Southeast Asia Hydropower Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Southeast Asia Hydropower Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Southeast Asia Hydropower Market is expected to reach 52.722 GW by the end of this year and is projected to register a CAGR of over 7.9%.

The market was negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the long term, factors such as increasing investments in hydropower plants and increasing demand for renewable energy are likely to drive the market.
• On the other hand, the high initial cost of hydropower compared to other forms of renewable energies like solar and wind energy is expected to restrain the growth of the market.
• The technological advancements in efficiency and decrease in the production cost of hydropower projects are expected to create ample opportunity for market players in Southeast Asia.
• Vietnam is expected to be the largest market for the region's hydropower market due to increasing investment in the sector and the highest installed capacity of hydropower energy in the region.

Key Market TrendsLarge Hydropower to Dominate the Market

• Large-scale hydropower plant uses flowing water to drive huge water turbines to generate renewable energy. In order to generate significant amounts of hydroelectricity, lakes, reservoirs, and dams are required to store and regulate water for later release for power generation, irrigation, domestic use, and industrial use.
• Large-scale hydropower plants can be classified into several types, which are conventional hydroelectric dams, pumped storage, run-of-the-river, and tidal. Although large hydropower plants are expensive to install, they produce electricity at a low cost, especially in large cities. According to International Renewable Energy Agency, the global weighted average Levelized Cost of Energy (LCOE) of newly commissioned hydropower projects in 2021 was USD 0.048/kWh.
• Also, in Southeast Asia, hydropower dominates the renewable energy industry. In accordance with the Laos Power Development Plan 2020 –2030, the nation's hydropower capacity is expected to exceed 14 gigawatts by 2025. By 2025, renewable energy will represent 30% of the total energy mix, and hydropower is going to be a major component of this increase.
• Moreover, in December 2021, LNT & Partners assisted Dakdrinh Hydropower JSC in obtaining USD 95 million in loan financing from the Asian Infrastructure Investment Bank (AIIB) and Natixis Bank for the 125 MW Dakdrinh Hydropower Plant Project, Vietnam. The funds are going to be used to refinance existing debt on Dakdrinh Hydropower’s 125MW hydropower plant.
• Furthermore, in September 2021, Tenaga Nasional Bhd’s (TNB) subsidiary, TNB Power Generation Sdn Bhd (TNB Genco) is expected to develop the 300 MW hydroelectric power plant with an investment of RMB 5.0 billion at Mukim Ulu Nenggiri, Jajahan Gua Musang, in Kelantan, Malaysia.
• Owing to above points, large hydro power segment is expected to dominate the market, during the forecast period.

Vietnam is Expected to Dominate the Market

• Vietnam is one of the largest hydropower markets in Southeast Asia, and according to the Electricity Authority of Vietnam (EVN), as of 2022, Vietnam had 20.774 GW of hydropower, accounting for nearly 29.9% of the country’s total installed capacity. In the year 2021, the country has consumed 0.71 exajoules of hydroelectricity, which is significantly high compared to 0.55 exajoules consumed in 2015.
• Traditionally, hydropower has accounted for a significant share of the country’s gross electricity generation mix, accounting for nearly 30.77% of the country’s total electricity generation. Traditionally, the Vietnamese economy has relied heavily on hydroelectricity to satiate domestic demand. However, as domestic demand has increased rapidly, the share of coal-fired generation in electricity has grown, along with other renewables, which have also grown at a steady pace but occupy a relatively smaller share of the total electricity generation mix.
• In August 2021, Toyota Tsusho Corporation acquired 35% of the issued shares for the Northern Electricity Development & Investment Joint Stock Company No. 2 ("NEDI2"), a company that operates the Ngoi Phat Hydropower Plant (84 MW). Similarly, In September 2021, Chubu Electric Power Co., Inc. acquired 20% of BPC, a subsidiary of the Bitexco Group, which, as of February 2021, owns and operates 21 hydropower plants and one solar power plant in Vietnam, with a total gross generation capacity of about 1,038 MW.
• Moreover, In April 2022, Flovel Energy announced the signing of the Contract for Nam Tang 3 HPP (2 x 8.75 MW) in Vietnam with Horizontal Francis units. The Project is being developed by Truong Thanh Investment Construction Company Limited. Nam Tang 3 Hydro Project is located in Yen Bai Province, Vietnam and this is the company’s eighth project in Yen Bai province.
• Owing to above points, Vietnam is expected to dominate the market, during the forecast period.

Competitive Landscape

The Southeast Asia hydropower market is moderately fragmented in nature. Some of the key players in this market (in no particular order) include Vietnam Electricity Construction JSC, Electricity Generating Authority of Thailand, PT Perusahaan Listrik Negara, Tenaga Nasional Berhad, Andrtiz AG.

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• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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