Spark needed for Asia's renewable energy plans
Government policy must bring down cost, provide clear trajectory
Ten years have passed since the first Singapore International Energy Week.
In that time, the world's energy landscape has undergone a dramatic transformation, spurred by an unprecedented expansion in renewables.
Globally, for the last five years, new power-generating capacity from renewables has outstripped those fuelled by conventional sources. And between 2001 and last year, renewable generation capacity additions grew 10 times, from 16 gigawatts (GW) to 161 GW.
A fifth of the energy delivered to consumers comes from renewable sources. Wind and solar, which account for the bulk of renewable-energy investments, are now among the renewable sources that are economically competitive with conventional sources of power.
In recognition of this, more than 170 countries have established renewable-energy targets, and major global businesses such as Google, Facebook, Apple and Microsoft are producing and procuring renewable energy to power their operations.
In addition to the business case, the global drive to address climate change is providing further momentum to the deployment of renewables worldwide, given that the energy sector accounts for two-thirds of global emissions.
Our analysis finds that an energy transition by 2050, in line with the "below 2 deg C" objective of the Paris Agreement, is both technically feasible and economically attractive.
Renewable energy and energy efficiency would meet 90 per cent of the emissions reductions needed.
Asia currently accounts for 62 per cent of employment in renewables worldwide.
China - already the world's leading investor in hydro, wind and solar power - is proposing further scaling-up of its renewables plans as a means of reducing environmental pollution and curbing its greenhouse gas emissions.
India aims to install 275 GW of renewable energy by 2027.
Singapore, an alternative-energy disadvantaged state, plans to raise installed solar power capacity to 350 MWp (megawatt peak) by 2020 and to 1 GWp (gigawatt peak) beyond 2020.
In Asia, the International Renewable Energy Agency's cost benchmarking places hydro and biomass at the lower end of the global scale, at around four US cents (five Singapore cents) to six US cents per kilowatt-hour.
Solar photovoltaic cells and wind are still costly, relative to the rest of the world.
There is thus a role for government policy in these sectors to bring down costs, develop mature markets of sufficient size and provide a clear trajectory for the market.
Renewables have much lower marginal operating costs and, within a policy environment that increasingly favours clean technologies, may also benefit from priority grid access.
Furthermore, high-pollutive sources such as coal generate additional regulatory burdens that favour increases in capital market flows to renewables.
For Asia, which is poised to make record-breaking investments in fossil fuels, asset stranding is an issue that must be explored carefully as countries make energy choices for the future.
More generally, the energy sector is undergoing a tremendous transformation, driven by rapidly evolving innovative technologies, new business models and the blurring of lines between different sectors - for instance, the electrification of automobiles.
The conventional carbon-intensive energy infrastructure will have to respond to this transition.
Finally, renewables can help tackle the energy-access challenge in Asia.
For urban populations and others on the periphery, extension of the power grid remains a feasible option. But roughly 80 per cent of those without access to electricity live in rural areas - many on small islands, especially in Asia.
Off-grid renewable energy solutions such as stand-alone and mini-grid renewable electricity solutions are more adaptable and are now viable, thanks to improved reliability, falling technology costs and supportive policies.
The transformation of the global energy landscape is inevitable. How Asia rethinks its energy future and navigate change during this upheaval is a question that energy leaders in the region have to think through today to reap the benefits tomorrow.
The writer is director-general of the International Renewable Energy Agency. This article was published in The Business Times last Friday.