Green Mobility and Clean Power Present a $100 Billion Opportunity in Southeast Asia
A recent report titled “Renewable Energy Manufacturing: Opportunities for Southeast Asia” sheds light on the immense economic potential of Southeast Asia’s solar photovoltaic (PV) cells, battery, and electric two-wheeler industries. The report, a collaboration between the Asian Development Bank, Bloomberg Philanthropies, ClimateWorks Foundation, and Sustainable Energy for All, aims to support the development of the clean energy manufacturing sector in Southeast Asia while addressing the impacts of climate change.
According to the report, these industries present a revenue opportunity ranging from $90 billion to $100 billion by 2030. Additionally, the region has the potential to create around six million renewable energy jobs by 2050. The solar PV manufacturing capacity in Southeast Asia is primarily focused on cells and modules, with the potential to achieve an ambitious capacity of 125-150GW module capacity by 2030.
Southeast Asia is considered a solar PV manufacturing hub, accounting for 2-3% of the world’s polysilicon and wafer capacity and 9-10% of the world’s cells and modules capacity. The production is concentrated in four countries: Vietnam, Laos, Cambodia, and Thailand. The region’s solar installed capacity is projected to grow from 25GW in 2021 to 52GW in 2030, with an average annual capacity addition of around 3GW.
While the module supply capacity is expected to grow, some countries with smaller manufacturing footprints may continue to rely on imports. Encouraging renewables deployment through policy measures could further boost solar PV demand in the region. Currently, Vietnam stands out as the only country in Southeast Asia with a ‘high’ score on the World Bank’s Regulatory Indicators for Sustainable Energy, indicating potential for increased solar PV adoption among countries that prioritize supportive regulations.
The report also highlights the potential for Southeast Asia to develop a regional battery manufacturing value chain, increase domestic and regional demand, and establish itself as a regional and global export hub. By 2030, the region could produce 140-180GWh of battery cells. In Vietnam, the growth of electric vehicles is driving the demand for batteries, given the high vehicle demand and the potential for vehicle electrification.
Furthermore, the region has a significant assembly capacity for electric two-wheelers, currently at 1.4-1.5 million units per year, with the potential to reach four million units by 2030. Vietnam, for example, aims to achieve a 15% electric two-wheeler penetration by 2030, with a target of 100% electric two-wheeler sales penetration by 2040. This showcases the region’s potential for substantial growth in the electric two-wheeler market.