The power market in Brunei is expected to register a CAGR of more than 1% during 2020 - 2025. Factors, such as increasing population and power consumption, are resulting in the growth of the power market. With a decrease in the production of oil and gas, Brunei is expected to shift toward renewable power sources in the upcoming period. Whereas on the flip side, apart from the decreasing oil and gas production, the initial high investment for the development of renewable power sources is a challenge ahead of Brunei.
- The Brunei power market is highly dependent on thermal energy, which is the primary source of electricity generation in the region.
- In 2015, Brunei committed to generating 10% of its power from renewable energy sources by 2035, which is expected to create vast opportunities for the market players in the future.
- Brunei is also planning to develop the Temburong Smart City, where this city is projected to become the 'Green Jewel of Brunei' and would be powered mostly by solar. Initiatives like these are expected to drive the power market significantly.
Key Market Trends
Thermal Energy Major Source of Power Generation
- Power generation uses a variety of sources, ranging from fossil fuels like natural gas and oil to renewable sources like wind and solar. The energy mix for electricity generation in Brunei is dominated by fossil fuels, especially natural gas, which contributed almost 99% of the power generation in 2018.
- Brunei has not witnessed any significant change in the electricity generation capacity since 2017. With a capacity of 0.8 MKw, the electricity capacity is stagnant in the nation, which is entirely supplied by fossil fuel-based plants.
- In a country like Brunei, with a population of only 0.4 million, the natural gas production capacity of more than 12 billion cubic meters, in 2018, makes it not only self-sufficient to meet its power demand using natural gas but also an exporter in the market.
- Berakas Power Management Company is the primary operating company controlling more than 40% of the national electricity supply with four different power plants.
- The Department of Electricity Services (DES) is the government utility in charge of the generation, transmission, and distribution of electricity in the country. The DES also sets the standards for the usage of power in public buildings and oversees their overall electro-mechanical maintenance.
- With vast natural gas reserves and a lack of initiatives by the government in alternative energy sources, thermal energy is expected to dominate the power market in the forecast period.
Government Initiatives and Future Renewable Potential to Drive the Market
- Brunei has planned to achieve a 63% reduction in total energy consumption by 2035. Electricity consumption also witnessed a significant drop in 2018, reaching 2109 GWh.
- The Brunei government announced in 2015 that it is working toward increasing the renewable share in power generation by 10% by 2035, giving the main focus on photovoltaic and waste to energy production.
- In August 2019, Brunei Shell Petroleum announced its plan to invest millions to build 3 MW solar parks next to its head office, converting it from gas to solar power, which may a step toward renewable electricity in the forecast period.
- As of 2019, Brunei has only one solar farm in operation with a capacity of 1.4 MW. 'Tenaga Suria Brunei (TSB)' is located in Seria and has been operational since 2010, housing 9,234 solar panels supplying power to 200 houses.
- Although natural gas is the primary source of electricity in Brunei, in the upcoming period, renewables are expected to expand their share and drive the power market of Brunei.
The Brunei power market is consolidated. The major companies include the Department of Electrical Services, Berakas Power Management Company, Brunei LNG Sdn Bhd, General Electric Company, Toshiba Corp., and others.
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