H2 2014 APAC LCOE UPDATE -...

H2 2014 APAC LCOE UPDATE

A race between renewable

penetration and fuel prices

Maggie Kuang

12 August 2014

1

A NOTE ON BNEF’S EXPANDING LCOE UNIVERSE

BNEF introduces a new, expanded and more regional approach to providing clients with levelised cost

of electricity (LCOE), project economics and cost data. What was once a global outlook will become a

semiannual series of six LCOE notes, available through the Energy Economics Dashboard

Global

AMER

APAC

EMEA

Wind

PV

● Global time series data on our Central LCOE cases, broken down by technology for 19

renewable energy technologies, plus three fossil technologies and nuclear

● Underlying data provided for global high, central and low scenarios

● Country-specific analysis of LCOEs of key fossil & renewable technologies across the US,

Canada, Mexico, Brazil, Uruguay, Chile, Peru and the Dominican Republic

● In-depth views of onshore wind and PV for key US states and Canadian provinces

● Country-specific analysis of LCOEs of key fossil & renewable technologies across China,

Japan, India, Malaysia, Indonesia, Thailand, Vietnam and the Philippines

● Country-level comparisons of LCOEs to local renewable energy tariffs

● Country-specific analysis of LCOEs for key technologies across the UK, France,

Germany, Belgium, Bulgaria, Greece, Italy, Turkey Estonia, Sweden and Poland

● In-depth views of German and UK markets

● Onshore wind analysis for over 30 countries with look at key technology cost drivers plus

a view of the European offshore wind market

● Regional-level summaries of key LCOE trends

● PV cost analysis for nearly 30 key markets with look at key technology cost drivers

● Regional-level summaries of key LCOE trends

Note Overview Who gets it?All subscribers

Subscribers to our AMER, Latin

America, BNEF All and All

Renewables services

Subscribers to our APAC, Australia,

BNEF All and All Renewables

services

Subscribers to our EMEA, BNEF All

and All Renewables services

Subscribers to our Wind, BNEF All


Subscribers to our Solar, BNEF All


https://www.bnef.com/economics

2

LEVELISED COST OF ELECTRICITY: METHODOLOGY NOTES (1 OF 2)

Definition

The Bloomberg New Energy Finance definition of levelised cost of electricity (LCOE) is the long-term offtake price required to

achieve a required equity hurdle rate for the project. This report tracks the LCOEs of 24 technologies, all at utility-scale. The LCOE

model is based on a pro-forma project finance schedule which runs through the full accounting of the project, based on a set of

project inputs. This allows us to capture the impact on costs of the timing of cash flows, development and construction costs,

multiple stages of financing, interest and tax implications of long-term debt instruments and depreciation, among other drivers. The

outputs of the model include sponsor equity cash flows, allowing calculation of the internal rate of return.

LCOE ranges driven by regional variations

Where possible the LCOEs are given as a range, composed of a number of specific scenarios, with inputs corresponding to

projects typical of those markets and technologies. Our global central scenario is made up of a blend of inputs from competitive

projects in mature markets. For example, in the case of a global PV range, the low scenario corresponds to a typical Chinese

project (including capex, capacity factors, and costs of debt typical in China); the high scenario corresponds to a Japanese project

(capex, capacity factor, cost of debt typical in Japan); and the central scenario reflects the LCOE of a project with German capex, a

capacity factor that is roughly at the global average, and a Western European average cost of debt. The central scenario thus does

not reflect a project characteristic of any particular market, but rather incorporates a blend of inputs from a range of competitive and

active markets. Because we have used this methodology consistently since 2009, the central scenario can be used to show how

these costs of these technologies have evolved over time.

Empirical data sourcing

For the most competitive PV and onshore wind markets, we use proprietary price indexes to build bottom-up capex assumptions,

paired with region-specific data for financing, macroeconomics, and resource quality. For example, for UK onshore wind, we derive

the LCOE using the BNEF Wind Turbine Price Index for the UK, along with operations and maintenance (O&M) figures from our

Wind O&M Index. The full capex also accounts for regional permitting and land acquisition costs. For PV and onshore wind

projects in less competitive markets, and for all other technologies, we use a combination of reported project-level costs (as

captured in our Industry Intelligence database), local input from our regional analysts, and data from publicly available primary

research.

