Recently, Yiwei Lithium Energy Malaysia Limited, a wholly-owned subsidiary of Yiwei Lithium Energy, signed a memorandum of understanding with INVEST KEDAH BHD. The two parties plan to establish Yiwei Lithium Energy Malaysia Energy Storage Company and purchase a new Phase II plot to start the construction of energy storage factories to meet the energy storage market demand in Malaysia. At the end of 2023, Yiwei Lithium Energy had just completed the establishment of its Singapore branch.

In addition to Yiwei Lithium Energy, according to Battery China, Ningde Times, Ruipu Lanjun, Guoxuan High tech, Xinwangda, Lishen Battery, Far East Battery, Xingheng Power, Jingke Energy, and others have all established their presence in the Southeast Asian energy storage market.

Southeast Asian energy storage market is heating up

In terms of demand, with the continuous growth of energy demand, the problems of insufficient fossil energy resources, electricity supply gaps, and high electricity prices in Southeast Asia have become prominent. Meanwhile, according to the goals of the Paris Agreement, Southeast Asian countries must deploy approximately 21GW of renewable energy annually by 2030. Therefore, Southeast Asian countries are actively promoting the increase in the proportion of renewable energy generation. For example, Indonesia plans to reach 23% by 2025 (9% in 2020), Malaysia plans to reach 41% by 2040 (25% in 2022), and the Philippines requires renewable energy generation to account for over 50% by 2040.

For Southeast Asian countries, developing renewable energy to improve energy security and reduce carbon emissions is urgent. It can be foreseen that with the increase in the proportion of renewable energy connected to the grid, the demand for energy storage will also increase to ensure the stability of power supply and improve energy utilization efficiency. It is expected that from 2020 to 2030, the cumulative increase in the ASEAN energy storage market will be close to 15GWh.

From a geographical perspective, there are many islands in Southeast Asia, and some archipelago countries mainly rely on off grid power grids. The power infrastructure of each country is already weak, and the residents of Shanghai Island are relatively scattered, with poor standardization of overhead lines, creating a large development space for distributed rooftop photovoltaic energy storage. Taking the Philippines as an example, many remote islands are unable to connect to the power grid, and natural disasters occur frequently, making energy storage a necessity in their power supply market. Data shows that the Philippines will accelerate the construction of renewable energy in the future, with an expected allocation of 6GW of energy storage.

In terms of policies, various countries have introduced relevant preferential policies, which have to some extent promoted the demand for local energy storage installation. For example, in May 2023, Vietnam released the Eighth Electricity Development Plan, with the goal of stopping the development of coal-fired power projects by 2030 and stopping the use of coal-fired power generation by 2050. By 2030, Vietnam's photovoltaic power stations will increase to 12GW and energy storage to 2.7GW.

The Philippines has released a renewable energy plan and conducted its second green energy bidding plan in July 2023, awarding 3.4GW of wind and photovoltaic projects. The plan is to develop from 2024 to 2026, which will simultaneously drive the Philippines' energy storage installation. It is worth noting that the Philippines has lifted the 40% shareholding limit for foreign investment in renewable energy projects in its policies, and has included green ecosystem industries such as electric vehicles, renewable energy, and energy storage as "priority investment industries for foreign investment", providing varying degrees and durations of tax incentives.

In order to vigorously promote changes in energy usage habits and create new business opportunities, Malaysia released a national energy transformation roadmap in the second half of 2023, which made clear plans for the development of projects such as rooftop solar energy and energy storage. Officials have stated that rooftop photovoltaics are one of the easiest things to focus on, as they can accelerate our energy transition. In an interview, the government has allocated 50 million ringgit to install solar panels on the roofs of government buildings. Indonesia, Thailand, Singapore, Cambodia and other countries are continuously promoting the development of renewable energy through different forms.

