The International Renewable Energy Agency (IRENA) issued a whitepaper analysing South East Asia’s clean energy market.
According to the whitepaper ‘IRENA 2018: Renewable Energy Market Analysis: Southeast Asia’ energy consumption in the region will double by 2040.
Energy consumption is expected to grow by 4.7% per year through to 2035, hence the need to diversify energy supply to meet the growing demand.
Growing population, rising incomes and rapid rate of urbanisation are driving increases in energy consumption. For instance, the region is expected to witness a 25% increase in population by 2050.
To date, the region heavily relies on conventional energy resources for power generation and transportation. This has resulted in lack of adequate energy, power outages and damages to the environment due to large amounts of carbon being emitted into the atmosphere.
IRENA says increases in renewable energy investments in the region will help improve access to electricity to underserved consumers. More than 65 million people in Southeast Asia do not have access to reliable, clean, adequate and affordable electricity.
Adnan Z. Amin, director general at IRENA, says diversifying energy supply by expanding renewable energy portfolios will help the region to achieve wider socio-economic and environmental benefits.
Despite challenges such inadequate funding to expand renewable energy deployments, governments in the region have shown interests through designing and implementation of policies supporting clean energy rollout.
Members of the Association of Southeast Asian Nations have set a target to generate 23% of their primary energy from modern, sustainable, renewable sources by 2025.
Such policies, adopted at national and regional levels, have resulted in establishment of new financing mechanisms hence the region has witnessed an increase in renewable energy investments over the past decade.
According to IRENA, $27 billion was invested in renewables between 2006 and 2017. In 2015, the region managed to generate 17% of its total energy from renewables.
Indonesia, Malaysia,, the Philippines, Thailand and VietNam are comparatively more advanced in the region in terms of policy maturity and comprehensiveness.
Recommendations to expand the region's renewable energy market:
- Catalysing investments in the sector: The region needs to invest $27 billion a year.
- Increased capacity of domestic banks is key to improve access to capital at the local-level
- Improving the data and information base of energy use in end-use sectors is crucial to assess the potential, set targets and incentive structures, as well as to monitor progress
- Participation of local private sector and communities should be encouraged through dedicated and stable policy and regulatory frameworks, financial incentives and capacity building programmes
- From a long-term perspective, there might be a need to adapt power market design to incentivise flexibility
- Increasing interconnection capacity between countries and power systems is one of the key measures to improve grid access and system reliability and to accommodate higher shares of variable renewable energy.
Download the full white paper above.
Image credit: Stock.