Vietnam, Malaysia lead the race for power growth
Regulators might find it difficult to catch up with rapid developments in the industry.
Vietnam and Malaysia are shaping up to be the most rapidly growing power markets in Southeast Asia, according to Mike Thomas, partner at The Lantau Group. In an interview with Asian Power, Mike talks about how governments in the region should cope with the changes in the power sector.
Which countries best highlight the biggest trends in Asia’s power sector?
Vietnam has really caught the attention of a lot of people just in the last year with the many gigawatts of power coming into the next couple of months. More than a 10% increase in the whole country's power will be new projects. It's inconceivable. We have Malaysia here with LSS 1-3, with almost 7GW subscribed in the most recent one. This was in a country that does not seem that open to solar a couple of years ago.
What do you think is driving the new technologies and growth in Vietnam and Malaysia?
I think it's the speed with which you can get projects done in renewable space. A year is not uncommon or even less compared to a coal plant. If you're trying to develop a coal plant in Vietnam, it might take a decade. You might think you're close for so long.
The countries are still growing very fast, demand is needed. In a sense, projects that can be done more quickly by more parties are becoming attractive and I think you've seen a slow shift in thinking about renewables. There’s probably a little bit of confusion that it might just be cheaper, but certainly, it can be developed quickly.
As renewables are growing at a fast pace, how should governments catch up?
This is a new convergence of technology, data, environmental as well as traditional projects. They all have different regulatory requirements, they all are pursuing different sources of value for different purposes. Totally off the grid, behind the meter.
Policy in the energy sector doesn't always move so quickly. I think the governments are actually going to be behind for some time. That's going to create some challenges in a couple of countries for too much of this, wrong place for that. An incentive that’s oversubscribed, a need that's not fulfilled because the regulatory and commercial won't quite align. I don't know how they're going to catch up, I just know that it’s going to be a problem for a little while.