Solar power, a viable alternative for Brunei
Brunei has made the energy sector in Southeast Asia sit up and take notice with its announcement that the oil-rich state will introduce a Feed-In-Tariff system for solar power, a move that is aimed at diversifying the energy use in the Sultanate and incentivising sustainable energy use.
This is a remarkable step and shows the extent to which the solar industry is growing into new markets such as Brunei, a country whose most pressing problem is definitely not energy supply and the envisioned share of renewables in the energy mix by 2035 is just 10 per cent as opposed to other countries in the region which seek a share of up to 40 to 60 per cent over the same period.
It needs to be seen how the new scheme will be perceived, but Brunei has certainly made a point. While a large part of power demand in Southeast Asia in the coming two decades will still be met by fossil fuels, other conventional energy sources and renewables are beginning to play a serious role in the region. Thailand is one of the largest solar power supporters within ASEAN, while Indonesia banks on its huge geothermal resources and Laos and, to a smaller extent, Cambodia, want to tap their vast hydropower resources.
The only pariah is Vietnam, which has unveiled plans to build up to ten nuclear power plants in the coming 20 years, ignoring the challenges this energy form has brought upon the region after the Fukushima disaster in 2011.
Looking at solar power, the main obstacle is still that its use has to be subsidised. Initial investments are big, but in the long run both maintenance and repair are cheaper than, for example, gas or coal plants and the energy source, the sun, is indefinite. And the development in the sector is far from stagnating: Global studies show that the solar power industry is already moving away from the subsidy scenario towards an economic case to install photovoltaic cells with little or no subsidy in some countries.
For example, the US – the world’s biggest electricity market – is rapidly approaching the point where more than half of its states were at “grid parity”, meaning that no additional subsidies are required for solar installation. Likewise, Chile could become the first subsidy-free solar power nation in the world with more than 3,500 megawatts of projects in the pipeline.
With this development, not just solar power use is growing, but also demand for photovoltaic cells. It could also be an opportunity for Brunei to embark onto this industry and create a new source of manufacturing, which, in turn, could also be a rapid image-changer for the small oil nation.
Do you agree with the high potential of solar and other sustainable energy sources in Southeast Asia? Should Brunei jump on the bandwagon? Let us know through Twitter: @insideinvestor
This comment is part of Inside Investor’s weekly column series in Brunei’s leading newspaper Brunei Times and is published every Monday.
[caption id="attachment_7466" align="alignleft" width="146"] By Arno Maierbrugger[/caption] Brunei has made the energy sector in Southeast Asia sit up and take notice with its announcement that the oil-rich state will introduce a Feed-In-Tariff system for solar power, a move that is aimed at diversifying the energy use in the Sultanate and incentivising sustainable energy use. This is a remarkable step and shows the extent to which the solar industry is growing into new markets such as Brunei, a country whose most pressing problem is definitely not energy supply and the envisioned share of renewables in the energy mix by 2035 is...
Brunei has made the energy sector in Southeast Asia sit up and take notice with its announcement that the oil-rich state will introduce a Feed-In-Tariff system for solar power, a move that is aimed at diversifying the energy use in the Sultanate and incentivising sustainable energy use.
This is a remarkable step and shows the extent to which the solar industry is growing into new markets such as Brunei, a country whose most pressing problem is definitely not energy supply and the envisioned share of renewables in the energy mix by 2035 is just 10 per cent as opposed to other countries in the region which seek a share of up to 40 to 60 per cent over the same period.
It needs to be seen how the new scheme will be perceived, but Brunei has certainly made a point. While a large part of power demand in Southeast Asia in the coming two decades will still be met by fossil fuels, other conventional energy sources and renewables are beginning to play a serious role in the region. Thailand is one of the largest solar power supporters within ASEAN, while Indonesia banks on its huge geothermal resources and Laos and, to a smaller extent, Cambodia, want to tap their vast hydropower resources.
The only pariah is Vietnam, which has unveiled plans to build up to ten nuclear power plants in the coming 20 years, ignoring the challenges this energy form has brought upon the region after the Fukushima disaster in 2011.
Looking at solar power, the main obstacle is still that its use has to be subsidised. Initial investments are big, but in the long run both maintenance and repair are cheaper than, for example, gas or coal plants and the energy source, the sun, is indefinite. And the development in the sector is far from stagnating: Global studies show that the solar power industry is already moving away from the subsidy scenario towards an economic case to install photovoltaic cells with little or no subsidy in some countries.
For example, the US – the world’s biggest electricity market – is rapidly approaching the point where more than half of its states were at “grid parity”, meaning that no additional subsidies are required for solar installation. Likewise, Chile could become the first subsidy-free solar power nation in the world with more than 3,500 megawatts of projects in the pipeline.
With this development, not just solar power use is growing, but also demand for photovoltaic cells. It could also be an opportunity for Brunei to embark onto this industry and create a new source of manufacturing, which, in turn, could also be a rapid image-changer for the small oil nation.
Do you agree with the high potential of solar and other sustainable energy sources in Southeast Asia? Should Brunei jump on the bandwagon? Let us know through Twitter: @insideinvestor
This comment is part of Inside Investor’s weekly column series in Brunei’s leading newspaper Brunei Times and is published every Monday.
