Global technology corporation Wärtsilä has just released the report Reshaping the Energy Industry in Southeast Asia. Research shows that the development of flexible power sources is the key factor to help make renewable energy the main source of electricity generation in Southeast Asian countries. From there, promote the energy transition process to reduce greenhouse gas emissions, achieving the goal of net zero emissions by 2050 (Net-Zero).
The study simulates feasible pathways towards the Net-Zero goal of three large power systems in Southeast Asia: Vietnam, Sulawesi Island in Indonesia, and Luzon Island in the Philippines.
According to the International Energy Agency (IEA), in 2020, 40% of Southeast Asia’s emissions came from electricity production, followed by industry (29%) and road transport (18%). %). Leading units in the electricity industry play a pioneering role in the journey to reduce carbon emissions. All the technologies needed to reduce carbon emissions are now commercialized and Southeast Asia is a region that benefits from a diversity of renewable energy sources, including hydropower. , wind power, solar power, bioenergy and geothermal energy.
IEA predicts that to achieve the proportion of 85% of renewable energy by 2050 according to the Paris Agreement, the Southeast Asian region must deploy the construction of power plants from renewable energy with a total capacity of 1,100 GW in the next 30 years – equivalent to Current total renewable energy capacity of China and India combined. However, the electricity systems in many Southeast Asian countries are not compatible with the instability of renewable energy sources. In Vietnam, the rapid development of solar power projects with short construction periods makes the development of the power transmission grid unable to keep up. Congestion on the transmission grid often occurs, leading to the need to cut the capacity of renewable energy sources, causing a waste of social resources.
The above challenges pose a need to increase flexibility in the power system. In addition to solutions for developing hydroelectric power sources, energy storage batteries, simple cycle gas turbines… one of the solutions to consider is the use of flexible internal combustion engines using gas fuel. LNG liquefaction, referred to as (ICE). ICE enables renewable energy to be the most cost-effective energy source by balancing supply and demand and ensuring backup capacity when there is no wind or sunshine. New generation ICE sources have the advantage of high efficiency and lower emissions than traditional Diesel engines, can start quickly and change power quickly. From there, ensure the system operates optimally and meets load demand during peak hours.
Wärtsilä’s research shows that a power system based mainly on renewable energy sources does not have higher costs than the current system. The generating sets are installed in connected modules to help reduce construction and installation time and reduce land area occupied.
In fact, after taking into account carbon prices according to IEA forecasts, the cost of electricity production (LCOE) in power systems when reaching Net zero in Vietnam will decrease by 20% by 2050; decrease by 23% in the Philippines (Luzon) by 2040; and a 23% reduction in Indonesia (Sulawesi) by 2060. A small fraction of fossil fuels will still be used in the optimal power mix in 2050 as a system balancing fuel. However, countries could replace that fuel with sustainable fuels, such as green hydrogen, once widely available.
By applying large-scale flexible solutions to help balance and stabilize power systems, Southeast Asian countries can attract maximum investment in renewable energy as well as promote new technologies, such as green hydrogen. Currently, Vietnam’s Draft Power Development Plan 8 also proposes to develop ICE power sources, to ensure operation of a power system with a high proportion of wind and solar power sources integrated in the coming period. .
According to Mr. Pham Minh Thanh, Vietnam Country Director of Energy, Wärtsilä Group, a power system based on renewable energy sources can help Vietnam solve the problem of fossil fuel fluctuations and constraints to reduce emissions, while promoting future economic growth and job creation. Vietnam’s Net-Zero goal is completely feasible if the power sector takes the necessary actions today and in the next decade.
In the “Net zero” scenario of this study, by 2050, Vietnam needs to build a power system with a total capacity of 646 GW. This system, in addition to providing enough electricity to meet growing demand in Vietnam, also provides surplus electricity to produce 52 TWh of green hydrogen. To exploit the great benefits of a Net zero power system, Wärtsilä recommends that Vietnamese policymakers and regulators need to encourage the addition of flexible power sources, while creating a flexible power supply market. The electricity market is more competitive, attracting domestic and foreign investors to participate in this process.