The energy industry in Asia is on the cusp of massive change.
Earlier this month, Malaysia’s Energy Minister gave a glimpse of what is happening in her country at Asian Utility Week in Kuala Lumpur. She spoke of the need to digitise the electricity grid; why Malaysia is pushing for the use of solar energy and engaging with ‘prosumers’; and the need for transparency to boost investment.
Her remarks were echoed in my conversations with utilities across Asia throughout the week. It’s clear that leaders are energised and optimistic about the possibilities. Here are the three big areas of priority in the region.
1. Distributed energy sources are becoming more available
Increasingly, households and businesses are setting up their own microgrids using alternative energy sources, enabling them to generate, store and sell their electricity. This process has become easier because of two things: alternative energy sources like solar energy have become cheaper, and more effective energy storage technologies have entered the market.
The Malaysian government has introduced a net energy metering (NEM) programme where domestic, commercial, industrial and agricultural customers can sell solar energy to other customers or back to the main grid. Energy produced through this scheme would be used first, and the excess sent to the national utility Tenaga Nasional Berhad.
New technology like blockchain has also made peer-to-peer trading of energy easier, presenting another form of disruption for traditional utilities. Energy transactions are usually complex because of the large number of parties involved, but blockchain allows buyers and sellers to deal directly within a safe platform.
2. Consumers are driving change
Increasing competition from deregulated energy markets and distribution of energy sources mean that companies are paying greater attention to their customers as important stakeholders in their growth.
Countries across Asia are adopting new technologies to better serve their customers. One such way is by setting up digital payments for utility bills. Thailand, a forerunner in the game in this respect, introduced an integrated app for paying bills, reporting power outages, and requesting for electricity connections more five years ago. It is also much more convenient to pay electricity bills in person as customers only need their national ID card to do so.
Another important way to enhance customer experience is by setting up smart grids. These can allow customers to track their daily energy consumption so they can better manage their electricity bills. Energy providers can also analyse the data collected to understand reasons for outages and understand customer behaviour better.
For example, data can explain why some customers pay their bills late, and energy companies can use this data to send out individual due date reminders. Countries like Malaysia and Thailand have chosen to invest in smart grids to provide more customer-centric services.
Smart grids can also make energy supply more reliable. Vietnam is using smart grids to predict energy demand by location, allowing it to adapt distribution across the grid.
3. Renewable energy is on the rise
For a long time, Southeast Asia has been slow in the uptake of renewable energy sources. However, transitioning away from traditional sources of energy is increasingly becoming the focus of governments in the region. Southeast Asia as a whole has targeted to reduce energy intensity level by 20% by 2020 and 30% by 2025 . Countries have implemented several strategies to ensure they will be on track to achieving these goals.
For example, Indonesia established its first energy cooperative, Kopetindo, in February 2018 – a start in transitioning towards more sustainable energy technology and sources. Energy cooperatives are regional organisations made up of citizens which can help promote the use of renewable energy.
Financial support is crucial in the uptake of clean energy, and several countries are prepared to make the investment. The Malaysian government introduced the Green Technology Financing Scheme which gives applicants a 2 percent interest rate subsidy for seven years and 60 percent loan guarantee. Vietnam has both raised feed-in tariffs for wind power and introduced tariffs for solar energy, making investing in renewable energy a lot more attractive.
Governments have also put in place policies to deliberately include renewable energy in the countries’ supply. Malaysia, for instance, is aiming for 20 percent of the country’s energy to come from renewable sources by 2025. Meanwhile, Vietnam aims to have 10 percent of energy coming from renewable sources by 2030, and it has to shift away from coal-powered plants to achieve this.
Enabling the future of energy
All of these developments point to the need for a modern grid that is resilient to risks and flexible to new opportunities. To manage this modern grid, Utilities will need greater insights to meet the changing demands of the grid and the expectations of the customer. Utilities, governments and transmission operators are looking for a single, authoritative source of truth on the status of their grid.
Geospatial platforms such as the ones Esri creates provide insights on your infrastructure and assets. It models the grid and its behaviour from power generation to the customer, providing accurate records, enabling real-time engagement, and delivering in-depth insights. We’ve just launched a new e-book that shows how utilities can create the grid of the future.
The energy industry in Asia needs reliable and accurate platforms as the bedrock of future innovations. It is clear that leaders in the region already recognise that geospatial is a technology that will enable the future of energy.
Matt Piper is Director of Utilities and AEC Industry Solutions at Esri. He is an industry thought leader who helps to shape the role of location intelligence within organisations. He has worked extensively with global utilities to help them harness digital transformation and create enterprise-wide value through location intelligence.