Southeast Asia's Gas-to-Power Ambitions Unlikely to Meet 2030 Targets
A recent study by consultancy Wood Mackenzie has questioned Southeast Asia's ambitions to achieve its gas-to-power targets by 2030. The report, titled 'Is Southeast Asia Being Gaslighted? A Deep Dive Into Southeast Asia's Gas-to-Power Market,' analyzed six major markets in the region and found a significant gap between government targets and realistic capacity additions.
The study highlighted that building a gas-fired power plant requires a complex process of sequential dependencies, including financing, gas or LNG supply infrastructure, and turbine delivery. According to Wood Mackenzie, a bottleneck at any single link delays the entire project, making it challenging for projects to meet their announced timelines.
The report noted that liquefied natural gas (LNG) has become a critical factor in regional gas supply, as domestic production declines. This increased reliance on imports exposes Southeast Asian markets to global market dynamics and cargo availability, which can be unpredictable. The study also pointed out that turbine delivery times are structurally long, limiting the room for catch-up for projects without secured equipment.
Wood Mackenzie's analysis found that Vietnam has the widest gap between its ambitious targets and achievable capacity by 2030, due to unresolved commercial disputes over fuel pricing and cost allocation. Thailand is also under pressure, with its draft power development plan facing feasibility concerns related to turbines, financing, and LNG import infrastructure.
The study suggests that Southeast Asia's gas-to-power ambitions may be overly optimistic, given the regional challenges in meeting project timelines and securing necessary equipment and supplies.