Renewables offer opportunity for region to be energy security leader
As rapid economic and population growth continue in the Indo-Pacific, energy demand is surging faster than anywhere else on the planet. With demand expected to grow more than 60% by 2040, energy security will be a leading challenge in the coming decades, according to projections by the International Energy Agency (IEA).
To meet the region’s growing demand, Indo-Pacific nations are transforming their energy systems. They seek to achieve energy security and safeguard economies from price fluctuations and market instability and reduce dependence on imported energy, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) reported. Moreover, Indo-Pacific nations are striving to provide energy access to over 420 million people who lack it and to another 2.1 billion people who rely on traditional biomass for cooking and heating, the 2017 report said.
Shifting to low-carbon energy resources and diversifying the energy mix will enhance energy security, reduce environmental impacts, especially air pollution, and ensure access to affordable, reliable, sustainable and modern energy for all, the UNESCAP report said. “Tackling these multiple energy-related challenges necessitates a transition in the way energy is generated, transmitted and consumed,” the report said. “While the energy sector in many countries is slowly being transformed, the pace of change needs to be accelerated.”
Given the timing of the region’s powerful emergence on the world stage, the Indo-Pacific is poised to serve as a global model for switching to renewable resources, a solution widely championed to end fossil fuel dependence and ensure adequate energy resources for all inhabitants. “Continuing growth in energy demand in the power, heating and cooling, and transport sectors opens a multifaceted renewable energy opportunity in the region,” according to the 2019 “Asia and the Pacific Renewable Energy Status Report,” published by REN21, an international policy network dedicated to building a sustainable energy future with renewables, and funded by the Asian Development Bank (ADB).
Transitioning to renewables can diversify energy supplies, enhance energy access, reduce air pollution and alleviate poverty, among other advantages, advocates contend. “Renewable energy resources can play a pivotal role in achieving universal access to modern energy,” the report said. For example, “small-scale solar, wind and hydropower technologies, as well as internal combustion plants using biomass or biogas, can provide a reliable source of electricity in remote locations.” More than 750 million people in the broader Indo-Pacific still lack access to electricity, experts estimate.
“Increased investments now in renewable energy, energy efficiency and smart grids can create more high quality and long-term jobs, and reduce air pollution and greenhouse gas emissions,” ADB President Masatsugu Asakawa said during the IEA Clean Energy Transitions Summit in July 2020. “Economies will become more resilient to future shocks — because renewable energy with energy storage does not depend on fuel supplies, and smart grid systems can be brought back online rapidly after an event. Renewable energy can also help strengthen health facilities, particularly in rural areas — for example, solar-based cold chains will be essential to make vaccines available,” Asakawa said.
Trends and Targets
Already, the Indo-Pacific has outpaced Europe and the United States in shifting to renewables, accounting for more than 54% of new growth in renewables worldwide in 2019, according to a March 2020 report by the International Renewable Energy Agency (IRENA). The region has developed considerable renewable energy capacity across a range of technologies, including solar photovoltaics (PV), wind power, hydropower, bioenergy and geothermal, experts explain. China, India, Japan, South Korea and Vietnam, for example, had the highest new solar capacities in 2019, while China and the U.S. led in new wind power, the IRENA report said. That same year, the region encompassing Australia, New Zealand and the Pacific island nations saw the fastest growth rate in renewables at 18.4%, although the subregion’s share of global capacity is small, the report said.
The Indo-Pacific accounted for more than 52% of new investment in the renewables sector worldwide in 2018, according to the REN21 report. China led the region in investment in 2019, making up nearly a third of the global total, and Australia, India and Japan also were in the top 10 that year, according to Bloomberg New Energy Finance data. Many of the investment leaders also have some of the largest and most innovative projects in the region.
Australia, for example, in May 2020 announced a U.S. $191 million fund to jump-start hydrogen projects to meet the country’s goal to build a large-scale hydrogen industry by 2030, Reuters reported. “Importantly, if we can get hydrogen produced at under AUD $2 [U.S. $1.47] a kilogram, it will be able to play a role in our domestic energy mix to bring down energy prices and keep the lights on,” said Angus Taylor, Australia’s energy and emissions reduction minister. As of 2018, it cost AUD $6 (U.S. $4.42) per kilogram on average to produce hydrogen, Reuters reported. Infinite Blue Energy is developing a massive U.S. $220 million plant, 320 kilometers north of the company’s headquarters in Perth, Australia, to produce 25 tons of green hydrogen a day, powered by wind and solar energy, with first production targeted for late 2022.
India unveiled plans in late 2019 to build U.S. $6 billion worth of solar projects in the Leh and Kargil districts of Jammu and Kashmir. The Himalayan regions possess huge potential for solar power. The Ministry of New and Renewable Energy plans “solar power projects with a cumulative capacity of around 14 MW [megawatts] with a battery storage capacity of 42 MWh [megawatt-hour] in Leh and Kargil,” R K Singh, India’s minister of state for power and new and renewable energy, said on announcing the project. India’s Adani Group, meanwhile, headquartered in Ahmedabad, aims to become the world’s largest solar power company by 2025 and the biggest renewable energy firm by 2030, according to a July 2020 industry report. India is well on its way to creating its first 100% renewable city. Diu, on the eastern end of Diu island in Gujarat state, became India’s first city to run on 100% renewable energy during the daytime in 2016, as a participant in Prime Minister Narendra Modi’s Smart Cities initiative. The city of 42 square kilometers and more than 52,000 residents created a 9 MW solar park, installed solar panels on the roofs of government buildings and helped residents install rooftop solar PV units, the REN21 report said.
