Techno-Economic Feasibility of Pico-Hydropower in Southeast Asia: An Analysis of LCOE and Carbon Emission Reduction

This study evaluates the techno-economic feasibility and carbon reduction potential of pico-hydropower in Southeast Asia, focusing on six representative countries: Indonesia, Malaysia, the Philippines, Vietnam, Laos, and Myanmar. Using a Levelized Cost of Electricity (LCOE) framework, the analysis demonstrates that pico-hydro systems can deliver electricity at costs between 0.04 and 0.11 USD/kWh, significantly lower than diesel-based mini-grids (0.25-0.60 USD/kWh) and comparable to solar PV. Sensitivity analysis indicates that discount rate and capacity factor are the most influential variables affecting LCOE, while capital expenditure plays a moderate role. Environmental assessment shows that a typical 5 kW pico-hydro system operating at a 60% capacity factor can displace 23-27tCO₂ annually if replacing diesel generation. At scale, deployment of 10,000 such systems across Southeast Asia could avoid more than 250,000tCO₂ annually, contributing to member states’ Nationally Determined Contributions under the Paris Agreement. Despite these advantages, barriers to widespread adoption include hydrological variability, financing constraints, inadequate policy frameworks, and limited technical capacity at the community level. Opportunities lie in hybridization with solar PV, carbon finance revenues, and integration into rural development strategies. The findings underscore pico-hydro’s role as an underutilized but highly promising option for decentralized electrification and climate mitigation in Southeast Asia. Policy support, concessional financing, and capacity-building are essential to unlock its full potential and ensure long-term sustainability. Overall, this study highlights the strategic role of pico-hydro in advancing affordable, low-carbon energy transitions for rural Southeast Asia and offers evidence for its inclusion in regional renewable energy planning.