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Large-Scale Development of Renewables in the ASEAN

Economics, Technology and Policy

herausgegeben von: Han Phoumin, Rabindra Nepal, Fukunari Kimura, Farhad Taghizadeh-Hesary

Verlag: Springer Nature Singapore

Buchreihe : Economics, Law, and Institutions in Asia Pacific

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book combines the fundamentals of economics, technology, and policy in deriving feasible solutions to facilitate the large-scale development of renewables in the ASEAN. A unique feature of this book is documenting that achieving large-scale renewables deployment inevitably requires combining these three distinct but interrelated forces of economics, technology, and policy. The economic foundations are guided by the microeconomic foundations grounded on economic efficiency and the associated market designs to deliver short-run economic efficiency including the application of auction designs and cost-benefit analysis. The role of battery technology and utility-scale batteries as enabling technologies for large-scale deployment of renewable energy is evidenced through energy modeling techniques. This book also pays particular emphasis on identifying key policy barriers of large-scale renewable development and pathways to overcome them such as the importance of carbon pricing in ASEAN countries and cross-border electricity trade to improve energy security by achieving clean energy targets. Country-specific case studies and regional case studies are used to study the economic, technological, and policy facets of large-scale renewable development with a view to derive policy lessons and recommendations in decarbonizing economic regions such as the ASEAN. The case studies are carefully selected and supported by rigorous data analysis and modeling as appropriate. This book on energy economics and policy is highly recommended to readers who seek an in-depth and robust overview on the recent empirical evidences of facilitating the large-scale development of renewables with a particular reference to the ASEAN and Asian economies including India and China.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Electricity Markets Design and Large Share of Renewables: Lessons for ASEAN

Abstract

ASEAN economies such as Malaysia and Vietnam have ambitions of establishing liberalized and fully competitive wholesale electricity markets. However, skyrocketing natural gas prices have exposed the vulnerability that liberalized markets globally face from external energy price shocks. ASEAN also has a target of increasing the renewable energy share of its primary energy mix to 35% by 2025. This chapter examines how ASEAN can establish a competitive wholesale electricity market which delivers affordable and reliable electricity while lurching toward achieving greater sustainability. It begins by reviewing the wholesale market design features of Singapore and the Philippines, ASEAN's existing liberalized electricity markets. Next, it draws out market-based policy lessons for ASEAN from the case studies of the eastern Australian national electricity market, the Western Australia wholesale electricity market, and the UK electricity market. Then it argues that the liberalized wholesale electricity market model based on merit-order dispatch may not facilitate integration of large-scale renewables in the absence of appropriate supporting arrangements within wholesale market rules and design and public policy outside of markets. One option is alternative spot market design features such as one proposed in Greece based on market splitting and decoupling gas prices from electricity prices. Liberalized electricity markets require balancing the market with government to achieve renewable energy and net-zero emission targets, by aligning energy policy with climate policy.

Rabindra Nepal, Han Phoumin, Ashish Agalgaonkar

Chapter 2. Multi-objective Auctions for Utility-Scale Solar Battery Systems: Lessons for ASEAN and East Asia

Abstract

Auctions are an increasingly popular means of competitively promoting and procuring renewable energy to meet energy, social, and climate change objectives. To succeed, the technology designs need to accommodate technological progress, declining costs, and increasing Environmental, Social and Governance (ESG) demand. This analysis examines international experiences with large-scale solar photovoltaic (PV) and battery energy storage systems (BESS) auctions, which may be useful for East and Southeast Asia. It revisits auctions' theoretical and conceptual frameworks while concentrating on the ESG aspect from the perspective of such key stakeholders as investors, government, bidders, and communities, regarding efficient allocations of risks, costs, and benefits. It then relates this framework to real-world practices and international evidence on solar PV with and without BESS. The analysis shows that integrating ESG in auction designs and business models is possible and can benefit business and sustainable development. This analysis’ focus on the ESG and solar PV plus BESS in auctions are nearly non-existent in the existing academic literature according to the review by del Río and Kiefer in Energy Policy 173 (2023).

Natsuko Toba, Tooraj Jamasb, Luiz Maurer, Anupama Sen

Chapter 3. Power Trade and Hydroelectricity Development in the Greater Mekong Sub-region: Perspectives on Economic and Environmental Implications

Abstract

This study examines how cross-border power trade affects the development of hydropower potential in the Greater Mekong Sub-region (GMS) in an ASEAN power trade model, drawing economic and environmental implications. Although utilization rate estimates of potential GMS hydropower capacity range from full utilization to under-utilization, the findings of this study strongly suggest that cross-border power trade will promote GMS hydropower and other renewable development, in turn reducing the amount of carbon dioxide emitted in the region as a whole, with associated positive environmental implications.

