As global demand for renewable energy grows, some emerging markets are positioning themselves as leaders in solar exports. Most notably, Indonesia appears to be leading the way. In recent months, the country has proposed five large-scale solar export projects.
In a project announced in mid-April, Singapore-based renewable energy provider Quantum Power Asia and Berlin-based Ib Vogt agreed to export solar energy to Singapore for $5 billion.
The proposal involves the construction of a 3.5 GW solar park and a 12 GWh battery storage facility on 4,000 hectares of land in Indonesia’s Riau Islands. The generated electricity will then be exported to Singapore via a submarine cable.
Another deal was announced in January, when Masdar, an Emirati company focused on renewable energy at the time, signed a memorandum of understanding with Singapore-based Tuas Power, French energy group EDF and state-owned utility Indonesia Power to explore exporting from India The potential of solar energy. Indonesia to Singapore.
The consortium will study the possibility of developing 1.2 GW of solar capacity as well as storage facilities and possibly connecting the project to Singapore’s grid.
While national authorities have yet to approve the projects, they have highlighted the need for renewable energy imports from developed countries such as Singapore, and the potential of emerging markets such as Indonesia to develop their solar export industries.
Currently, 95% of Singapore’s electricity comes from imported natural gas, although the government announced last year that it aims to import up to 4 GW of low-carbon electricity by 2035, equivalent to 30% of its needs, thus providing export opportunities for countries like Indonesia.
Exporting renewable energy will not only create a whole new export industry, but will also lead to the construction of mega projects that will create local jobs and develop local supporting infrastructure such as roads and railways, as well as technological know-how.
Emerging Market Leader
Given the global demand for low-carbon energy, several countries outside Indonesia have also explored the possibility of exporting renewable energy.
As part of Singapore’s energy import approach, Singaporean company Keppel Electric and Lao state-owned energy company Électricité du Laos signed an agreement in September 2021 to import 100 MW of renewable hydropower from Laos to Singapore through Thailand and Malaysia as part of it. a pilot project.
At the same time, Australia is emerging as a potential competitor to ASEAN countries in renewable energy exports.
Australian firm Sun Cable has outlined plans for a mega-project worth A$30 billion ($21.3 billion) to transport solar energy from Darwin in the north of the country to Singapore via 4,200km of submarine cables.
Related: U.S. oil rigs drop for first time in 9 weeks
Australia has natural advantages, including a large amount of unused land for 12,000 hectares of solar power plants, and favorable weather for solar power generation. However, Singaporean energy industry officials are concerned about the cost of the project, which could be favored by Southeast Asian countries such as Indonesia and Laos.
Elsewhere, Morocco is another country with huge potential to export renewable energy.
Since 2009, the country has significantly increased its renewable energy capacity, increasing solar power generation by 16 times and wind power generation by 6 times by 2020.
While the country has fallen short of its ambitious goal of sourcing 42% of its total installed capacity from renewables to 37% by 2020, progress remains encouraging. In fact, the government has pledged to further increase the share of renewables in the electricity mix to 52% by 2030, including 20% solar, 20% wind and 12% hydro.
This significant increase has also boosted the country’s ability to export renewable energy to Europe.
Morocco already has two cables connected to Spain and plans to build a third. Meanwhile, in April British company Xlinks announced plans to build a 10.5 GW combined solar and wind power plant, complete with on-site battery storage, and a 3,800-kilometer submarine cable capable of sending electricity from the sun and wind to Spain.
energy transition issues
While there are undoubtedly substantial economic and infrastructural benefits to emerging markets from exporting renewable energy, there are also concerns that the export focus could negatively impact their domestic energy transition.
For example, with only around 210 MW of installed solar capacity, Indonesia has one of the smallest solar footprints in the world. Although planning for solar projects with a capacity of up to 17,000 MW has already begun, only 3,300 MW of this is expected to be used in the local market, with most being exported abroad.
This would make Indonesia highly dependent on coal-fired energy, which could not only adversely affect the health of the local population, but also hurt the country’s efforts to reduce emissions and meet its Paris Agreement commitments.
There are similar concerns in Morocco, where a report by the Heinrich Böll Foundation, an NGO affiliated with Germany’s Green Party, has raised concerns that if Morocco’s solar and wind power were to be exported, domestic electricity would come mostly from coal-burning plants.
Moreover, the export-focused approach has raised concerns that wealthy developed countries are meeting their climate goals at the expense of emerging markets.
In fact, Malaysia recently banned the export of renewable energy, citing the need to develop its own renewable energy industry and address its own climate goals first.
Given the renewable energy potential of countries such as Indonesia and Morocco, and the economic and climate benefits associated with exporting green energy, policymakers in emerging markets will seek to strike the right balance between exploiting market opportunities and prioritizing their own energy transitions.
go through Oxford Business Group
More popular reads from Oilprice.com: