12 August 2014
H2 2014 APAC LCOE
UPDATE
A race between renewable
penetration and fuel prices
Maggie Kuang
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
Note
Overview
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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
All subscribers
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
Subscribers to our AMER, Latin
America, BNEF All and All
Renewables services
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
Subscribers to our APAC, Australia,
BNEF All and All Renewables
services
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
Subscribers to our EMEA, BNEF All
and All Renewables services
Subscribers to our Wind, BNEF All
and All Renewables services
●
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
Subscribers to our Solar, BNEF All
and All Renewables services
Global
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AMER
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●
APAC
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EMEA
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●
Wind
PV
Who gets it?
1
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.
2
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.
3
H2 2014 LCOE ($/MWH) – GLOBAL AND APAC
ALL TECHNOLOGIES
PV - c-Si
Biomass - incineration
Wind - onshore
Geothermal - flash plant
Small hydro
Natural gas CCGT
Coal fired
0
50
100
Regional Average
150
200
250
300
350
400
450
Global Mid
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 ($178/MWh)
The Asia average LCOEs of renewables are higher than the global averages, primarily due to higher country risks
and perceived high technology risks on renewables in these countries
4
H2 2014 LCOE ($/MWH) – INDIA AND CHINA –
SELECTED TECHNOLOGIES
INDIA
CHINA
PV - c-Si
PV - c-Si
Biomass - incineration
Wind - onshore
Wind - onshore
Small hydro
Natural gas CCGT
Natural gas CCGT
Coal fired
Coal fired
0
50
India Mid
●
●
●
●
100
150
200
0
50
100
150
200
China Mid
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 ($135/MWh).
However, the assumed capacity factor for PV is low at 14% so the LCOE can be much lower for better sites
Source: Bloomberg New Energy Finance
5
H2 2014 LCOE ($/MWH) – JAPAN AND PHILIPPINES –
SELECTED TECHNOLOGIES
JAPAN
THE PHILIPPINES
PV - c-Si
PV - c-Si
Wind - onshore
Small hydro
Wind - onshore
Biomass - incineration
Natural gas CCGT
Geothermal - flash plant
Coal fired
Coal fired
Natural gas CCGT
0
50 100 150 200 250 300 350 400 450
Japan Mid
●
●
●
●
0
50 100 150 200 250 300 350 400 450
Philippines Mid
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 ($292/MWh) LCOEs are 20% and 40% higher than the Philippines, respectively
CCGT LCOEs in Japan are 20% higher than the Philippines, primarily due to the high cost of imported LNG in Japan,
while the Philippines coal LCOE is slightly higher than Japan’s because of higher financing costs
Source: Bloomberg New Energy Finance
6
H2 2014 LCOE ($/MWH) – THAILAND AND MALAYSIA –
SELECTED TECHNOLOGIES
THAILAND
MALAYSIA
PV - c-Si
PV - c-Si
Wind - onshore
Wind - onshore
Biomass - incineration
Biomass - incineration
Small hydro
Small hydro
Natural gas CCGT
Natural gas CCGT
Coal fired
Coal fired
0
50 100 150 200 250 300 350 400
Thailand Mid
●
●
●
0
50 100 150 200 250 300 350 400
Malaysia Mid
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 ($72/MWh) LCOEs in Malaysia are 30%
lower than in Thailand as average fuel prices are lower
Source: Bloomberg New Energy Finance
7
H2 2014 LCOE ($/MWH) – INDONESIA AND VIETNAM –
SELECTED TECHNOLOGIES
INDONESIA
VIETNAM
PV - c-Si
PV - c-Si
Wind - onshore
Wind - onshore
Geothermal - flash plant
Biomass - incineration
Biomass - incineration
Small hydro
Small hydro
Natural gas CCGT
Natural gas CCGT
Coal fired
Coal fired
0
50 100 150 200 250 300 350 400
Indonesia Mid
●
●
●
0
50 100 150 200 250 300 350 400
Vietnam Mid
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: $204/MWh), reflecting the availability of high wind resources
sites along both countries’ coasts
Source: Bloomberg New Energy Finance
8
H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGES
