State firms dominate Southeast Asia’s pumped hydro development

Indonesia’s Perusahaan Listrik Negara is the region’s top developer.

State-owned utility firms are leading the growth of pumped-storage hydro projects, with the top three developers in the region having significant government ownership, according to Rystad Energy.

Indonesia’s Perusahaan Listrik Negara is the top developer with 3.7 gigawatts of projects in the pipeline, followed by Vietnam Electricity, and Electricity Generating Authority of Thailand.

“The high upfront costs and the long time it takes to see a return on investment make pumped hydro projects less attractive to private companies,” the report read. “Additionally, the licensing process can be unpredictable, dragging out project timelines and adding risk for potential developers,” it added.

This is different for the Philippines with private firm San Miguel Corporate as its top pumped hydro developer.

Rystad said the Philippines’ unbundled electricity market enables competition in both power generation and distribution, creating volatile wholesale electricity prices.

“This presents an economic incentive for pumped hydro storage, making it a more attractive option for developers in the Philippines,” it added.

Robust policies are driving the sector’s growth in the region in the short term, Rystad Energy said, citing the Philippines’ Department of Energy which aims to offer 3.1 GW of pumped hydro capacity as part of the upcoming Green Energy Auction Programme in the second half of 2024.

Vietnam also aims to reach 2.4 GW of pumped hydro by 2023 under the Power Development Plan 8.

Indonesia, Thailand, and other nations in the region are driving pumped hydro growth through policy frameworks.