Potential for increasing the role of
renewables in Mekong power supply
(MK14)
Technology Review
Mekong Forum 2013
Tim Sulj...
Outline
•
•
•
•
•
•
•

Suitable renewable energy technologies
Technical potential in the LMB
Costs of renewables
Overcomin...
Renewables potential and deployment

Source: Grubb curve in Electric Power Research
Institute (2009)
Assessment of technology suitability to
the Mekong
Renewable energy potential in LMB
• Highest potential is

solar, mostly in Thailand
and Vietnam
– 76GW, currently 0.374 GW...
Utility-scale

Small-scale / off-grid

Renewables costs

Average generation costs
LMB: 0.103 – 0.137
(ICEM, 2013 – based o...
How significant is cost as a barrier?
• Biomass and small hydro is competitive with
current generation sources in the regi...
Ways to overcome the cost barrier?
• Public investment in
feed-in-tariffs

– Thailand has stimulated
renewables deployment...
Aside from cost?
• Challenge of intermittent and volatile solar and
wind resources
– Outputs depends on when the sun shine...
Managing intermittency of solar and
wind resources
Once intermittent generation reaches ≈ 20%:
1. Renewable energy output ...
Solar PV
Bangchak Solar Farm 38MW
Ayutthaya, Thailand

$3,000 / kWp
27.37 c/kWh

 Best performance in direct
sunlight
– T...
42% (20112012)

Solar growth
60%
p.a.(200
72012)
Source: REN21 (2013)

Solar capacity growth in Thailand

…LMB growth in s...
Solar development potential in LMB
Solar farm – utility scale

Solar rooftop
By 2025, an
estimated:
464,300 rooftop
solar ...
Solar - levelised cost trends for
good resource (6.5 kWh/m2/day)

Generation costs projected to fall

Source: Hearps, Patr...
Solar module prices - historical

Module prices driving cost reductions

Source: IRENA (2013) Renewable Power Generation C...
Solar investment cost components
• Module costs
largely correspond
with international
market price
• Balance of system
cos...
Balance of system costs for residential
systems: USA vs Germany
• Similar module costs, but different BOS
– US total costs...
Observations in Thailand: solar farms
Thailand solar farms

International experience
Utility scale in USA in 2010 with mod...
What we could see in Viet Nam and
others as markets develop
• In Viet Nam, current capital costs ≈ $5 / Wp
– More in Cambo...
Similar trends for wind power

Generation costs projected to fall

Source: Hearps, Patrick, and Dylan McConnell. "Renewabl...
Wind investment cost components:
turbine and other costs

Source: Melbourne Energy Institute (2011)
Renewable Energy Techn...
Wind development potential in LMB
19% (20112012)

By 2025, an estimated:
292 wind farms with total
capacity 8,760MW.

25%
...
Conclusions
• Biomass and small hydro already financially
viable and meet load characteristics
– But, they are on a small ...
THANK YOU

Tim Suljada, ICEM
(tim.suljada@icem.com.au)
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3rd Mekong Forum on Water, Food & Energy 2013. Presentation from Session 12: Alternative electricity sources and planning for the Mekong.

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  • Levelised cost (calc of present value of energy generation costs over the full lifetime for comparison)Note range of different costs within technologies and average values in different regionsUtility scale = OECD fossil fuel price + small-scale = dieselgensetIs cost a barrier? Within the range Upfront investment costIn Vietnam:Sub-critical coal = 0.068Combined cycle gas = 0.072
  • Biomass/biogas estimates could be significantly higher
  • Public good justification: reduces pollution associated with fossil fuelsThailand – link to Jiab’sAdder rates to existing wholesale price of electricity paid by the utility EGAT over 7 or 10 yearsSolar adder of 8 Baht/kWh or (26.7c/kWh), which came down to 6.5 Baht/ kWh (21.7c/kWh)Biomass/biogas around 0.01 c/kWh and wind around 11-15c/kWh depending on sizeStrong growth in PPAs signed, but some issues have meant slower than hoped installationsVietnam – link to Khanh’s
  • Link to John’s presentation
  • Module price should largely flow through to Mekong countries, butWith the exception of Thailand, markets are smaller meaning higher margins required for tech suppliersThere is some local solar panel assembly in Thailand and VietnamMany utility scale plants in Thailand are still importing panels, taking advantage of import tax exemptionsBalance of system costs vary considerably between countriesStructural, engineering, hardware supplier margin and electrical costsCosts reduce as theindustry is established and a greater degree of vertical integration is achieved from module supply to installation
  • Note Thailand observations are utility scale (cheaper in general than residential rooftop described on previous slide)I understand latest observations this year show module costs comprising approx42% in 2013
  • Technology review