The Japanese government has also made investing in solar energy a priority. It introduced legislation in 2017 to help transition to renewable power for 24% of its energy mix by 2030, more than double its current production. Japan operates nearly three-quarters of the world’s 100 largest floating solar plants, according to the Power Technology website. Japan’s largest such facility at the Yamakura Dam covers 18 hectares and powers roughly 5,000 homes a year.
Many other Indo-Pacific nations have set ambitious targets for renewables and some are well on their way to reaching those goals. For example, in 2019, New Zealand set a target of 100% renewable electricity generation by 2035. The nation, which also aspires to build a multibillion-dollar pumped hydro storage plant, already is nearly halfway there with its existing hydropower and geothermal resources. “We can have an ambitious goal while also being pragmatic,” Dr. Megan Woods, New Zealand’s energy and resources minister, said on announcing the target. “We will be conducting five yearly assessments to ensure the energy trilemma of affordability, sustainability and security is well managed.”
Many of the region’s greatest successes in moving to renewables can be found in Southeast Asia and South Asia, which have the highest penetrations of renewables at 45.7% and 42%, respectively, according to the REN21 report. Countries with some of the region’s highest shares of renewables in total final energy consumption (TFEC) include Burma, 68%; Sri Lanka, 51.3%; the Philippines, 47.5%; and Indonesia, 47%, with those percentages driven by hydropower and bioenergy, the report found.
Indonesia is contemplating building a “smart and clean” capital city that relies on renewable energy for its electricity. In August 2019, the government revealed a plan to move the capital from Jakarta to East Kalimantan on the island of Borneo to manage Jakarta’s rapid urbanization and overpopulation, but has since delayed the U.S. $33 billion plan due to the economic slowdown caused by the COVID-19 pandemic. Building renewable energy infrastructure for the new city would offer opportunities for renewables investments. Meanwhile, the Philippine Department of Energy plans to adopt smart grid technologies on the country’s many islands. The electricity networks use digital technology to monitor and manage the movement of electricity from generation to various demand loads in the service area and improve grid reliability. The country’s largest distribution utility, Meralco, with more than 5 million customers, also plans to integrate an advanced smart grid platform for consumers to better manage their electricity consumption, with prepaid smart metering as one of its first services, according to the REN21 report.
Countries such as Bangladesh and Vietnam are also emerging leaders in developing and implementing renewable energy technologies in the Indo-Pacific. Bangladesh created a domestic solar power program known as Infrastructure Development Co. Ltd. (IDCOL), which provides power to more than 12% of its population. Bangladesh, in partnership with the World Bank, set up IDCOL in 1997 to fund renewable energy infrastructure projects. With a U.S. $700 million investment, the program had installed 4.2 million solar home systems benefiting 18 million people through mid-2019. In addition, IDCOL has installed 1,000 solar irrigation pumps, 13 mini-grids, 1 million cook stoves and 46,000 biogas plants to provide clean cooking solutions to more than 200,000 people. In the next five years, IDCOL aims to double the number of solar and cooking systems installed, with the goal of replacing every traditional cook stove in the country by 2030.
Many challenges remain to adopting renewable energy and energy-efficient practices. “Although the Asia Pacific region is a renewable energy leader worldwide, the deployment of renewables continues to lag behind that of traditional energy sources in supplying the region’s rapidly increasing energy needs,” the REN21 report said. The region includes six of the world’s largest emitters of greenhouse gases, China, India, Indonesia, Japan, South Korea and the U.S. Additionally, much of the region’s population growth occurs in cities, and it already houses 93 of the world’s top 100 most polluted cities, with 56 in China and 17 in India.
“A large gap remains between the ambitions of climate change mitigation and the pace of actions to reduce emissions,” the report said.
Conventional fossil fuel consumption continues to grow faster than deployment of renewable power in the region. Overall, modern renewables account for less than 10% of the region’s total energy consumption, experts estimate.
Most Indo-Pacific nations are not energy self-sufficient. Indonesia, which is the world’s largest coal exporter, and Mongolia, which is the ninth-largest coal exporter, are notable exceptions, according to the REN21 report. Many Indo-Pacific nations, including Japan and South Korea, import more than 50% of their energy.
Moreover, some of the largest countries in size and renewable energy potential still have relatively low shares of renewables in their TFEC, the report said. Together, India and China account for 28% of the world’s primary energy consumption, yet in 2016, India had less than 40% renewable energy share in its TFEC, while China’s share was below 20%, the report said.
Other obstacles to adapting renewables include financing, transition to more sophisticated government support for renewables and changing industry dynamics in response to rapidly growing demand, climate change constraints and growing urbanization, the report said.
