AsiaElec: Electricity demand in SE Asia to rise in 2021
Electricity demand in Southeast Asia is likely to increase in 2021, following slow growth or contraction in 2020, thanks to state support that has mitigated the impact of the coronavirus (COVID-19) pandemic on power consumption, Fitch Ratings says in a new report.
In Vietnam, a resurgence of COVID-19 cases in the second half of the year led to the re-imposition of restrictions. As a result, Fitch expects Vietnam’s electricity demand to rise by 5% in 2021 (1H-21: 8% year on year), slower than the annual average of 9% in the past decade.
The government approved tariff subsidies for consumers in 2020, and this continued at lower levels in 2021. We expect Vietnam Electricity's (BB/Positive) ‘bb’ Standalone Credit Profile to have reasonable headroom to absorb the lower electricity demand and delay in tariff increase.
Fitch predicts electricity demand in Indonesia to increase by around 5% in 2021 (9M-21: 4.4%), after demand fell by 0.8% in 2020 due to the pandemic-led economic slowdown.
Fitch expects an electricity-tariff freeze and various COVID-19 relief measures to continue till the end of the year.
This will mean Perusahaan Listrik Negara (Persero) (BBB/Stable) will remain reliant on state support to sustain its operations over the medium term.
A spike in COVID-19 cases in Thailand led to a lockdown from July to September 2021, which is likely to drag down overall demand growth for electricity to 1%-1.5% for the year.
Thailand’s electricity demand declined by 3% in 2020 (2019: 3% growth), driven by the pandemic-led economic slowdown and decline in tourism.
The government provided several relief measures to aid households and businesses. We expect Electricity Generating Authority of Thailand's (BBB+/Stable) strong financial profile to provide buffer against lower electricity demand and tariff discounts.