Distributed Energy System in Southeast Asia

The study of distributed energy systems (DES) in ASEAN highlights the potential role DES could play in enhancing electricity access and provide energy solutions as a modern energy system in response to increasing energy demand. This study assesses the overall status and policies of DES in selected ASEAN countries through a literature survey and information exchanges from meetings and conferences within the region. The study also attempted to estimate the DES-related renewable energy capacity and investment needed for the period 2013–2040. It found that DES is modern small power generation with the flexibility to provide electricity to end-users more effectively due to its advantages of lower investment cost and ease of handling compared with large national power plants. The study recommends ASEAN should carefully design friendly policies to support DES both using a top-down policy approach through use of renewable energy targets know as Renewable Portfolio Standard (RPS) and other policies such as fiscal incentives (e.g. exemptions from VAT, fuel tax, income tax, import and export duties, and local taxes, and accelerated depreciation through premium tariff rates such as fit-in-tariffs). In addition to the above policies, DES could be deployed more effectively if financial institutions were to provide support through risk-reduction mechanisms and by improving the profitability aspects of DES-related renewable investment. Finally, the study suggests that DES-related investment opportunities are large, and that DES will provide jobs and many business opportunities. DES is a modern generation system and its deployment will help to address the electricity supply shortage in ASEAN countries.