SE Asia to hit 34.7 GW of distributed generation by 2020

The installed distributed power generation (DPG) capacity in Southeast Asia is expected to reach 34,747 MW by 2020, up from the 20,450 MW the region had in 2015, according to Frost and Sullivan.

This includes the key types of DPG power plants, namely biomass, waste-to-energy and solar photovoltaic (PV), as well as internal combustion engine-based and temporary rental ones.

“Due to the gap in supply, their geography, and weak power sector infrastructure”, some countries across Southeast Asia have been turning their attention towards DPG in order to avoid recurring blackouts. For instance, such systems can be installed despite the inadequacy of the transmission and distribution (T&D) infrastructure and the topographical challenges in isolated islands such as in Indonesia and the Philippines. In turn, they can help in Myanmar where the low electrification rate and transmission line losses stand at 26% and 25%, respectively.

Indonesia, the Philippines and Myanmar are markets with high potential for the development of such systems. Prolonged delays there in completing base load centralised power generation plants create vast opportunities for diverse DPG solutions that can be quickly deployed to meet soaring electricity demand, energy & environment research analyst, Adwaith Visveswaran, said.

Frost & Sullivan’s latest report -- Trends in the Distributed Power Generation Market in Southeast Asia -- shows that the return on investment (RoI) for DPG developers in Southeast Asia can be hurt by factors such as the cost of batteries for solar systems and the inherent risks in fuel supply contracts.

"Overall, strong policy support and a change in utilities' business models will go a long way in unlocking the true potential of the DPG market in Southeast Asia," says the report.

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