Southeast Asia’s wind boom threatened by weak policy, grid gaps

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Vietnam’s feed-in tariff (FIT) scheme from 2018 triggered a renewable boom that overwhelmed planners, Grant Hauber, strategic energy finance adviser for Asia at IEEFA, told Asian Power.

“What Vietnam had was a very static approach as they accepted every project that came in,” he said via Zoom. He added that the lack of a project quota or cap flooded the system with applications, causing grid congestion and policy uncertainty.

Rohit Patel, Rystad vice president for renewables and power, said the experience shows emerging markets should adopt a dynamic policy that adjusts to investor response. “When there’s a massive market response, the cap on the price must be lowered over time.”

“The auction-based system creates the best opportunity for real price discovery without excess costs,” Hauber said, citing the Philippines’ auctions that helped drive down prices.

Source: National Renewable Energy Lab