Floating Power Plant Market: South East Asias Renewable Revolution

Floating power plants, particularly floating solar panels, have gained traction recently as innovative renewable energy solutions. Inkwood Research predicts the global floating power plant market to project a 10.74% CAGR, generating a revenue of $19.92 billion during the forecast period, 2023-2028. With its unique geographical and socio-economic characteristics, South East Asia is at the forefront of this emerging trend.

Floating Power Plants in South East Asia: 5 Pillars of Development

Pillar 1: Harnessing Abundant Water Resources and Overcoming Land Scarcity

• Water Bodies as Alternative Spaces: South East Asia is home to abundant water resources, including reservoirs, lakes, and ponds. These vast water surfaces present a significant opportunity for deploying floating solar panels, which can help the region tap into a previously underutilized renewable energy source. With the increasing global focus on sustainability and reducing carbon emissions, floating solar panels provide an innovative solution that capitalizes on the region’s geographical strengths. (Source: Asian Development Bank)
• Limited Land Availability: The region’s rapid urbanization and high population density have led to land scarcity, making finding suitable sites for ground-mounted solar installations challenging. In countries like Singapore, where land is a premium resource, floating power plants are a viable alternative that helps overcome land constraints. By utilizing untapped water surfaces, floating solar panels can provide a renewable energy solution that does not compete for land with agricultural, industrial, or residential development. (Source: World Bank)

Pillar 2: Financial Viability and Technological Advancements

• Decreasing Costs: In recent years, the Levelized Cost of Electricity (LCOE) for floating solar systems has decreased significantly, making them more competitive with traditional solar installations. This reduction in cost is attributed to economies of scale and technological advancements in floating solar panel design, manufacturing, and installation. As the cost of floating solar panels continues to fall, more businesses and investors in South East Asia are likely to invest in this renewable energy solution. (Source: International Renewable Energy Agency) 

Pillar 3: Government Commitment and Incentive Programs

• Thailand’s Renewable Energy Target: The Thai government has set an ambitious target to increase its renewable energy generation capacity to 30% by 2037. As part of this commitment, the government has identified floating solar as a key technology for achieving this goal. By actively promoting and supporting floating solar projects, the Thai government is driving the growth of floating power plants in the region. (Source: World Economic Forum)
• Incentives in the Philippines and Indonesia: Both the Philippines and Indonesia have introduced feed-in-tariff schemes to encourage investment in floating solar projects. These incentive programs provide financial support to businesses and investors, making investing in floating power plants more attractive. By offering these incentives, the governments of the Philippines and Indonesia are demonstrating their commitment to renewable energy and fostering the growth of floating solar installations. (Source: International Energy Agency)

Pillar 4: Boosted Energy Efficiency and Infrastructure Synergies

• Cooling Effect: One of the unique advantages of floating solar panels is the cooling effect provided by the water on which they are installed. This cooling effect leads to higher energy production, especially in tropical regions like South East Asia, where heat can negatively impact the efficiency of traditional solar panels. By maintaining lower operating temperatures, floating solar panels can produce more energy and generate a higher return on investment for businesses and investors. (Source: ScienceDirect)
• Integration with Hydroelectric Dams: Floating solar panels offer the potential for seamless integration with existing hydroelectric infrastructure. By utilizing the surface area of reservoirs associated with hydroelectric dams, floating solar panels can be installed without requiring additional land or extensive modifications to the existing infrastructure. This integration results in a more stable and consistent power supply, as it combines the strengths of both hydroelectric power, which can be generated around the clock, and solar power, which is produced during daylight hours. (Source: Asian Development Bank) 

Pillar 5: Environmental and Social Benefits

• Reduced Land Use and Deforestation: Floating solar panels offer significant environmental advantages compared to ground-mounted installations. By minimizing land use, floating power plants help avoid deforestation or land conversion, which can have harmful environmental impacts. This reduced land use also means that floating solar panels can be installed without displacing local communities or agricultural activities, making them a more socially responsible renewable energy option. (Source: International Renewable Energy Agency)
• Biodiversity and Aquatic Life: Floating solar panels can also benefit local ecosystems. By creating shaded areas on the water’s surface, floating solar panels can help reduce water evaporation and create habitats for aquatic life. This, in turn, promotes biodiversity and contributes to the health and resilience of local ecosystems. Furthermore, the structures supporting floating solar panels can serve as artificial reefs, providing additional habitat for fish and other marine life. (Source: Frontier)

Floating Power Plants: South East Asia’s Renewable Revolution

The five pillars of floating power plants in South East Asia provide a comprehensive understanding of the factors contributing to the rapid adoption of this technology in the region. As businesses and governments continue to prioritize sustainability and renewable energy, floating power plants offer an attractive, environmentally friendly solution that maximizes the region’s unique strengths. By harnessing abundant water resources, overcoming land scarcity, leveraging financial viability, benefiting from government support, and promoting energy efficiency, these plants are poised to play a significant role in shaping the renewable energy landscape in South East Asia. These factors are anticipated to further propel the global floating power plant market growth.

By Sukanya Mukherjee