Youngho Chang

Chapter 4. Tradeable Renewable Energy Credit Markets: Lessons from India

Abstract

India has undergone a significant energy mix transformation over the past decade, with renewables accounting for 30% of installed grid capacity and almost 14% of electricity generation today. These achievements, however, fall short of the ambitious targets set for 2030. The policy package for renewables includes a market-based instrument of tradeable renewable energy certificates (RECs), which provide a channel for an alternative valuation of the green attribute of electricity generation in the country. It also provides for spatial flexibility in green power generation in resource-rich areas and compliance with renewable portfolio obligations through REC purchases by states with shortfalls. This paper analyzes the REC market experience over the past decade and examines the implications of changes in trading rules during that time. It highlights that although the renewable certification rate initially rose sharply from 2% in 2011–12 to 15% in 2014–15, it steadily declined to 3–6% during 2017–21 as REC market prices plummeted and unsold RECs accumulated. While the certification rate has picked up following an REC market design overhaul in 2022, problem of unsold RECs inventory persists. The author concludes that the problems of target underachievement and non-compliance with state renewable purchase obligations must be tackled through deep reforms in the functioning of power distribution companies rather than the REC mechanism per se.

Aparna Sawhney

Chapter 5. Rooftop PV with Batteries for Improving Self-consumption in Vietnam: A Cost–Benefit Analysis

Abstract

Vietnam's energy sector has become one of Southeast Asia’s most vibrant in recent times. Since the adoption of feed-in-tariffs (FiTs) in 2017, the national electricity system’s installed capacity rose from 47GW to 78GW in 2021, 68% of which are contributed by variable renewable energy growth. Market design and transmission capacity deficiencies complicated extending or reforming FiTs for wind and solar after 2020. Vietnam must expand the use of renewables to achieve net zero emissions by 2050 while meeting growing economic demand, necessitating initiatives including energy storage. This study examines the costs and benefits of rooftop solar plus battery in a sample factory in Ha Tinh province, using roughly 115 MWh of grid-connected electricity annually in manufacturing building materials, and installing 137 kWp solar with battery to be self-sufficient. Calculated by PVsyst as a stand-alone system, based on the current policy scheme and the average battery cost, the company can hardly recover its investment. Therefore, the study considers other assumptions such as subsidies, electricity sales together with social and intangible impacts of corporate social responsibility, improved branding, potential CO₂ credit trading, and reduced curtailment risk. It concludes with policy recommendations towards sustainable development target for Vietnam.

Linh Dan Nguyen, Han Phoumin

Chapter 6. The Role of Battery Energy Storage Systems and Market Integration in Indonesia’s Zero Emission Vision

Abstract

Indonesia has committed to achieving net zero emissions by 2060, with emphasis on the electricity sector eliminating harmful gas emissions by that year. Using the Balmorel energy model, this study simulated the impact of the target on optimal capacity expansion, electricity production mix, emissions, and electricity supply costs across 230 grid systems. The results indicate the substantial benefits of integrating solar photovoltaics (PV) and Battery Energy Storage Systems (BESS). Solar energy sees a remarkable capacity increase, reaching 288.7 GWp by 2060. Other renewable sources, including hydro and wind energies, also exhibited significant growth, increasing from 6.2 GW and 130 MW in 2030 to 29.4 GW and 22.5 GW, respectively, by 2060. Intermittent renewables’ growth necessitates a rise in BESS capacity from 1 MW in 2022 to 73.4 GW by 2060. The study also underscores to replace phased-out coal-fired power plants with nuclear power by 2060. The study concludes with policy implications arising from these findings.

Pramudya, Muhammad Indra al Irsyad, Han Phoumin, Rabindra Nepal

Chapter 7. Deployment of Renewable Energy and Utility-Scale Batteries in Australia: Lessons Learned and Policy Implications for Other Countries

Abstract

The huge potential of renewable energy to reduce greenhouse gas emissions has already been demonstrated in Australia, which is positioned well at the forefront of the renewable energy transition despite often changing energy policy. This chapter reviews the most recent trends and outcomes of renewable energy utilization in Australia’s National Electricity Market (NEM). The purpose of this review is (1) to update the most recent renewable energy and battery developments in the NEM, (2) to describe the energy dynamics in South Australia, the most advanced Australian state in terms of penetration of wind and solar PV generation, (3) to summarize current and future cost projections of renewable generation technologies in Australia, and (4) to summarize the main policy support schemes used in Australia to facilitate renewable energy investments. This chapter could help inform energy and climate policy decision making in Australia and other countries, including in Southeast Asia.

