Southeast Asia holds great potential in renewables but requires stronger policy coordination across the region to attract greater investment to realise it, said participants of a roundtable held at the side lines of the World Future Energy Summit in Abu Dhabi.
Organised by the International Renewable Energy Agency (IRENA) and the Energy Market Authority of Singapore (EMA), the roundtable discussed the findings of IRENA’s “Renewable Energy Market Analysis: Southeast Asia” report, best practices for attracting private investment for renewables in the region, and the challenges investors face.
According to IRENA’s report, energy consumption in Southeast Asia nearly doubled between 1995 and 2015, growing at an average pace of 3.4 per cent annually. This had powered regional economic growth to a collective GDP of USD 2.5 trillion in 2016 – triple of what it was in 2005.
Fossil fuels have been the main source of the region’s energy supply to date. In recent years, however, renewables have emerged as a viable option to meet Southeast Asia’s future energy needs amid rising concerns around energy security and environmental impact.
The signs are promising. Participants at the roundtable cited the region’s strong economic growth and relative stability as reasons to invest in renewables.
“There is no lack of will or financial capital to invest in renewable energy in Southeast Asia,” said Sandra Lozo, Programme Officer, IRENA. “Investors are willing to put more of their capital into the sector in this region and increasingly so.”
This is welcome news as the Association of Southeast Asian Nations (ASEAN) targets a renewable energy share of 23 per cent in the primary energy supply by 2025. For this to happen, investment must be significantly scaled up and in turn, investors need stable, robust and clear long-term policies to follow through on their decisions.
“It is very important that policymakers facilitate changes in regulations to promote transparency and competition,” said Paolo Frankl, Head of Renewable Energy Division, International Energy Agency (IEA).
Other concerns raised include the enforceability of offtake agreements, securing access to land required for the deployment of renewables and grid networks, as well as improving the quality of project documentation.
These issues need to be addressed both within and between countries in Southeast Asia through a holistic approach that encompasses policy, industry and infrastructure.
At industry level, the focus should not just be on the power sector but also cover other sectors like transportation, heating and cooling, said Lozo.
Infrastructure development across the region should also be coordinated and interconnected as much as possible, so that renewable energy can be easily shared among the different countries in Southeast Asia. This would have the added benefit of providing energy to areas in the region without access to electricity.
“This is the right time, the right moment,” said Azhar Othman, Regional Managing Director, Enercon Asia. “Not only are we helping to reduce global warming but at the same time, improve the lives of people who currently have no access to power.”