3

LEVELISED COST OF ELECTRICITY: METHODOLOGY NOTES (2 OF 2)

Exclusion of subsidies

Except where specified otherwise the LCOEs shown in this report represent the gross cost of building, operating and financing

electricity generation technologies. As such the analysis excludes all subsidies and incentives (eg accelerated depreciation,

grants, production tax credits) but includes conventional taxes such as corporation tax. This approach enables a direct comparison

of the cost of generating electricity from different sources. These LCOEs are therefore from the price at which a developer may

wish to sell the electricity, as the sale price would be net of any subsidies.

Lumpy nature of certain technologies

While cost evolutions can be tracked consistently for widely deployed technologies such as PV and onshore wind – creating a

coherent time series – this may not be the case for other less mature technologies such as solar thermal and marine. Heavy

dependency on support mechanisms and highly localised costs means that central scenarios reflecting current costs for these

projects may move erratically as the geographic centres of deployment shift over time.

Macroeconomics and universal assumptions

For each individual country scenario, we apply the market’s standard corporate tax rate and an inflation rate equal to the average

of the IMF’s forecasted CPI rate for that country, or the previous five years of actual inflation if a forecast is unavailable. For our

central scenario, we have necessarily made certain simplifying assumptions: a single corporate tax rate of 35% and an annual

inflation of 2%. We also assume that all projects are depreciated using a straight line approach. LCOEs are calculated assuming a

development timeline that commences today. Today’s LCOE is then inflated each year to reflect that project revenues are typically

inflation-linked. This analysis is done in nominal dollars.

The use of debt

A key driver of the LCOEs for all renewable energy technologies is the cost of finance, and specifically the cost of debt finance.

The cost and availability of debt is a function of project risk and market conditions. The technology-independent portion of debt

costs is the level of the underlying interest rate from which debt costs are calculated. The specific market in which a project is

being financed can also have an effect on debt spreads through lenders’ perception of market-specific sovereign, policy, regulatory

or economic conditions. The higher the perceived risk, the higher the cost of debt.

4

H2 2014 LCOE ($/MWH) – GLOBAL AND APACALL TECHNOLOGIES

Coal is the cheapest source of power in Asia. In many cases coal-fired electricity costs less than half or

even one third of solar electricity generated locally. This cost difference between fossil and renewable

electricity will however likely decrease over time: fossil LCOEs will be driven up as fuel prices rise and

environmental constraints are added, while the cost of renewable energy will decrease as increasing

renewable energy penetration causes system costs to fall. ● Coal-fired electricity is cheapest in India at $30/MWh because of its low domestic coal prices

● The region’s lowest cost PV is in Inner Mongolia, China, where high quality solar resources push LCOEs down to

$90/MWh. The regional average is still high though due to the high costs of PV in Japan

● Onshore wind is reaching cost parity with gas power in India and China at costs of $75-80/MWh

● The average costs of PV in Thailand ($185MWh) and Malaysia ($180/MWh) is only marginally higher than that of

wind power ($178/MWh)

● The Asia average LCOEs of renewables are higher than the global averages, primarily due to higher country risks

and perceived high technology risks on renewables in these countries

0 50 100 150 200 250 300 350 400 450

Coal fired

Natural gas CCGT

Small hydro

Geothermal - flash plant

Wind - onshore

Biomass - incineration

PV - c-Si

Regional Average Global Mid

5

H2 2014 LCOE ($/MWH) – INDIA AND CHINA –SELECTED TECHNOLOGIES

Source: Bloomberg New Energy Finance

INDIA CHINA

● Coal-fired power remains the cheapest among other power sources in both countries. Indian coal-fired electricity

costs $34/MWh on average, while Chinese coal-fired electricity costs $51/MWh. No environmental costs are

assumed

● Wind energy is second to coal-fired power in India in terms of cost competitiveness: the average wind LCOE is

$74/MWh, marginally lower than gas power, and can be even lower in areas with high wind speeds

● India’s solar LCOE stands at $109/MWh on average, triple the coal-fired LCOE in the country

● China’s wind energy ($81/MWh) is approaching parity with gas power, but PV remains more expensive ($135/MWh).

