Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Entering the third quarter of 2020, the Southeast Asia region
power market is being tested once more by a second wave of
COVID-19. Although easing measures were implemented not long ago in
the second quarter, several countries have had to reimpose partial
lockdown in the third quarter to prevent the spread of the virus.
The staggered hike in new COVID-19 cases has also slowed the
already sluggish power demand in most of Southeast Asian
markets.
Based on the power market data, a fluctuated trend of power
demand was observed in Southeast Asian countries by third quarter
2020. The following figure illustrates the 2019-20 year-on-year
(y/y) monthly power demand growth rate in Vietnam, Myanmar,
Malaysia, Thailand, and Singapore. The growth in power demand was
observed in Vietnam and Myanmar, with a y/y increment between 3%
and 9%. However, y/y power demand dropped between 6% and 0.4%
across Singapore, Malaysia, and Thailand. The variation in power
demand growth reflected the changes in Southeast Asian power
markets that were associated with the surge in COVID-19 cases.
Vietnam's power demand seemed to have recovered
from July, when it recorded a y/y growth of 7.2%. However, Vietnam
was hit by a second wave, with a surge in COVID-19 cases in early
August 2020. This was followed by the enforcement of partial
lockdown in the country. The growth of power demand in August
dropped to 3.2%, owing to the closure of the industrial area.
September's power demand has yet to be released, but y/y growth
rate is expected to be slightly higher than August.
Myanmar recorded a y/y growth between 5.9% and
9.1% in the third quarter, which is much higher than the growth
during pre-COVID-19 lockdown periods. This is due to the
manufacturing sectors moving into expansionary territory in July
and peaking in the middle of August. The country was then hit by a
second wave of COVID-19 in early September, with an ensuing partial
lockdown. This slowed down industrial activities and stalled power
demand.
Malaysia recovered slightly in power demand
compared with the second quarter, which had a decline between 1%
and 21.6%. Y/y growth in July fell by 3%. Additionally, power
demand dropped by an insignificant 0.9% y/y in August, and 0.4% for
the following month's y/y power demand growth data that is cut off
by 20 September. The power demand recovery indicated the success of
the fiscal stimulus package launched by the government in driving
the recovery of economic activities. To date, five economic
stimulus packages totaling 305 billion Malaysian ringgit
(approximately $73.5 billion) have been unveiled by Malaysian
government, covering tax relief, employment-related measures, and
economic stimulus initiatives to counter the effects of the
pandemic. However, Malaysia was hit by a new wave of COVID-19 in
mid-September and power demand is likely to drop further in late
September.
Thailand's power demand decreased at a slower
pace in July with a drop of 3.3% y/y in power demand growth. Power
demand seemed to fall more steadily than in the previous quarter,
when it declined between 6.8% and 8.7%. The economic contraction in
July 2020 was less than second quarter 2020 because of the
reopening of business activities; this suggests a slow recovery
momentum in power demand. August and September power market data
were still unavailable, but they are estimated to be stay below
pre-COVID-19 lockdown levels owing to the country's poor economic
outlook.
Singapore's power demand was at similar
reduction levels after the country's lockdown easing in June.
Because of the slowed recovery of Singapore's economic activities,
the country is still recording a significant declining trend in
power demand. The country's power demand fell by 5.2% and 3.9% in
July and August y/y, respectively. The y/y power demand growth in
September was cut-off on 27th, at a drop of 6.3%. The decline in
power demand correlates with the country's economic outlook
forecast, which showed economic contraction was worse than initial
estimates.
Year-to-date (YTD) commissioning of new thermal power
plants
YTD commissioning of new thermal plants decreased sharply as
compared with 2019 in Southeast Asian regions, except for Myanmar
and Vietnam (see the following figure). Comparing the total
installed capacity of new commissioning plants, the new thermal
power plants that commissioned in January-September 2020 was 3.8
GW, recording only one-third of the 2019 annual capacity
addition.
Indonesia remained the biggest thermal market, with 1,131 MW of
subcritical coal-fired power plants and 952 MW of gas-fired power
plants reaching commercial operation date (COD). Despite Vietnam
maintaining a large project pipeline, only one project came
online—688 MW Duyen Hai 3 extension that was an originally
planned COD of 2018. Surprisingly, Myanmar was able to fast-track 1
GW of gas-fired power plants in a very challenging construction
deadline designated in an emergency tender. As for Malaysia,
Thailand, and the Philippines, no new thermal plants came online
between January and September. The reduction in plant commissioning
is owing to the lower country targets, as well as projects delayed
by the COVID-19 pandemic. For example, the 668 MW Dinginin power
station in central Luzon, Philippines, originally scheduled to go
online by second half 2020, was delayed as the travel ban stopped
Chinese engineers from being present on-site to perform plant
testing and commissioning process.
Conclusion
The power market was hit again by the second wave of COVID-19
and the resulting plunge is well seen for most Southeast Asian
countries. Vietnam and Myanmar were an exception, where demand
recovered in the third quarter; however, the outlook for these
countries in the fourth quarter is still cloudy. Additionally,
COVID-19 likely has delayed the construction of many thermal power
plants in the region and more measures need to be quickly
implemented to cope with the damage caused by the pandemic.
