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Southeast Asia’s ambitious goal to triple its renewable energy production aligns with the United Nations pledge, and China’s record-breaking solar installations in 2023 could play a pivotal role in supporting this transition. China’s addition of 216.9 gigawatts of solar energy, surpassing the United States, has led to a significant drop in solar module prices globally, creating a buyer’s market and making solar energy a more viable option for countries in the region.
The oversupply of modules from China facilitates the expansion of renewable power systems in Southeast Asian nations like Thailand, Vietnam, and Singapore, which are committed to achieving net-zero emissions by 2050 or 2060. Aditya Lolla, Asia Programme Director of energy think tank Ember, notes the positive impact of this oversupply on the affordability and attractiveness of solar energy for these countries.
However, challenges unique to the region persist. While China has benefited from mature markets, access to finance, and well-established grid infrastructure, other Asian countries face hurdles in these areas. The lack of clear rules, financing options, and inadequate grid infrastructure and battery storage systems pose obstacles to the clean energy transition.
China’s investments in solar power projects under its Belt and Road Initiative, particularly in Southeast Asia, amount to $36.6 billion, according to the Global Development Policy Center. Projects such as the Mekong River Floating Solar Project in Thailand and the Cirata Floating Solar Project in Indonesia showcase China’s commitment to the region’s renewable energy development. These investments have not only contributed to overseas projects but also helped regional companies build their capacities, as seen with Citicore Renewable Energy Corporation in the Philippines sourcing photovoltaic panels from China’s Trina Solar.
Despite China’s significant contributions, there’s recognition that more work is needed to fully realize the renewable energy potential in Southeast Asia. Mike Lim, a partner at TRIREC, emphasizes the importance of addressing regulatory challenges and the need for clear, consistent policies and incentives for renewables in the region.
While the oversupply of solar modules from China is a positive driver for the region’s renewable energy transition, experts caution that it alone may not be sufficient to accelerate the shift from coal-based generation. The region still faces hurdles in construction rates, regulatory environments, and overall reduction of fossil fuel reliance. Balancing these challenges with collaborative efforts and shared insights from China could pave the way for Southeast Asia to tap into its abundant renewable resources and achieve its clean energy goals.