UTILITY-SCALE PV (NO TRACKING)
Japan
Philippines
Vietnam
Indonesia
Thailand
Malaysia
China
India
0
50
100
150
200
LCOE Range
●
●
●
●
250
300
350
400
450
Mid LCOE
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 $0.6/W
Soft costs at the development stage driven by political turmoil push Thailand’s solar LCOE up past Malaysia’s, but
fundamentally they should be at the same level (or even lower for Thailand given the more mature market)
Japan has the highest solar LCOE in Asia, double India’s level, because of the utilisation of expensive Japanese
structural and electrical components, plus high labor and soft costs (all of which are not being reduced to comparable
global levels due to the high feed-in tariff)
9
H2 2014 LCOE – APAC
UTILITY-SCALE PV (NO TRACKING)
COUNTRY ASSUMPTIONS AND AVERAGE LCOE
CAPEX
●
●
●
CAPACITY FACTOR
India - low thanks to cheap local
equipment and low land and labour
costs
Japan - high due to expensive
Japanese components and high land
and labour costs
SEA - same equipment and BOP
costs across the region; insignificant
labour cost differences; Thailand,
Indonesia, and Vietnam have higher
development costs due to policy
uncertainties
PVCsiNoTrack
Country
India
China
Malaysia
Thailand
Indonesia
Vietnam
Philippines
Japan
●
●
●
Capex ($m/MW)
Low
1.2
1.5
1.5
1.7
1.7
1.7
1.5
2.3
Ave
1.3
1.5
1.7
1.9
1.9
1.9
1.7
2.9
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
Capacity factor (%)
High
1.4
1.6
2.4
2.5
2.5
2.5
2.4
4.0
Low
16%
12%
14%
14%
14%
14%
14%
12%
Ave
19%
14%
16%
17%
16%
16%
16%
13%
High
21%
20%
18%
19%
18%
18%
18%
14%
FINANCING
●
●
●
●
Project finance is widely available in
Asia, with a typical structure of 6080% 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
Fix O&M Debt ratio Cost of debt Cost of
Mid LCOE
($/MW/yr)
(%)
(all-in)
equity (%)
($/MWh)
Ave
Ave
Ave
Ave
18,333
70%
11%
16%
109
15,295
70%
7%
10%
135
40,000
65%
7%
12%
180
40,000
75%
6%
12%
185
40,000
65%
9%
15%
204
40,000
70%
10%
15%
206
40,000
70%
6%
16%
209
50,000
79%
2%
6%
292
Source: Bloomberg New Energy Finance.
10
H2 2014 LCOE – APAC
UTILITY-SCALE PV (NO TRACKING),
AVERAGE LCOE ATTRIBUTION BY COUNTRY
LIFETIME CASH OUTFLOWS FROM
PROJECT (UNDISCOUNTED)
CAPACITY
FACTORS
LCOE ($/MWh)
India
China
Malaysia
Thailand
Indonesia
Vietnam
Philippines
Japan
0%
20%
Capex
40%
F O&M
60%
Tax
80%
Interest
100%
Equity
0%
10%
Capacity factor
FINANCING
CAPEX
●
●
●
The returns required by equity investors in solar projects in
Vietnam, Indonesia, and India have a large impact on
project cashflows
Japan’s high capex costs and cheap debt combine to lower
the relative impact of financing costs on project cashflows
●
20%
30%
0
100
200
300
400
Global central
Capex constitutes a relatively larger part of the total solar
cashflows in Japan – where debt and equity costs have a
smaller impact of cashflows – than in China and Thailand
India’s high equity return requirements and expensive debt
override relatively cheap capex requirements to be main
cashflow drivers
Source: Bloomberg New Energy Finance
11
H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGES
ONSHORE WIND
Japan
Thailand
Malaysia
Vietnam
Indonesia
Philippines
China
India
0
●
●
●
●
50
100
LCOE Range
150
Mid LCOE
200
250
300
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 $178/MWh, as wind capex in Japan is
three times as much as in India
12
H2 2014 LCOE – APAC
ONSHORE WIND
COUNTRY ASSUMPTIONS AND AVERAGE LCOE
CAPEX
●
●
●
CAPACITY FACTOR
India - lowest capex thanks to cheap
local equipment and low land and
labour costs
Japan - highest capex due to
expensive Japanese components and
high land and development costs
SEA - same equipment and BOP
costs across the region; insignificant
labour cost differential; lower
development cost in the Philippines as
there’s more certainty in policy
implementation
WindOnshore
Country
India
China
Philippines
Indonesia
Vietnam
Malaysia
Thailand
Japan
●
●
●
Capex ($m/MW)
Low
1.0
1.3
1.8
2.0
2.0
2.0
2.0
2.6
Ave
1.0
1.3
2.0
2.2
2.2
2.2
2.2
2.9
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
Capacity factor (%)
High
1.1
1.6
2.6
2.8
