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The COVID-19 pandemic continues to present a significant
challenge to the power market in Southeast Asian nations in the
fourth quarter of 2020. However, despite causing substantial
disruptions to industry and decreasing overall power demand, it has
not slowed down the energy transition towards a more sustainable
and greener system.
Based on the published power market data, a fluctuated trend of
power demand was observed in major Southeast Asian countries by the
fourth quarter of 2020. The following figure illustrates the
2019-20 year-on-year (y/y) monthly power demand growth rate in
Myanmar, Singapore, Malaysia, and Thailand. The overall power
demand grew in Myanmar, with a y/y increment of up to 7.0%.
However, the y/y power demand dropped between 8.5% and 1.0% in
Singapore, Malaysia, and Thailand.
Myanmar recorded a y/y drop of 9.6% in October,
but a growth of 3.7% and 7.0% in November and December 2020. This
fluctuation is due to the enforcement of Factory Restriction from
24 Sep to 21 Oct, where manufacturing factories are required to
close, in order to curb the spread of COVID-19 pandemic. It was
then followed by the General Election and Stay Home Order in
November 2020, where people mostly stay at home instead of going
out for commercial and recreation activities, resulting in overall
less power consumption during weekends. On the contrary, weekday
power demand remained high throughout November and December, due to
the lift of Factory Restrictions and manufacturing sector rushed to
complete their annual orders before the end of 2020.
Singapore's power demand seemed to have
recovered in the last quarter of 2020. Total demand declined by
1.0% y/y and 1.8% y/y, respectively, in October and November, but
rebound in December with 1.75% y/y growth. The power market trend
indicates recovery and growth in the country's economic activities.
Furthermore, with the government's approval of COVID-19 vaccine by
mid of December, it's likely to boost up the business reopening and
contribute to higher power demand in the region.
Malaysia's power demand decline decelerated in
the fourth quarter of 2020, with increasing demand of 1.3% y/y in
October, and an average decline of 1% y/y was recorded for the next
two months. This is due to the surge of new COVID-19 cases that
have led to the conditional movement control order (CMCO) being
enforced by the government in the later months of last quarter. Of
note, essential economic industries are allowed to operate and
significantly lessened the impacts of COVID-19 on the power market.
The drop in power demand was mostly due to the slowing activities
in commercial sectors.
Thailand's power demand seemed to fall more
steadily than in the previous quarter, when it declined between
8.5% y/y and 3.9% y/y, by October and November 2020. The country
announced a nationwide lockdown for the whole October, causing the
power market to crash with a similar contraction rate ever since
the April lockdown. From November 2020, the country allowed a full
boarder reopening for tourism activities, and, to some extent,
relieve the domestic power market from further crashing. December
power market data was still unavailable, but they are estimated to
be stay below pre-COVID-19 lockdown levels owing to the country's
poor economic outlook.
Initiatives taken for thermal power plants clean
production
The uncertain economic crisis triggered by the COVID-19 pandemic
has driven the transition from fossil fuels to cleaner energy
sources to reduce greenhouse gas (GHG) emissions. This move is a
strong indication that Southeast Asian nations are working to boost
energy market resilience and ensure more sustainable growth.
Indonesia as the biggest thermal power market,
has stepped up their decarbonization efforts by approving
regulation on the installation of anti-pollution scrubbers to all
existing coal-fired power plants as well as replacing all aging
thermal plants with renewables. If fully enforced, the scrubbers
will be applied to a combined installed capacity of 11GW in
Java-Bali, and will replace 13GW of aging thermal plant.
Vietnam on the other hand, has proposed a rapid
expansion of renewables and natural gas, suggesting cancellation of
seven planned coal projects and postponed six coal projects until
after 2030 or 2035, in their recent proposal for eighth Power
Development plan (PDP8). Vietnam will only continue to develop 15
coal projects with a combined capacity of 18 GW between now and
2026, which represents 60% of all coal projects listed in the
revised PDP 7.
Lately, Philippines' government is introducing
a coal moratorium to scrap new coal-fired power projects by not
granting permits. The authority also supported the transition from
fossil fuel-based technology to cleaner energy sources amid a
renewable energy push. However, the government has yet to identify
which pre-permit contracts are now at risk.
The power market has been challenged by COVID-19 over the year,
and demand plunge is observed for most Southeast Asian countries
throughout 2020, with Myanmar being an exception with 2.63% y/y
growth. However, the fluctuations in power demand indicate a
resilient recovery in Southeast Asian power markets in post
COVID-19 era. Additionally, COVID-19 has not slowed down the energy
transition in Southeast Asia, where multiple countries made new
announcements to oppose further coal capacity expansion, and
renewables continued to gain momentum.
