the Southern area because the political instability; and the government want to address the risk for the investor adding a special rate in this region. Also, in order to stimulate the reduction of fossil fuel, there is also a special adder rate for RE energy generated that replace diesel. 14

15 TABLE VII Thailand s Fits Rates The Thailand government also has put in place low-interest loan options for large, small, medium sized enterprises. Large-scale investors can receive financial assistance in the form of low-interest loans (4% of interest). Smaller-sized investors can receive up to $1.7 million USD, in form of equity investment, venture capital, and equipment leasing if the RE project is selected. Also, the government offers incentives to eligible RE projects. For example, the selected projects can get corporate income tax break up for 8 years and are exempt from import duties and equipment. Besides the local support that the RE projects are receiving in Thailand, some international institutions also are offering help. The Asian Development Bank (ADB) and World Bank s International Finance Corporation (IFC) would like to participate in the development of solar and wind energy and they will lame available $700 millions USD in low-interest loan. Currently, both institutions provided funding for two constructions of two Bangchak solar power plants totaling 34.5 MW and 9.3 MW respectively. 15

16 Renewable energy policies and future prospects in Vietnam The energy demand in Vietnam is expected to increase four times from 2005 to 2030 and the electricity demand will increase nine times from For this reason the government is encouraging the implementation of renewable energy policies. To encourage renewable projects, Vietnam has introduced different polices and incentives. On December 2007, the government introduces the National Energy Development Strategy; it states that the government will provide financial support for the investigation and research of renewable energies. Also, it states that investors are exempts of import, production, and circulation taxes. Another policy adopted by Vietnam is the Clean Development Mechanism (CDM) projects; including wind, solar, geothermal and tidal energy, are receiving subsides from the government. In 2008 another policy was implemented, the Avoided Cost Tariff (ACT). The avoided cost is defined as the production cost of 1 kwh of the most expensive generating unit in the national grid, which would be avoided if the buyer purchases the 1 kwh of electricity from a substitute small renewable power plant (Vietnam Country Report pg. 17). The project that qualified for the ACT also must employ the SPPA, which is the Standardized Power Purchase Agreement for Small Renewable Energy power plants (SPPA). This policy specifies the rate for the sale of electricity. Vietnam is the biggest wind resource potential country in Southeast Asia, and for this reason, the government is given more attention to wind power development. On 2011, a new policy was implemented in specific for this renewable energy and it sets the wind electricity price to be bought by the buyer ($7.8 US cents/kwh). This price includes a subsidy for $1 US cent/kwh. On the same year, 2011, the government approved the Power Development Plan (PDP), the plan has strong emphasis on energy security, energy efficiency, and renewable energy development. This plan states that investors who contribute to renewable projects will received the government support. 16

17 Thailand Environmental Impact The renewable resource of Thailand generation system was 3.7% of installed capacity in 2011 and if the current percent increase continues it is expected to grow up to 7.3% in The Thailand government wants to increase its share of renewable resource; however, there are cost versus environment impact that has to be evaluated. The Following table compares costs and emissions in order to understand better the options. TABLE VIII Comparing Fuel for Generator in Thailand When comparing the average cost projections versus the environmental impact, the government planners can decide what percent of renewable resource is more adequate for future planning base on the availability of financing resources. These models can be frequently visited and recalculated in order to obtain better projections because it is estimated that the cost of fossil resources will be increased while the renewable resources will be reduced. The following charts are projecting until 2030 and having as a baseline the actual projections of

18 Fig. 10. Average CO2 Emissions Fig. 11. Average Cost 18

19 Vietnam environmental impact 40% of the power generation in Vietnam comes from hydropower. In addition, 20% of its energy is imported from china and Laos because it cannot keep-up with the increase of up to 15% increase per year in the past decade. One of the negative consequences is that water sources on lower reaches of the Red River Delta and the Mekong Delta will run out due to the hydroelectricity projects of China and Laos and that flooding and environmental pollution will have a bad impact on millions of farmers. Green technologies such as wind and solar are difficult to develop due to Vietnam's land is mostly hilly and densely forested, with level land covering no more than 20%. Mountains account for 40% of the country's land area, and tropical forests cover around 42%. These topographical differences trigger another difficult for green technologies due to its climate variation. Conclusion In conclusion we can easily understand that the implementation of renewable resources is more difficult to implement in developing nations. Currently, Southeast Asia is a region that is actively seeking to achieve this type of implementation. Solar and wind energy are two sources that are gaining popularity among all, but in order to implement them several factors have to been taken into account. Thailand and Vietnam are two countries in Southeast Asia that are considered in rapid development. As part of their developments they are finding new ways of producing energy in a more efficient, ecological and less costly manner. Their governments are coming up with new policies and regulations in order to be successful in these changes and in order to be able to have a better opportunity as green energy producers. With energy demand increasing on both countries, the government is encouraging implementation on renewable energy programs. These programs also include biomass and hydropower based on their geographical strengths. This will also create an environmental impact by reducing their greenhouse gases emissions. 19

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