2.8
2.8
2.8
4.4
Low
15%
21%
20%
20%
20%
18%
18%
20%
Ave
22%
24%
25%
23%
23%
20%
20%
22%
High
33%
29%
30%
25%
25%
25%
25%
25%
FINANCING
●
●
●
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
Fix O&M Debt ratio Cost of debt Cost of
Mid LCOE
($/MW/yr)
(%)
(all-in)
equity (%)
($/MWh)
Ave
Ave
Ave
Ave
17,293
80%
11%
14%
74
25,000
75%
7%
10%
81
25,000
70%
6%
16%
152
25,000
70%
9%
15%
159
35,000
70%
10%
15%
168
25,000
70%
7%
12%
178
25,000
70%
6%
12%
178
58,651
75%
2%
6%
178
13
H2 2014 LCOE – APAC
ONSHORE WIND
AVERAGE LCOE ATTRIBUTION BY COUNTRY
LIFETIME CASH OUTFLOWS FROM
PROJECT (UNDISCOUNTED)
CAPACITY
FACTORS
LCOE ($/MWh)
India
China
Philippines
Indonesia
Vietnam
Malaysia
Thailand
Japan
0%
Capex
20%
Fixed O&M
40%
60%
Variable O&M
Tax
80%
Interest
FINANCING
●
●
The returns required by equity investors in wind projects in
Thailand, Indonesia, and Malaysia are significant cashflow
drivers for onshore wind
India’s interest costs play a key role in project costs,
significantly more than in Japan
100% 0%
Equity
20%
Capacity factor
40%
60%
0
50
100
150
200
Global central
CAPEX
●
Just as in solar - capex constitutes a relatively larger part of
the total wind cashflows in Japan versus China, Thailand
and the Philippines
Source: Bloomberg New Energy Finance
14
H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGES
COAL
Philippines
Thailand
Japan
Malaysia
China
Indonesia
Vietnam
India
0
20
40
60
LCOE Range
●
●
●
●
●
●
80
100
120
140
Mid LCOE
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 $99/MWh, substantially higher than in Malaysia as capacity factors are
lower
The Philippines’ coal-fired LCOE is the highest as it relies on Japanese equipment and Indonesian coal
15
APAC COAL PRICE ASSUMPTIONS ($/TON)
140
China
120
Japan
100
80
60
India
40
Vietnam
20
●
●
●
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
0
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 $20/ton, its future coal price will align with Malaysia’s as the country will import
coal from Indonesia as domestic coal production dries up. The Philippines’ coal consumption is largely met through
import (90%) as well, mainly from Indonesia
16
H2 2014 LCOE ($/MWH) – APAC – COUNTRY RANGES
NATURAL GAS CCGT
Japan
Thailand
Philippines
India
China
Malaysia
Indonesia
Vietnam
0
20
40
60
LCOE Range
●
●
●
●
●
80
100
120
140
Mid LCOE
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
$100/MWh. The three countries have relatively high gas prices
17
APAC NATURAL GAS PRICE ASSUMPTIONS
($/MMBTU)
16
Japan
14
Thailand, Philippines
12
10
India
8
China
6
Indonesia,
Malaysia,
Vietnam
4
2
●
●
●
●
●
●
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
0
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
18
APAC SOLAR LCOE VS SOLAR TARIFF ($/MWH)
450
400
350
300
250
200
150
100
50
Low
●
●
●
●
●
Range
Mid
Thailand
Indonesia
Malaysia
India
Japan
China
Philippines
Vietnam
0
Feed-in tariff or Average power price
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 $216/MWh for solar projects between 1-10MW.
India, Japan, China and the Philippines’ solar incentives are close to their respective solar LCOEs, but are enough to
incentivise development. This is especially the case in Japan where costs seem to be inflated due to the high tariff.
Vietnam does not have solar incentives at present and the average power price is too low to make projects viable.
Note: Only feed-in-tariffs for utility-scale (>1MW) projects present. Vietnam has no solar incentives; Indonesia shows the solar auction ceiling price; Thailand shows the allin power price under a feed-in premium or ‘adder’ programme. India shows the national benchmark FiT.
Source: Bloomberg New Energy Finance
19
APAC WIND LCOE VS WIND TARIFF ($/MWH)
450
400
350
300
250
200
150
100
50
Low
●
●
●
●
●
●
Range
Mid
Philippines
Japan
Thailand
China
India
Vietnam
Malaysia
Indonesia
0
Feed-in tariff or Average power price
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
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.
20
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21
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