Renewable Energy: Indochina, a hot destination for clean energy

The CLMV economies or Indochina, comprising Cambodia, Laos, Myanmar and Vietnam, are powering up clean energy projects for sustainable development, according to Angelica Buan in this report.

Rising demand for renewable energy

Climate-positivity with sustainable packaging

The rising economy of the Indochina region is increasing demand for energy that is expected to triple by 2035, with the electricity and natural gas sectors to see significant capacity additions.

As the Asian sub-region continues to boost its economic growth, and as its economic status belly up to that of its ASEAN peers, it also continues to improve access to energy for powering its households and industries. Therefore, the region is improving its energy mix as it diversifies, if not weans off, from coal and fossil fuels by increasing the renewable energy share.

With an estimated US$20 billion investment annually to fund capacity additions, the sub-region must also seek private infrastructure commitments as well as buoy the domestic infrastructure sector with financing from banks and institutional investors at commercial terms.

Power generation in the CLMV region is projected to grow 5.7% annually through to 2035, to 682 billion KwH, according to an ANZ Bank report. Of the countries, Vietnam’s energy generation is projected to grow the fastest, tripling its capacity from 44GW currently to 120GW in 2035.

Meanwhile, the CLMV group is on track to achieving the Sustainable Development Goals (SDG) set by the United Nations, in particular Goal 7, which hones in on affordable and clean energy and is based on the premise that energy is the main contributor to climate change, producing approximately 60% of greenhouse gases (GhG).

Vietnam: cutting carbon emissions with the forces of nature

Climate-positivity with sustainable packaging

Vietnam’s population has crossed 97 million and could reach 120 million by 2050, according to the World Bank. The country, which has been reliant on fossil fuels, is thus increasing demand for cheap yet clean energy.

On its way to hitting the Goal 7 target, the country’s renewable energy development outlook to 2030 includes broadening access to sustainable and reliable energy services. It also intends to reduce GhG emissions by 45% in 2050; increase its share of solar-heating devices for households to 50% in 2050; amp up to 100 million by 2050 the application of biogas technologies and increase biofuels production by 25% by 2050.

Meanwhile, huge infrastructure projects are on the cards. One is the Da Mi Ham Thuan Da Nhim Hydro Power (DHD), with a US$37 million financial package from the Manilabased Asian Development Bank (ADB). It involves installing a 47.5 megawatt peak (MWp) of floating solar photovoltaic (PV) power generation panels on the man-made reservoir of its existing 175 MW Da Mi hydropower plant, the country’s first large-scale and Southeast Asia’s largest installation of floating PV panels. DHD, a subsidiary of Vietnam Electricity (EVN) Power Generation Corporation, currently owns and operates four hydropower plants and the latest hydropowersolar project is expected to boost the share of renewable energy to Vietnam’s energy mix.

Climate-positivity with sustainable packaging

Another mammoth project is the US$390 million wind farm cluster in the central province of Quang Binh, which broke ground in September. Helmed by B&T Wind Power JSC, the 2,244-ha wind power project includes investors such as AMI AC Renewables, a joint venture between Philippine-based Ayala Corporation’s power generation arm AC Energy and AMI Renewables. Construction is in three phases with each engaging Dutch contractor Vestas Wind Systems; Vietnamese Facon Vietnam Construction JSC and V. Tech Vietnam.

Meanwhile, two incoming 53 MW projects, both by Vestas, are also expected to be commissioned by the third quarter of 2021. The two wind projects: Phu Lac Phase 2 wind farm and Loi Hai 2 wind farm, located in the Binh Thuan and Ninh Thuan provinces, are owned by Thuan Binh Wind Power Joint Stock Company (TBW), a subsidiary of Xuan Cau Company.

This is Vestas’s second-time collaboration with TBW that owns the 24 MW Phu Lac Phase 1 wind farm commissioned in 2015 with 12 V100-2.0 MW wind turbines.

Vestas, meanwhile, also has another 29 MW project from Vietnamese developer Soc Trang Energy Joint Stock Company, also a subsidiary of Xuan Cau. Soc Trang 7 will feature seven V150-4.2 MW turbines with customised towers placed on reinforced onshore foundations raised above sea level in the shallow near-shore waters.

Another partnership that is bringing renewable energy goals closer to the country’s target is General Electric (GE). It is collaborating with Phuong Mai Wind Power JSC to provide 11 2.4 MW-116 turbines and technical advisory service for Phuong Mai 1 wind farm.

The Binh Dinh province-sited Phuong Mai 1 project is expected to start generating energy by 2021. This is the second wind farm in Vietnam using 2.4 MW-116 turbines.

GE is currently operating 128 MW in Vietnam and is one of the oldest and largest OEMs in the country. It has established renewable energy footprints that include wind and solar farms as well as hydro and grid solutions.

Laos: energy diversification with hydropower solutions

Laos, with an economy hinged largely to its rich natural resources and agriculture, is also tapping its natural resources for renewable energy to feed its energy requirements. While it has included in its medium term goal of accelerating hydropower projects, the government acknowledges energy diversification to be more sustainable.

Non-hydro renewables have been explored and, according to a 2018 OECD economic outlook report, are intended to increase their share to 30% of total consumption by 2025. The country’s potential to develop solar power complements its strength in hydropower generation. It is this area that Laos needs to close the gap with because, according to the OECD report, its share of solar power in the nation’s electricity output is small.

For achieving the Goal 7 in UN’s SDG, the country is looking into investing in solar, wind and thermal power infrastructure.

For hyrdropower, project investments are pouring in. One of the most recent is Nam San 3B Power Sole, which operates the Xiangkhouang-sited 45 MW hydropower, and has been acquired by BCPG Indochina for US$113 million from PSG (Phongsubthavy Roads and Bridges Construction and Irrigation). Nam San 3B is now under power purchase agreement (PPA) with state-owned Électricité du Laos (EDL) for 27 years, starting from the commercial operation of 2015. From 2022, the two hydro power projects of BCPG, Nam San 3A and Nam San 3B, will be under PPA with EDL for 25 years, resulting in an extension of PPA period from 2042 to 2047.

Climate-positivity with sustainable packaging

This is BCPG’s second hydro power project in Laos. The first is the 69 MW Nam San 3A, also in Xiangkhouang, acquired in 2019 for US$174 million.

BCPG is also building what is claimed as ASEAN’s largest wind farm, with a capacity of 600 MW, with an investment of US$840 million. The Swan project is starting up construction and is expected to operate by 2023.

Meanwhile, Power Construction Corporation of China is also building a hydropower facility along the Nam Ou River. The cascade hydropower project is developed in two phases, with a total installed capacity of 1,272 MW. When completed, it is expected to generate 12% of the electricity supply in Laos.

Cambodia: solar energy for improved power access

More than half of Cambodia’s power generation is sourced from hydropower. However, it is also reliant on coal (20%) and fuel oil (8%). The country’s electrification rate is the second-lowest in Southeast Asia at 76% in 2020, after Myanmar (71% in 2020), according to the International Energy Agency (IEA) data. However, the country is poised to achieve 99% energy access rate by 2030 and plans to raise its power generation capacity by building hydropower and coal-fired plants.



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