However, the assumed capacity factor for PV is low at 14% so the LCOE can be much lower for better sites

0 50 100 150 200

Coal fired

Natural gas CCGT

Small hydro

Wind - onshore

PV - c-Si

China Mid

0 50 100 150 200

Coal fired

Natural gas CCGT

Wind - onshore


PV - c-Si

India Mid

6

H2 2014 LCOE ($/MWH) – JAPAN AND PHILIPPINES –SELECTED TECHNOLOGIES


JAPAN THE PHILIPPINES

● Japan and the Philippines have the highest power prices in Asia, with the average fossil-fuel LCOE above $100/MWh

and renewable LCOEs above $150/MWh

● Renewables are remarkably more expensive than fossil-fuel power in Japan. Solar LCOEs reach $292/MWh, triple

the coal-fired LCOEs in the country, driven by low solar resources and high capex costs (partly resulting from the

high subsidy). Onshore wind faces similar resource and capex challenges

● Japan’s wind ($178/MWh) and solar ($292/MWh) LCOEs are 20% and 40% higher than the Philippines, respectively

● CCGT LCOEs in Japan are 20% higher than the Philippines, primarily due to the high cost of imported LNG in Japan,

while the Philippines coal LCOE is slightly higher than Japan’s because of higher financing costs

0 50 100 150 200 250 300 350 400 450

Coal fired

Natural gas CCGT

Wind - onshore

PV - c-Si

Japan Mid

0 50 100 150 200 250 300 350 400 450

Natural gas CCGT

Coal fired



Small hydro

Wind - onshore

PV - c-Si

Philippines Mid

7

H2 2014 LCOE ($/MWH) – THAILAND AND MALAYSIA –SELECTED TECHNOLOGIES


THAILAND MALAYSIA

● Thailand and Malaysia are not only geographically close but share a similar pattern of LCOEs whose key feature is

that solar energy costs ($185/MWh) almost the same as wind energy ($178/MWh)

● Both countries have relatively low wind resource availability, with average projects achieving capacity factors of only

20% versus the 32% assumed in our developed market central scenario

● Malaysia, despite having a more developed economy than Thailand, has cheaper power because of its energy

reserves and lower level of policy uncertainty: coal ($67/MWh) and CCGT ($72/MWh) LCOEs in Malaysia are 30%

lower than in Thailand as average fuel prices are lower

0 50 100 150 200 250 300 350 400

Coal fired

Natural gas CCGT

Small hydro


Wind - onshore

PV - c-Si

Malaysia Mid

0 50 100 150 200 250 300 350 400

Coal fired

Natural gas CCGT

Small hydro


Wind - onshore

PV - c-Si

Thailand Mid

8

H2 2014 LCOE ($/MWH) – INDONESIA AND VIETNAM –SELECTED TECHNOLOGIES


INDONESIA VIETNAM

● Indonesia and Vietnam exhibit similar LCOE characteristics: both countries have a large fossil to renewables cost

differential. In both countries, coal power (~$50/MWh) costs only a quarter of solar power (~$200/MWh), driven by

cheap coal (and gas) prices and relatively expensive solar (and wind )

● Vietnam’s coal, gas and small hydro power are slightly cheaper than Indonesia as the country enjoys lower fuel

prices and better hydro resources

● Wind energy enjoys a considerable cost advantage over solar in both countries (Vietnam: $168/MWh, Indonesia:

$159/MWh) versus PV (Vietnam: $206/MWh, Indonesia: $204/MWh), reflecting the availability of high wind resources

sites along both countries’ coasts

0 50 100 150 200 250 300 350 400

Coal fired

Natural gas CCGT

Small hydro



Wind - onshore

PV - c-Si

Indonesia Mid

0 50 100 150 200 250 300 350 400

Coal fired

Natural gas CCGT

Small hydro


Wind - onshore

PV - c-Si

Vietnam Mid

9

H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGESUTILITY-SCALE PV (NO TRACKING)

● India produces on average the cheapest solar LCOEs in Asia, mainly attributable to its low balance of plants costs

resulting from low labour expenses and a highly competitive market

● China follows closely with its cost advantage in equipment cost as the vast majority of PV modules are produced in

China. Domestic manufacturers can offer substantially lower equipment price packages at prices of around $0.6/W

● Soft costs at the development stage driven by political turmoil push Thailand’s solar LCOE up past Malaysia’s, but

fundamentally they should be at the same level (or even lower for Thailand given the more mature market)

● Japan has the highest solar LCOE in Asia, double India’s level, because of the utilisation of expensive Japanese

structural and electrical components, plus high labor and soft costs (all of which are not being reduced to comparable

global levels due to the high feed-in tariff)

0 50 100 150 200 250 300 350 400 450

India

China

Malaysia

Thailand

Indonesia

Vietnam

Philippines

Japan

LCOE Range Mid LCOE

10

Source: Bloomberg New Energy Finance.

