Asia-Pacific may miss RE targets

Countries must attract investments to advance their clean energy goals.

Countries in the Asia-Pacific region except China are likely to miss their renewable energy (RE) targets by 2030 if they don’t come up with solid policies that would attract investments and boost capacity, energy analysts said.

“Except China, all other countries are expected to miss their targets unless they come up with more robust policies and bring in more investments,” Attaurrahman Ojindaram Saibasan, senior power analyst at GlobalData, told Asian Power. 

Most of them also lack a proper road map to ensure a smooth transition process, he added.

Missing the 2030 goal of cutting emissions by 45% under the Paris Agreement — and net zero by 2050 — would mean up to a 2.7-degree Celsius increase in global temperatures.

This warming means far more erratic weather conditions that could lead to large flooding, fires and droughts, all of which could devastate both communities and wildlife, according to the UK-based Renewable Energy Institute.

In contrast, China’s wind and solar are expected to overtake coal in its power production capacity for the first time in 2024, making up 40% of total installed capacity, according to Energy Monitor.

This makes China the likely leader in electricity production emission cuts between 2024 and 2026, at 1% to 2.4% each year, which is about half of the global reduction in absolute terms, it added.

Saibasan said one of the main obstacles to renewable energy growth in the region is the low cost of traditional power generation. It’s just cheaper to use coal than to build renewable power plants. 

“So for the time being, they stick to conventional sources,” he said. “But there must be more awareness, and the government should provide more incentives or tax breaks to renewable power developers.”

Japan and South Korea both have the technology and expertise on renewable energy, but they choose to focus on nuclear energy, which hinders the focus on RE development, Saibasan said.

Critics of nuclear power say it is expensive and slow to build — not the type of solution to the world’s climate emergency.
Saibasan also cited the long approval process for RE plants and grid integration, issues that have haunted the sector for so long.

Grant Hauber, strategic energy finance adviser for Asia at the Institute for Energy Economics and Financial Analysis (IEEFA), sees policy misalignment in many countries in the Asia-Pacific region.

“The renewable energy policies are not in the form that would encourage private investment and catalyse the potential for big domestic content investments,” he pointed out.

Indonesia, for example, has abundant and untapped potential in solar and wind power, but it has barely scratched the surface because of implementation challenges.

In South Korea, developing an offshore wind farm is a complex process. There is no national licensing authority, so developers must find their own sites, conduct feasibility studies, and negotiate with stakeholders, facing the risk of government rejection, Hauber said.

Never too late

“There needs to be… a policy reform that creates realistic conditions for developers to know that if they put in the effort, they will have a good chance of succeeding,” he added. 

Once authorities roll out the proper policy and licensing frameworks, building a power plant could be done quickly and cost-effectively, he said.

Saibasan said countries in the region need clear roadmaps and set attainable RE goals. Investor-friendly policies, including tax incentives, could also help.

Focusing on offshore wind and rooftop solar installations can address land constraints, whilst significant investments in grid and storage management are crucial, he added.

Saibasan and Hauber said time is running out before the 2030 deadline, and governments in the region must maximise opportunities to hit their renewable energy goals.

Saibasan said countries like Indonesia should explore other renewable energy options beyond solar power, such as wind and geothermal. “They should be looking at expanding their wind power and look for partnerships with European countries to develop offshore wind as well, which is going to be a very large scale,” he said.

The region should take advantage of its renewable energy supply chain given major supply hubs in China and India, he added.
Saibasan said there would be more global pressure to hit climate targets in the coming years, and governments must be up to the task of moving toward clean energy.

Hauber said it is never too late for the region to pass laws that will boost their renewable energy efforts. Vietnam, for instance, took seven years to approve a law on direct power purchase agreements. 

The measure allows RE procurement directly from producers via a private transmission line or using the national grid.

Saibasan said another country to watch out for is Taiwan, which is seeking to tweak its procurement policy for offshore wind. 

Meanwhile, South Korea should come up with policies that would allow it to quickly mobilise its manufacturing capabilities and for major corporations to contribute to the RE transition, Hauber said. 

Countries in the region could learn from the Philippines’ effective bidding structure, which has attracted domestic bids and minimised exchange rate risks, he added.

“It is a battle between traditional fossil forces and the new green economy. I think there's going to be, in many cases, learning by example, and adapting it for each of the countries,” Hauber said. “For some, it may take a revolution. It might take a really radical change of thinking. There's potential.”