The Future of Power and Electrification
Solar and storage projects are becoming more widely understood. So far, in emerging markets most investments have involved public sector finance; the technology is gaining more integrated and efficient systems to support commercially driven projects.
The future of storage
EDF is a top 5 global power and utility company with a 30-year history in Asia including nuclear and wind power in China. Jean-Philippe Buisson discussed EDF’s portfolio in South East Asia and India investments and operations including large scale 1GW hydropower dam in Laos and gas-to-power projects in Vietnam. Nuclear power is on the periphery for those of us in this region, however Jean-Philippe emphasised that in a low-carbon world, electricity generation using nuclear power is considered zero carbon; and that gas-to-power is a good energy transition strategy.
Wind and solar PV have a strong future in EDF’s India business. ASEAN is currently a small part of EDF’s overall business. However, plans are in place to multiply its regional business in the coming decade. These include hydropower in Myanmar and Vietnam and EDF is considering new countries for wind and solar including Vietnam Indonesia, Laos and Myanmar.
As renewables and storage ‘go mainstream’ in a region where many grids are highly based on coal generation there are opportunities for technology investments such as flexible solar arrays on rooftops that have not been designed to carry heavy loads. The panel noted that banks have moved to advisory roles in principal investments and creating new finance solutions as the world transitions away from rotating generation. More renewable investments are becoming similar to merchant asset markets with storage seen as mitigating risks. A recent large-scale project in Vietnam demonstrated that solar with battery storage was lower cost than equivalent LNG-to-power.
Indonesia has a huge opportunity to reduce greenhouse gases. However, a core issue is grid access and bankability of a power purchase agreement with state-owned PLN as an off-taker. Something discussed at one of our panel events earlier in 2019. Jean-Philippe urged optimism and saw access via microgrids with a mix of Renewable energy and local gensets. EDF is pursuing hybrid solutions including wind and battery and seeking ways to work with PLN. A major outage in Jakarta in 2019 pushed thinking towards new solutions for distribution and supporting the grid. Other markets are more receptive. The Philippines is seeing many renewable projects. In markets where there are many isolated grids, maintaining old kit and persevering with inefficient and expensive, diesel generation will not take economic development and carbon reduction very far. New business and financial models are required to bring renewables and storage into the mix and eventually replacing traditional assets.