H2 2014 LCOE – APACUTILITY-SCALE PV (NO TRACKING)COUNTRY ASSUMPTIONS AND AVERAGE LCOE

CAPEX CAPACITY FACTOR FINANCING

● India - low thanks to cheap local

equipment and low land and labour

costs

● Japan - high due to expensive

Japanese components and high land

and labour costs

● SEA - same equipment and BOP

costs across the region; insignificant

labour cost differences; Thailand,

Indonesia, and Vietnam have higher

development costs due to policy

uncertainties

● India – highest capacity factor

thanks to highest solar irradiation

● Japan – lowest capacity factor due

to lowest solar irradiation

● SEA – in the middle of Japan and

India. Thailand is assumed to be the

highest across SEA as the country

has good solar irradiation and grid

connections, and also enjoys a

dispatch priority policy for

renewables

● Project finance is widely available in

Asia, with a typical structure of 60-

80% of debt and remainder of equity

● Japan - highest debt ratio thanks to

cheap yen-denominated debt

● Malaysia & Indonesia - lowest debt

ratio as project debt is not easily

available. Malaysia’s project size is

too small to attract project debt, while

Indonesia has high repayment risk

● Cost of equity: higher in SEA and

India given high country risk

PVCsiNoTrackFix O&M

($/MW/yr)

Debt ratio

(%)

Cost of debt

(all-in)

Cost of

equity (%)

Country Low Ave High Low Ave High Ave Ave Ave Ave

India 1.2 1.3 1.4 16% 19% 21% 18,333 70% 11% 16% 109

China 1.5 1.5 1.6 12% 14% 20% 15,295 70% 7% 10% 135

Malaysia 1.5 1.7 2.4 14% 16% 18% 40,000 65% 7% 12% 180

Thailand 1.7 1.9 2.5 14% 17% 19% 40,000 75% 6% 12% 185

Indonesia 1.7 1.9 2.5 14% 16% 18% 40,000 65% 9% 15% 204

Vietnam 1.7 1.9 2.5 14% 16% 18% 40,000 70% 10% 15% 206

Philippines 1.5 1.7 2.4 14% 16% 18% 40,000 70% 6% 16% 209

Japan 2.3 2.9 4.0 12% 13% 14% 50,000 79% 2% 6% 292

Capex ($m/MW) Capacity factor (%) Mid LCOE

($/MWh)

11

H2 2014 LCOE – APACUTILITY-SCALE PV (NO TRACKING), AVERAGE LCOE ATTRIBUTION BY COUNTRY

CAPEX

● Capex constitutes a relatively larger part of the total solar

cashflows in Japan – where debt and equity costs have a

smaller impact of cashflows – than in China and Thailand

● India’s high equity return requirements and expensive debt

override relatively cheap capex requirements to be main

cashflow drivers

FINANCING

● The returns required by equity investors in solar projects in

Vietnam, Indonesia, and India have a large impact on

project cashflows

● Japan’s high capex costs and cheap debt combine to lower

the relative impact of financing costs on project cashflows


LIFETIME CASH OUTFLOWS FROM

PROJECT (UNDISCOUNTED)

CAPACITY

FACTORSLCOE ($/MWh)

0% 20% 40% 60% 80% 100%

Japan

Philippines

Vietnam

Indonesia

Thailand

Malaysia

China

India

Capex F O&M Tax Interest Equity

0% 10% 20% 30%

Capacity factor Global central

0 100 200 300 400

12

H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGESONSHORE WIND

● India’s wind energy takes the top spot in terms of cost competitiveness with the lowest LCOE, to even below

$50/MWh. Average projects produce an LCOE of $74/MWh, thanks in large part to India’s low wind capex

● China’s average wind LCOE is 10% higher than India’s, standing at around $81/MWh

● The Philippines falls in third place in APAC for wind energy, although its average wind LCOE is high by global

standards at around $150/MWh, double India’s level

● Japan has the highest average wind LCOE in the APAC region, currently at $178/MWh, as wind capex in Japan is