Meeting the Indo-Pacific’s energy demand will require trillions of dollars of investment by 2040, according to IEA projections. “How countries meet that growing demand will significantly impact energy security and economic stability across the region,” Francis R. Fannon, U.S. assistant secretary at the bureau of energy resources, said during a June 2020 workshop for Asia EDGE (Enhancing Development and Growth through Energy). “That has global ramifications.”
Launched in 2018 with an initial investment of U.S. $140 million, Asia EDGE supports energy security, diversification, access and trade across the Indo-Pacific. Under the program, India partnered with the U.S. Federal Energy Regulatory Commission in October 2019 to establish the Flexible Resources Initiative to strengthen India’s ability to raise private capital, finance its security needs and enhance opportunities for U.S. companies in the power system, Fannon said.
Key Cooperative Efforts
Regional cooperation is critical for improving clean energy practices and energy security, the REN21 report said. Cross-border power trading, for example, has proven especially beneficial in the Mekong region of Southeast Asia. Through Asia EDGE investments, Japan and the U.S. Department of State and U.S. Agency for International Development (USAID) created the Japan-U.S.-Mekong Power Partnership to target regional electricity grids to support U.S. firms in building cross-border transmission lines.
“Increasing regional cooperation can help to improve the access to energy among the energy-deficit developing countries in Asia and can benefit the region in terms of the preservation of natural assets, agricultural production, and food security,” an April 2020 report on South Asia by researchers at the ADB Institute found. Moreover, “enhancing regional cooperation and integration in different layers of resource sharing, production, and trade can bring countries together into an interdependence network to ensure maximum use of renewable and non-renewable energy resources.”
Energy Cooperation Leaders in the Indo-Pacific
Leading organizations and initiatives that are promoting renewable energy and energy efficiency in the Indo-Pacific include the United Nations Economic and Social Commission for Asia and the Pacific, the Asia-Pacific Economic Cooperation Energy Working Group, the South Asian Association for Regional Cooperation Energy Centre, the Central Asia Regional Economic Cooperation program, the Association of Southeast Asian Nations Centre for Energy, and the Pacific Centre for Renewable Energy and Energy Efficiency, as identified in the REN21 report.
South Asian Association for Regional Cooperation (SAARC) Energy Centre
SAARC was created in 2006 with an energy cooperation program aimed at converting energy challenges into development opportunities. The platform involves officials, experts, academia, environmentalists and nongovernmental organizations to tap potential across areas including the development of hydropower, other renewables and alternative energy. The Energy Centre promotes technology transfer, energy trade, energy conservation and efficiency improvements, enabling stakeholders to meet energy challenges faced by SAARC member states.
U.S. Agency for International Development (USAID)
In 2000, USAID launched the South Asia Regional Initiative for Energy Integration program, covering Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. The first three phases focused on cross-border energy trade, energy market formation and clean energy development, while the most recent phase focuses largely on advancing regional market integration.
Association of Southeast Asian Nations (ASEAN)
The ASEAN Centre for Energy was established in 1999 as an intergovernmental organization to accelerate integration of energy strategies within ASEAN member states. The center provides information and expertise to ensure that energy policies and programs are in harmony with the region’s economic growth and environmental sustainability. The ASEAN Plan of Action for Energy Cooperation 2016-2025 contains initiatives for cooperation in transitioning to clean and affordable energy systems. For example, the ASEAN Smart City network aims to synergize efforts for smart and sustainable urban development. The network of 26 pilot cities share best practices, facilitates projects with the private sector and secures funding from external partners such as the Asian Development Bank (ADB).
Greater Mekong Subregion
The countries that comprise the subregion — Burma, Cambodia, Laos, the People’s Republic of China, Thailand and Vietnam — collaborate largely based on power trade from available hydroelectric potential along the Mekong River. The ADB and other sponsors, for example, are working to: increase connectivity through sustainable infrastructure development and transformation of transport corridors into transnational economic corridors; improve competitiveness through efficient facilitation of cross-border movement of people and goods and the integration of markets, production processes and value chains; and build a greater sense of community through projects and programs addressing shared social and environmental concerns.
Pacific Island Nations
Secretariat of the Pacific Community
The secretariat is the principal platform for cross-sector regional development cooperation in the Pacific and is a founding member of the Council of Regional Organisations of the Pacific. Its Georesources and Energy Programme seeks to leverage use of the Pacific’s energy resources to ensure sustainability and reduce environmental impact. The program is committed to reducing the carbon impact of existing energy networks and usage, and focuses on governance, technical assessment and capacity development. In conjunction with the government of Tonga, the secretariat hosts the Pacific Centre for Renewable Energy and Energy Efficiency.
Pacific Power Association
This intergovernmental agency promotes the cooperation of Pacific island power utilities in technical training, information exchange, sharing of senior management and engineering expertise and other activities.
University of the South Pacific
The university, owned by 12 member countries, is responsible for providing higher education and sustainability research for the Pacific region and has activities that support renewable energy expansion.
Source: “Asia and the Pacific Renewable Energy Status Report,” REN21, 2019