THE Asian power industry considers the transition to renewables a major challenge, second only to finding investment during an economic downturn, according to a survey conducted by a US engineering and construction firm.
According to Black & Veatch’s (B&V) Strategic Directions: Electric Industry Asia 2021 report, 34.4% of respondents considered renewables to be challenging, the second-largest share after uncertainty of investment at 37.1%. Respondents who cited energy storage challenges took up a 25.7% share.
“The renewables challenge can be construed as one of change management, rather than a challenge rooted in the technical aspects of decarbonizing Asia’s power infrastructure. The theme of managing change, often through the prism of government policy, regulation and socio-economic factors, is a trend across survey responses,” Black & Veatch said.
Regulators wielded significant influence in the Asian energy businesses, according to 65.6% of respondents. The financial and investment sector and customers were ranked second and third with a share of respondents of 56.3% and 50%, respectively.
“Renewable energy is critical to Asia’s future, but delivering on its promise will require a coordinated effort between the energy sector, regulators and other critical stakeholders,” B&V said.
The Philippines and Indonesia can attract investors for clean energy by shortening the time for project approval, B&V Executive Vice-President and Managing Director of Power Business-Asia Narsingh Chaudhary said.
“The time period for getting those approvals for this kind of clean energy solution needs to be faster, with policies which streamline bringing investment into the country,” he told BusinessWorld in an interview.
Mr. Chaudhary also said that the Philippine Feed-In-Tariff policy — a form of subsidy for renewables producers — as well as other incentives can encourage investors and developers.
According to the B&V report, the share of coal-fired energy in Southeast Asia in the power mix rose in 2018. However, 70% of respondents had “strong views about the decline of future investment in coal.”
Last month, Energy Secretary Alfonso G. Cusi announced a ban on all new coal-fired power plants, and the opening of a competitive bidding process allowing foreign investors to fully own large-scale geothermal plants.
During a BusinessWorld Insights webinar Wednesday, National Renewable Energy Board Chair Monalisa C. Dimalanta said the transition to renewable energy requires a “whole-of-government, whole-of-society” approach.
According to the Department of Energy, coal accounted for 44.5 % of the energy mix, with renewables at 25.4 % in 2015. — Angelica Y. Yang