Sep 11
13
Southeast Asian nations may benefit from China’s full-on development of its domestic market for solar photovoltaic (PV) power. Countries like Indonesia, the Philippines and Malaysia, which have the difficult task of administering territories separated by ocean, are not easily connected to massive electricity grids as one finds on large, contiguous land masses like China.
The geography of some Southeast Asian nations also makes connecting the many disparate communities difficult, as well. Vietnam, Thailand, Cambodia and Laos are all marked by mountainous terrain blanketed by forest. One inexhaustible resource all the Southeast Asian countries share, however, is sunshine. Xu Renhe, the general director of the Economic Development Board of Singapore, stated, ”Southeast Asia is close to the equator and these areas have abundant sunshine. It’s hard to connect the may islands with electrical lines. Solar off-grid power generation has an inherent advantage, then.”
What most solar power plans for Southeast Asia lack, though, is a cost-effective means of bringing electricity to millions of citizens across the varied lands. China’s recent decision to implement feed-in tariffs in its domestic market may bring down the cost of implementing solar power throughout the Association of Southeast Asian Nations (ASEAN).
On August 1, 2011 China’s National Development and Reform Commission (NDRC) introduced a unified standard for the on-grid price of solar power. According to the notice, solar power projects that were approved before July 1st, 2011 and that are constructed and put into operation by December 31, 2011 will have on-grid power pricing of RMB 1.15 per KW-Hour (including tax). For projects approved after July 1, 2011 that are unfinished by the end of December 31, 2011, the on-grid power price will be RMB 1 per KW-Hour, except in Tibet. (The on-grid price in Tibet is RMB 1.15 per KW-Hour.)
The effort is a shot-in-the-arm for a manufacturing industry in China that is suffering from overcapacity and primary markets that have narrowed the windows of opportunity into their countries. As recently as 2008 about two hundred PV manufacturers in China were able to take advantage of subsidies to power producers in Germany, Italy and Spain to support solar power generation on their electricity distribution grids. Three years on and those subsidies have all but been phased out and the number of Chinese PV producers has exploded to nearly a thousand.
The feed-in tariffs the NDRC has announced for the Chinese domestic market are meant to provide access to what could potentially be the largest market in the world for PV products while also meeting burgeoning electricity consumption demand in the country. In addition to energy production constraints, the central government has also set the country the task of reducing its CO2 emissions per unit of GDP by as much as 17 percent by 2015 during its 12th Five-year Plan. The NDRC sees a muscular solar power program as an important means of meeting consumption, market and emissions goals. The Ministry of Finance has announced it will increase funding for Golden Sun Roof-project capacity by one-gigawatt annually from 2013 to 2015,” Meng added.
China’s more assertive thrust into solar power implementation will continue to push down the price of solar panel manufacture. Chinese manufacturing activity the last three years has already driven the cost of PV manufacture to below RMB 0.73 per kilowatt. Coal-generated electricity sets the benchmark for market competitiveness at RMB 0.50 per kilowatt. Competition between China’s PV makers will continue to deflate PV production costs and increase the efficiency of the technology to convert sunlight into electricity.
The Southeast Asian market, with nearly 600 million people, will certainly benefit from the cost-efficiencies gained from market competition within the Chinese marketplace. Already, Chinese solar technology companies have been positioning themselves for the development of Southeast Asia’s market for solar power. China Guangdong Nuclear Power Company (CGNPC) intends to invest more than US$50 million in a biomass solar power station in Singapore. Changzhou-based Trina Solar is teaming up with Solar Energy Research Institute of Singapore (SERIS) to develop high-efficiency silicon wafer solar cell using Trina Solar’s monocrystalline wafers. And Sichuan Han Long Group plans to invest US$100 million to set up its international headquarters and R&D center in Singapore.
As Southeast Asian countries find the cost of fossil fuel subsidies onerous, disparate communities become more anxious for electricity and urbanization requires greater levels of energy, solar power technologies imported from China will become an increasingly attractive complement to more nuanced energy portfolios.
©2011 TrendsAsia Ltd. All rights reserved.