three times as much as in India

0 50 100 150 200 250 300

India

China

Philippines

Indonesia

Vietnam

Malaysia

Thailand

Japan

LCOE Range Mid LCOE

13

H2 2014 LCOE – APACONSHORE WINDCOUNTRY ASSUMPTIONS AND AVERAGE LCOE

CAPEX CAPACITY FACTOR FINANCING

● India - lowest capex thanks to cheap

local equipment and low land and

labour costs

● Japan - highest capex due to

expensive Japanese components and

high land and development costs

● SEA - same equipment and BOP

costs across the region; insignificant

labour cost differential; lower

development cost in the Philippines as

there’s more certainty in policy

implementation

● The Philippines – highest capacity

factor thanks to high wind speed in

the north and grid connection and

dispatch priority

● China – high wind speeds but

curtailment limits capacity factors

● Malaysia and Thailand – lowest

capacity factor due to lower wind

speeds

● Financing cost does not vary by

technology. Average cost of debt is

similar to that for solar projects,

which hovers from a low of 2% in

Japan to a high of 11% in India

● Cost of equity is seen higher in SEA

and India given high country risks

● Slightly higher gearing ratio than

solar projects as wind projects tend

to be of bigger size and more

attractive to project debt lenders

WindOnshoreFix O&M

($/MW/yr)

Debt ratio

(%)

Cost of debt

(all-in)

Cost of

equity (%)

Country Low Ave High Low Ave High Ave Ave Ave Ave

India 1.0 1.0 1.1 15% 22% 33% 17,293 80% 11% 14% 74

China 1.3 1.3 1.6 21% 24% 29% 25,000 75% 7% 10% 81

Philippines 1.8 2.0 2.6 20% 25% 30% 25,000 70% 6% 16% 152

Indonesia 2.0 2.2 2.8 20% 23% 25% 25,000 70% 9% 15% 159

Vietnam 2.0 2.2 2.8 20% 23% 25% 35,000 70% 10% 15% 168

Malaysia 2.0 2.2 2.8 18% 20% 25% 25,000 70% 7% 12% 178

Thailand 2.0 2.2 2.8 18% 20% 25% 25,000 70% 6% 12% 178

Japan 2.6 2.9 4.4 20% 22% 25% 58,651 75% 2% 6% 178

Capex ($m/MW) Capacity factor (%) Mid LCOE

($/MWh)

14

H2 2014 LCOE – APACONSHORE WINDAVERAGE LCOE ATTRIBUTION BY COUNTRY

CAPEX

● Just as in solar - capex constitutes a relatively larger part of

the total wind cashflows in Japan versus China, Thailand

and the Philippines

FINANCING

● The returns required by equity investors in wind projects in

Thailand, Indonesia, and Malaysia are significant cashflow

drivers for onshore wind

● India’s interest costs play a key role in project costs,

significantly more than in Japan


LIFETIME CASH OUTFLOWS FROM

PROJECT (UNDISCOUNTED)

CAPACITY

FACTORSLCOE ($/MWh)

0% 20% 40% 60% 80% 100%

Japan

Thailand

Malaysia

Vietnam

Indonesia

Philippines

China

India

Capex Fixed O&M Variable O&M Tax Interest Equity

0% 20% 40% 60%

Capacity factor Global central

0 50 100 150 200

15

H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGESCOAL

● India produces the cheapest coal-fired electricity which only costs around $34/MWh, one third of Japan’s

● Vietnam, Indonesia, and China are at similar levels with an average cost of ~$50/MWh. China’s extremely low coal

capex offsets the impact from the high coal price on its coal LCOE

● Malaysia is in the middle of the Asia range, producing at $67/MWh on average

● Japan’s coal-fired LCOE stands at $93/MWh due to its high import coal price and expensive capex

● Coal-fired electricity in Thailand costs around $99/MWh, substantially higher than in Malaysia as capacity factors are

lower

● The Philippines’ coal-fired LCOE is the highest as it relies on Japanese equipment and Indonesian coal

0 20 40 60 80 100 120 140

India

Vietnam

Indonesia

China

Malaysia

Japan

Thailand

Philippines

LCOE Range Mid LCOE

16

APAC COAL PRICE ASSUMPTIONS ($/TON)

● Coal price forecasts are built with adding moderate inflation rates on current domestic coal prices

● India and Vietnam have the lowest coal prices as both have abundant domestic coal production

● Malaysia imports 90% of its coal consumption, of which 70% is from Indonesia. The country’s current coal price is

above $80/ton. Thailand and the Philippines coal prices are assumed to be the same as Malaysia’s. Although

Thailand’s current coal price is around $20/ton, its future coal price will align with Malaysia’s as the country will import

coal from Indonesia as domestic coal production dries up. The Philippines’ coal consumption is largely met through

import (90%) as well, mainly from Indonesia

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China

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India

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17

H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGESNATURAL GAS CCGT

● Vietnam offers the cheapest gas power in Asia with cost below $60/MWh, owing to cheap gas prices and high

capacity factors

● Indonesia ranks the second cheapest as its cheap gas prices offset low capacity factors

