Feed‐in tariffs for financing renewable energy in Southeast Asia

Abstract

Renewable energies are increasingly playing an important role in the energy mix in Southeast Asia, but many challenges remain before they can compete with fossil fuels. The article examines the current development in the renewable energy in Southeast Asia. The article also analyses feed‐in tariff policy to further support the development of the renewable energy sector in Indonesia, Malaysia, Philippines, Thailand, and Viet Nam. More investments in renewable energy could be attracted given the same level of feed‐in tariff rates, contract length, and capacity cap by improving feed‐in tariff policy predictability. Southeast Asian countries could consider modification of their feed‐in tariffs suggested by the literature, such as for renewable energy generation accompanied with energy storage, tariff degression, caped capacity per region or grid, capacity‐augmentation‐tariff that are differentiated across different types and locations of intermittent power. Few of these features of feed‐in tariff policy are already implemented in some Southeast Asian countries.