In terms of supply, the high cost-effectiveness of Chinese energy storage products is expected to accelerate the penetration of Chinese energy storage industry chain enterprises into the Southeast Asian market. On the one hand, domestic photovoltaic and energy storage battery enterprises are actively exploring the second growth curve and showing a strong trend of setting sail to the sea; On the other hand, photovoltaics have entered the era of parity, and lithium-ion products will achieve rapid cost reduction in 2023, which is highly attractive to Southeast Asia, which has a strong demand for energy storage and is sensitive to prices. The installation demand has been greatly stimulated. As Zhang Jianhui, Chairman of Haibosi Chuang, said, "It's not because the domestic market is too competitive that we choose to export. In fact, the international market requires Chinese energy storage batteries and low-cost supply chains to support the overseas price system. The vigorous export of energy storage to a certain extent represents the global price competitiveness of China's energy storage industry chain.".

Undoubtedly, the Southeast Asian market, which is in its early stages of development, has great growth potential. According to incomplete statistics, in 2022, the Southeast Asian market accounted for only 2% of the newly launched new energy storage projects globally. However, in 2023, its market demand grew rapidly, with main markets including Thailand, Malaysia, the Philippines, Vietnam, Indonesia, Singapore and other countries.

Chinese battery companies going overseas to Southeast Asia

Chinese energy storage battery companies are accelerating their entry into the Southeast Asian market. Some industry insiders say that the key lies in how to integrate into the local supply chain system and closely integrate with the local industry. Although the overseas market appears to have high returns, the threshold is also very high. Due to the involvement of too many stakeholders, it is difficult to summarize a method that can achieve a one size fits all approach to project implementation. For now, we can only glimpse some clues through the actions of some battery companies in the Southeast Asian market.

On the Thai side, Beehive Energy established "Beehive (Thailand) Company" in 2023 and reached a cooperation agreement with international energy giant Banpu. The two sides will deepen cooperation in the development, production, and sales of vehicle power batteries, 2-3 wheeled vehicle batteries, energy storage, recycling, and other fields, and jointly explore the new energy market in Southeast Asia; Yiwei Lithium Energy is partnering with Thai company EA Group (Energy Absolute Public Company Limited) to jointly establish a joint venture in Thailand and build a battery production base with an annual production capacity of at least 6GWh; Xingheng Power has reached a strategic partnership with Thailand's Make To Win Holding Public Company Limited to accelerate its expansion into the Southeast Asian market; The first battery product of Guoxuan High Tech Thailand factory was officially launched in December 2023.

In Singapore, Far East Energy provides a smart liquid cooled energy storage system for the Jurong Island Energy Storage Project, the first 100 MW energy storage power station in Singapore. It is reported that the power plant is currently the largest independent energy storage project in Southeast Asia. Vision Energy has partnered with Singaporean Shengke Group this time and has established a localized specialized operation and maintenance team in the local area.

In Indonesia, Ripland Jun and VENA Energy from Singapore have reached an exclusive supply agreement for an 8GWh large-scale energy storage project in the Indonesian capital Jakarta, aiming to provide clean energy reserves for Indonesia. Xingheng Power has established an overseas factory in Indonesia. It is reported that in December 2023, the first batch of batteries from Xingheng Indonesia's factory were successfully taken offline.

In the Vietnamese market, Guoxuan High tech announced in January 2013 that it would cooperate with the local Vietnamese automotive brand VinFast to establish a joint venture battery factory. The first phase of the project is planned to have an annual production capacity of 5GWh, making it Vietnam's first lithium iron phosphate battery factory. In 2020, Far East Battery had already started collaborating with VinFast. In addition, according to Battery China, Jingke Energy, Keshida, Tianneng Co., Ltd., Gurivat and others have all set up factories in Vietnam.

Overall, the energy storage market in Southeast Asia is rapidly rising. With the explosive increase in energy demand in Southeast Asian countries and the deepening layout of domestic battery companies in the Southeast Asian market, the future Southeast Asian electricity and energy storage market will be greatly developed. As judged by Xingheng Power, "In the next 3-5 years, the Southeast Asian market will definitely be one of the fastest-growing markets in the world."Editor/XingWentao