    1. 1. Potential for increasing the role of renewables in Mekong power supply (MK14) Technology Review Mekong Forum 2013 Tim Suljada (tim.suljada@icem.com.au)
    2. 2. Outline • • • • • • • Suitable renewable energy technologies Technical potential in the LMB Costs of renewables Overcoming technical barriers to deployment Solar PV status and growth prospects Wind status and growth prospects Conclusion
    3. 3. Renewables potential and deployment Source: Grubb curve in Electric Power Research Institute (2009)
    4. 4. Assessment of technology suitability to the Mekong
    5. 5. Renewable energy potential in LMB • Highest potential is solar, mostly in Thailand and Vietnam – 76GW, currently 0.374 GW • Wind and biomass significant – Wind: 12GW mostly in Viet Nam (currently 0.134GW) – Biomass: 5.5GW across region (currently 1.1GW)  Current LMB power plans include 104GW in new capacity by 2025 Source: ICEM (2013)
    6. 6. Utility-scale Small-scale / off-grid Renewables costs Average generation costs LMB: 0.103 – 0.137 (ICEM, 2013 – based on Current PDPs to 2025) Source: IRENA (2013)
    7. 7. How significant is cost as a barrier? • Biomass and small hydro is competitive with current generation sources in the region – Scale? Collectively ~15GW potential • Wind is nearing competitiveness – 4-16 c/kWh globally, around 12c/kWh non-OECD Asia – Potential is ~12GW • Solar more costly – 9-40 c/kWh globally, around 30c/kWh non-OECD Asia – Potential is ~76GW
    8. 8. Ways to overcome the cost barrier? • Public investment in feed-in-tariffs – Thailand has stimulated renewables deployment with attractive tariff rates for all technologies – Vietnam has a modest feed in tariff for wind • Investment is more financially viable for consumer and may bring down capital costs over time by creating a larger market Effect of German FiT
    9. 9. Aside from cost? • Challenge of intermittent and volatile solar and wind resources – Outputs depends on when the sun shines and the wind blows  low capacity factors & hard to predict – Baseload power generation sources like hydro and coal cannot be ‘swapped’ for solar and wind – Similarly, peaking plants such as gas (CCGT), which can be turned on to respond to energy use patterns • Biomass, small hydro and geothermal can meet these needs, but make a small contribution
    10. 10. Managing intermittency of solar and wind resources Once intermittent generation reaches ≈ 20%: 1. Renewable energy output correlation with load – Peak shaving effect of solar and daytime a/c driven peaks 2. Distributed small-scale generation sources – Emerging literature on the balancing effect of aggregating many dispersed generation sources 3. Load shedding – Utility pays major energy users not to draw from the grid 4. Storage – Batteries can smooth power output, but expensive 5. Backup generation capacity – CCGT, hydro dispatch to compensate, but expensive
    11. 11. Solar PV Bangchak Solar Farm 38MW Ayutthaya, Thailand $3,000 / kWp 27.37 c/kWh  Best performance in direct sunlight – Thailand: 5-6.5 kWh/m2/day – Viet Nam: 3-6.25 kWh/m2/day  Scattered light on cloudy days, reduced output Rooftop (<5 kWp) • Capital: $2,275 – 5,000 /kWp • Generation: 16-55 c/kWh Utility scale (<250 MWp) • Capital: $1,300 – 2,760 /kWp • Generation: 9-40 c/kWh
    12. 12. 42% (20112012) Solar growth 60% p.a.(200 72012) Source: REN21 (2013) Solar capacity growth in Thailand …LMB growth in solar PV driven by Thailand with 362MW installed capacity in 2012 (A total of 12MW were installed in other LMB countries in 2012) Source: Tongsopit & Greacen (2013)
