Increasing solar PV capacity could represent a key pillar of Southeast Asia's energy future, where floating installations will play a crucial role. Reflecting the Asian region's dominance in the global floating solar power (FPV) market, a study by Rystad Energy shows that by 2030, Southeast Asia will account for 10% of the world's total solar capacity. region, including ground-mounted, rooftop and FPV solar installations. . Countries like the Philippines, Indonesia and Thailand are well-positioned to be at the forefront of this growing trend, using FPV to increase their clean energy production capacity.
Resolving land rights issues represents a major challenge for solar developers in Southeast Asia due to the predominant use of available land for agricultural purposes. The region faces a shortage of suitable sites for solar power plants, increasing the need for innovative solutions. In particular, FPVs have emerged as a viable option for utilizing water bodies adjacent to agricultural lands. This approach not only avoids tensions over land access, but also provides a potential model for other countries facing similar problems.
The total operational capacity of FPV projects in Southeast Asia is currently around 500 MW. However, 300 MW of FPV capacity is only expected to be added in Southeast Asia in early 2024, according to Rystad Energy.
Currently, nine of the world's 10 largest FPV projects by volume are located in China, with the exception of the Cirata FPV project in West Java, Indonesia, which was launched in November 2023. The project has an AC capacity of 145 megawatts (MWac) . ), setting the example that will be followed as other FPV projects emerge. The Cirata FPV project, owned by utility Perusahaan Listrik Negara (PLN) and UAE renewable energy company Masdar, is the largest of its kind in Southeast Asia, surpassing other projects in mainland China and in Taiwan.
FPVs have been a game changer in Southeast Asia, fueling the region's clean energy efforts by maximizing its abundant solar resources and overcoming land constraints. Its modular design allows it to integrate with existing hydroelectric dams and opens up huge opportunities for hydropower-rich countries like Laos, Thailand and Indonesia. Additionally, as land rights are a major limiting factor for solar developers in Southeast Asia, where most land is used for agricultural purposes, FPV addresses the coexistence of solar parks and agriculture.
Jun-Yi Zhu, Head of Renewable Energy and Energy Research Asia, Rystad Energy
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In Thailand, companies enter into FPV contracts and purchase electricity through private power purchase agreements (PPAs). This strategy is similar to renting rooftop solar. Individuals or businesses rent their rooftop space to solar companies. This symbiotic relationship allows landowners to power their businesses with clean energy, while reducing the risk of conflict between solar developers and farmers protecting agricultural land use.
By making the most of this approach to land use, Southeast Asia will not only be able to navigate the complex web of land rights issues, but also promote sustainable solar integration. The success of the Thai model sets a precedent for striking a delicate balance between the needs of agriculture and the expansion of renewable energy infrastructure and can become a model for the entire region. Additionally, given that much of Southeast Asia is covered in dense tropical forests, FPV offers the opportunity to increase renewable energy production without deforestation.
Indonesia, the Philippines and Thailand are expected to be at the forefront of floating solar power in Southeast Asia in the coming years. As an archipelago, the Philippines has several large inland lakes suitable for FPV, such as Laguna Lake, which is expected to have an AC capacity of around 3 gigawatts (GWAC).
Philippines-based ACEN aims to become Southeast Asia's leading FPV developer by the end of this decade. The company operates a 1 gigawatt project in Laguna Lake as well as a 200 megawatt project in the Rizal province of the Philippines. ACEN currently has the largest and fastest growing portfolio of solar PV systems in the region, with capacity expected to exceed 3 GW when the two FPV projects come online later this decade. Philippine solar company SunAsia and Singapore-based Blueleaf Energy will also build gigawatt FPVs in Laguna Lake, as well as projects elsewhere in the Philippines.
Indonesia's extensive use of hydropower complements its push for more solar photovoltaic systems. The country has a 1.8 GW FPV project on the horizon at Batam's Duryansang Reservoir, operated by Spanish company EDP Renewables. The development of FPV projects in Indonesia is expected to accelerate due to the temporary relaxation of local content requirements for solar PV systems until 2025, when the country's first solar PV plant is expected to be operational.
Author: Rystad Energia
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