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Solar photovoltaic (PV) capacity additions are poised to be a central pillar of south-east Asia’s energy future, with floating installations primed to play a critical role, according to Rystad Energy research.
Mirroring the broader Asian region’s dominance of the global floating PV (FPV) market, south-east Asia will account for 10% of the region’s total solar capacity by 2030, encompassing ground-mounted, rooftop and FPV installations. Countries such as the Philippines, Indonesia and Thailand are well-positioned to be at the forefront of this growing trend, the study says.
Addressing land rights is a pivotal challenge for solar developers in south-east Asia due to the predominant use of available land for agricultural purposes. The region grapples with a scarcity of suitable sites for solar farms, intensifying the need for innovative solutions. FPVs have emerged as a viable option, leveraging bodies of water adjacent to agricultural areas. This approach not only circumvents land access tensions but also presents a potential blueprint for other countries grappling with similar issues.
Operational FPV projects in south-east Asia currently amount to around 500 MW combined. However, according to Rystad Energy’s data, an anticipated 300 MW of FPV capacity is expected to be added across south-east Asia in early 2024 alone.
Currently, nine of the world’s top 10 FPV projects by size are in China, with the only exception being the Cirata FPV project in West Java, Indonesia, which was commissioned in November 2023. The project boasts capacity of 145 MW, setting an example that will be followed as more FPV projects enter the fold. Owned by the state utility Perusahaan Listrik Negara (PLN) and Masdar, the Cirata FPV project is the largest of its kind in south-east Asia, surpassing others in mainland China and Taiwan.
In Thailand, companies are contracting FPVs and procuring electricity through private power purchase agreements (PPAs). This strategy is similar to rooftop solar leasing, with individuals or businesses leasing their rooftop space to solar companies. This symbiotic relationship allows landowners to power their businesses with clean energy while mitigating the risk of disputes between solar developers and farmers, who argue for the land to be used for agricultural purposes.
By maximising this approach to land utilisation, south-east Asia can not only sidestep the intricate web of land rights issues but also promote the sustainable integration of solar energy. The success of the Thai model sets a precedent for navigating the delicate balance between agricultural needs and expanding renewable energy infrastructure and could set an example for the region at large, the research notes. Additionally, with a significant portion of south-east Asia covered by dense rainforests, FPV presents an opportunity to increase renewable energy generation without deforestation.
Indonesia, the Philippines and Thailand are expected to lead south-east Asia’s push into floating solar in the years to come. As an archipelago, the Philippines has many large inland lakes that are suitable for FPV, such as Laguna Lake, where there are plans for nearly 3 GW of capacity.
Rystad predicts that Philippines-based ACEN could become the top FPV developer in south-east Asia by the end of this decade. The company is working to commission a 1 GW project on Laguna Lake, along with a 200 MW project in the Filipino province of Rizal. ACEN currently has the largest and fastest-growing solar PV portfolio in the region, which will surpass 3 GW by the time the two FPV projects come online later this decade. Filipino solar company SunAsia and Singapore-headquartered Blueleaf Energy will also build a GW-scale FPV in Laguna Lake, along with projects in other locations in the Philippines.
Indonesia’s extensive use of hydropower complements its ambition for more solar PV. The country has a 1.8 GW FPV project on the horizon at the Duriangkang reservoir in Batam, which is being led by Spanish-headquartered EDP Renewables. The development of FPV projects in Indonesia is expected to accelerate, given the temporary reduction in local content requirements for solar PV until 2025, when the nation’s first PV manufacturing plant is expected to come online.