● Malaysia, a major gas and LNG exporter in the international market, is unable to produce gas power cheaply due to

low capacity factors. The country’s low domestic gas prices have made its gas producers skip the local market and

sell gas in the international market for higher profits

● The average gas power LCOEs in China and India are close, at around $75/MWh

● Japan is most expensive with an average LCOE reaching $120/MWh. Thailand and the Philippines are just below

$100/MWh. The three countries have relatively high gas prices

0 20 40 60 80 100 120 140

Vietnam

Indonesia

Malaysia

China

India

Philippines

Thailand

Japan

LCOE Range Mid LCOE

18

APAC NATURAL GAS PRICE ASSUMPTIONS ($/MMBTU)

● Japan’s gas price is dependent on its LNG import price. We expect Japan's average LNG import price to

continuously decline until 2023 because of first, the arrival of cheaper US shale gas from 2017; second, a downward

trending oil price (World Bank's forecast); third, a falling spot LNG price on the back of increasing global supplies

● Thai gas demand will be largely met by existing pipeline gas contracts with Malaysia and Myanmar until 2020.

Therefore, the gas price for Thailand will likely remain flat before 2020 but increase to reflect future Asia LNG prices

● For the Philippines, we use Thailand’s price estimate as an indicator because its domestic gas price mechanism is

similar to Thailand’s and its future LNG imports are also likely to rise

● India's gas price is a combination of LNG import prices and domestic gas prices. The domestic gas price is set by the

government using a formula which calculates the average of an export parity price and an import parity price

● China's gas price is set using a formula which benchmarks gas price to fuel oil and LPG prices. Therefore, using this

mechanism, our resultant gas price declines over the years with reducing oil prices as per the World Bank forecast

● Indonesia will be self-sufficient until 2018 based on our forecast and will therefore enjoy stable domestic gas prices.

The international LNG price effect is factored in after 2020, similar to Malaysia and Vietnam

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China

Indonesia, Malaysia,

Vietnam

India

Thailand, Philippines

Japan

19

Note: Only feed-in-tariffs for utility-scale (>1MW) projects present. Vietnam has no solar incentives; Indonesia shows the solar auction ceiling price; Thailand shows the all-

in power price under a feed-in premium or ‘adder’ programme. India shows the national benchmark FiT. Source: Bloomberg New Energy Finance

APAC SOLAR LCOE VS SOLAR TARIFF ($/MWH)

● Utility-scale solar projects that signed PPAs with Thai utilities under the old ‘adder’ regime still enjoy the highest

premium in Asia. However, the total projects only amounted to 325MW as of H1 2014. No further extension on

project commissioning deadlines will be given, so Thailand’s attractive situation will disappear next year.

● Indonesia has a solar reverse auction program which sets the ceiling price at $250/MWh. Therefore, the high

premium is only receivable if everyone else bids at a price higher than $250/MWh – which is very unlikely.

● Malaysia ranks third with a FiT of $216/MWh for solar projects between 1-10MW.

● India, Japan, China and the Philippines’ solar incentives are close to their respective solar LCOEs, but are enough to

incentivise development. This is especially the case in Japan where costs seem to be inflated due to the high tariff.

● Vietnam does not have solar incentives at present and the average power price is too low to make projects viable.

0

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Low Range Mid Feed-in tariff or Average power price

20

Note: Indonesia and Malaysia do not have wind incentives. The power price shown in the chart for them is their

respective power purchase price. India has a generation-based incentive for wind power.

APAC WIND LCOE VS WIND TARIFF ($/MWH)

● The Philippines offers the highest wind power premium through a FiT of $197/MWh (but it does have a capacity limit in place)

● Japan sits at the second place with a decent FiT of $210/MWh

● Thailand’s wind ‘adder’ has an all-in power price of $192/MWh, which is slightly higher than the average wind LCOE

● India and China’s wind power tariffs - $80/MWh and $90/MWh respectively – are rather modest compared to their respective

average wind LCOEs

● Vietnam’s wind FiT is far below the average wind LCOE and is currently being revised up to promote project development

● Malaysia and Indonesia do not have wind incentives at present. The average power prices are too low

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Low Range Mid Feed-in tariff or Average power price

21

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Applied Research

Events and Workshops

Maggie Kuang

[email protected]

Joseph Salvatore

[email protected]

H2 2014 APAC LCOE UPDATE -...

Documents

Transcript of H2 2014 APAC LCOE UPDATE -...