George Grozev, Ty Christopher, Pascal Perez

Chapter 8. Effects of Digital Technologies on Renewable Energy Development: Empirical Evidence and Policy Implications from China

Abstract

Despite widespread employment of digital technologies in renewable energy generating, transmitting, distribution, storage, and pricing, there is a lack of empirical investigation into the effects of digital technologies on renewable energy development. In this context, this paper estimates the influence of digital technologies on renewable energy market integration in China. This study conducts a series of regressions based on provincial data from 2003 to 2020 and an index of digital technologies measured with the entropy weight method, and finds that digital technologies have significantly bolstered renewable energy development in China. To analyze how to overcome specific barriers to renewable energy expansion, this paper also examines the case study of Qinghai province, which has the potential to power itself with 100% renewable energy. These findings provide valuable policy guidance for ASEAN countries regarding achieving carbon–neutral energy transitions.

Xuemei Zheng, Lu Wang, Rabindra Nepal, Han Phoumin

Chapter 9. Potential Solar, Wind, and Battery Storage Deployment for Decarbonization in ASEAN

Abstract

Achieving carbon neutrality will require multiple approaches to decarbonizing greenhouse gas emissions across all sectors. Accordingly, this study investigates the maximum contributions of solar and wind deployments together with energy storage potentials with the objective of changing such deployments from intermittent supply to more stable load by employing energy storage systems. To this end, we use data generated by a linear programming model to minimize total system under such constraints as CO₂ emissions and supply–demand balance, in order to assess the aforementioned maximum contributions in ASEAN’s decarbonization scenario. Our findings provide policymakers a second opinion on how to scale up solar and wind with battery storage to contribute to future significant ASEAN decarbonization.

Han Phoumin, Rabindra Nepal

Chapter 10. India’s Cross Border Electricity Trade with BIMSTEC Countries

Abstract

This chapter assesses the present status of India’s Cross Border Electricity Trade (CBET) with partners Nepal, Bhutan, Bangladesh, and Myanmar, and its effects on energy security. A mathematical model, consisting of source, trade, and result functions, was developed based on simple energy balance with and without CBET. In the first scenario, India and its trading partners are independently simulated for energy balance to individually assess energy deficit and storage dynamics. Drought season could cause serious deficits for countries dependent on single power sources, undermining energy security in ways that adding renewables to the mix might address. In the second scenario, interconnected grids could reduce storage and generation capacity and curtailment period for renewables. Trading partners dependent on single power sources might avoid deficits as energy could be imported, showing how CBET measurably affects energy security, helping achieve clean energy targets, minimize curtailment periods, and promote renewable energy penetration.

Sangeeta V. Sharma, Han Phoumin, Vinod K. Sharma, Rabindra Nepal

Chapter 11. Toward a Coherent Policy Approach to Solar Uptake in Southeast Asia: Insight from Indonesia and Vietnam

Abstract

This chapter examines Indonesia and Vietnam’s experiences with adopting utility-scale solar power, finding that despite landscape pressures, such as the need to address energy security concerns and policy commitments to emissions reduction, challenges in local contexts and incumbent electricity regime often hindering translating these pressures into action. It also highlights the need for a coherent policy framework that can address both the emergence and wider adoption of niche electricity technologies and reconfigure the incumbent regime. Developing such a framework requires careful planning and consideration of cross-cutting issues, however, which can take time. A key strategy to reconcile the need for rapid transitioning to address the climate crisis with the usually prolonged transition process is to focus initial efforts on promoting clean technologies that already play a significant role in the energy mix, which could reduce immediate demand for major regime change and ensure a quick start to the transition, while buying time to plan to reconfigure the incumbent regime for a clean electricity future.

Muyi Yang, Achmed Shahram Edianto, Thi Anh Phuong Nguyen, Rabindra Nepal, Han Phoumin

Chapter 12. Impact of Policy on Solar PV Supply for ASEAN and Beyond

Abstract

This paper assesses the role of renewable energy policy in solar photovoltaic energy supply. Cross-country findings are based on cross-sectional regressions and panel analysis including fixed effects and multiple approaches to give robust standard errors for within-group and cross-sectional dependence, showing that a composite renewable energy policy index has a significant influence at lags of up to six years on changes in solar energy supply per capita. There are also key results for more specific renewable energy policy types, with carbon pricing and such incentives as feed-in tariffs having the most robust impact on solar use. Association of Southeast Asian Nations (ASEAN) member states could benefit from further focus on renewable energy policies, given their relatively low solar photovoltaic supply per capita levels and renewable policy scores alike. The analysis suggests that expanded implementation of carbon pricing in ASEAN member states is an opportunity not to be missed.

Rohan Best, Rabindra Nepal, Han Phoumin

Titel: Large-Scale Development of Renewables in the ASEAN
herausgegeben von: Han Phoumin
Rabindra Nepal
Fukunari Kimura
Farhad Taghizadeh-Hesary
Verlag: Springer Nature Singapore
Electronic ISBN: 978-981-9982-39-4
Print ISBN: 978-981-9982-38-7
DOI: https://doi.org/10.1007/978-981-99-8239-4