    13. 13. Solar development potential in LMB Solar farm – utility scale Solar rooftop By 2025, an estimated: 464,300 rooftop solar of 929MW. By 2025, an estimated: 800 solar farms of total capacity 16,000MW. Source: ICEM (2013) SEA of GMS Power Planning
    14. 14. Solar - levelised cost trends for good resource (6.5 kWh/m2/day) Generation costs projected to fall Source: Hearps, Patrick, and Dylan McConnell. "Renewable Energy Technology Cost Review." Melbourne Energy Institute (2011): 1-58
    15. 15. Solar module prices - historical Module prices driving cost reductions Source: IRENA (2013) Renewable Power Generation Costs in 2012: An Overview, IRENA: Abu Dhabi
    16. 16. Solar investment cost components • Module costs largely correspond with international market price • Balance of system costs are locally specific and vary considerably between countries Source: Melbourne Energy Institute (2011) Renewable Energy Technology Cost Review
    17. 17. Balance of system costs for residential systems: USA vs Germany • Similar module costs, but different BOS – US total costs were double Germany’s in 2011 • Will costs in the US come down with installed capacity due to learning rates and economies of scale? Possible accumulation period also experienced in Germany Source: : Berkley Lab in Melbourne Energy Institute (2011) Based on 8,000 residential rooftop solar systems in 2012
    18. 18. Observations in Thailand: solar farms Thailand solar farms International experience Utility scale in USA in 2010 with module cost $1.90  total cost $3.50 Investment cost components 4 3.5 Investment cost [$/Wp] 3 Total 2.5 2 Module 1.5 1 0.5 Balance of system 55% Source: Rocky Mountain Institute (2010) 73% Date of planned investment 12/16/11 10/16/11 8/16/11 6/16/11 4/16/11 2/16/11 12/16/10 10/16/10 8/16/10 6/16/10 4/16/10 2/16/10 12/16/09 10/16/09 0 • Improved racking design Consistent regulations for business Public information on project development Source: UNFCCC CDM data on 13 Thailand solar farms and spot prices for • • solar modules at time of investment
    19. 19. What we could see in Viet Nam and others as markets develop • In Viet Nam, current capital costs ≈ $5 / Wp – More in Cambodia and Laos where there is no local manufacturing and smaller markets • As in Thailand, the module cost is likely to be similar to international rates – Above $1 / Wp depending on size of order – Balance of system costs, including margin for hardware suppliers likely to be upwards of $4 / Wp • Likely to remain higher than Thailand until market develops with installation volume
    20. 20. Similar trends for wind power Generation costs projected to fall Source: Hearps, Patrick, and Dylan McConnell. "Renewable Energy Technology Cost Review." Melbourne Energy Institute (2011): 1-58
    21. 21. Wind investment cost components: turbine and other costs Source: Melbourne Energy Institute (2011) Renewable Energy Technology Cost Review
    22. 22. Wind development potential in LMB 19% (20112012) By 2025, an estimated: 292 wind farms with total capacity 8,760MW. 25% p.a.(200 72012) Source: ICEM (2013) SEA of GMS Power Planning Source: REN21 (2013)
    23. 23. Conclusions • Biomass and small hydro already financially viable and meet load characteristics – But, they are on a small scale • Wind and solar potential is on a large enough scale and will soon be financially viable 1. Financial incentives needed in the short-term 2. Intermittency and volatility must be considered once renewables proportion reaches ≈ 20% • Thailand offers a good example for the LMB – Financial incentives have developed the market, which appears to have brought down local costs
    24. 24. THANK YOU Tim Suljada, ICEM (tim.suljada@icem.com.au)
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