The wind of change seems unstoppable
Last week I had the honor to moderate two panels during Singapore International Energy Week—one during Annual Asia Wind Energy Conference and the other at the Storage Conference, as Recharge’s Asia researcher.
Singapore was not a common location for renewable conferences. Just two-three years ago, when thinking of SIEW, the image I have would be a basket of energy conferences—but all having some correlation with hydrocarbon. To some extent, that is still the case. After all, Singapore is a hydrocarbon commodity trading hub in Asia, and the city-state has played a limited role in the global wind/solar boom seen in the previous years.
But that role appears to be changing, and the land-constrained country has a growing interest in renewable. Several different “first” renewable events debuted during SIEW this year—wind, storage, and others—is a clear indication.
Still, the Southeast Asian country is unlikely to lead in a competition of installing solar/wind. Its rising interest in renewable, in my view, reflects more of the “energy transitions” and new energy development trends that appeared in other Asian countries.
Energy Transition in East Asia
An obvious “transition” occurs in East Asia. Taiwan, Korea, and Japan are all looking to transform their conventional-energy-based power structures by replacing with renewable.
The drive to renewable in Korea and Taiwan, especially, has become part of the top national political agenda, as public attitude towards traditional supply (nuclear) has been a sea change since “Fukushima.”
This year, we saw the start of Taiwan’s booming offshore wind market, provided by political determination to phrase out nuclear. President Moon Jae-in of S. Korea pledged to do the same and already have nuclear power load factor drop from over 80% to around 50% this year.
Under pressure from the nuclear industry, Moon administration remains steadfast of its position, planning to allocate 62.1% of government funding (for power industry) to renewables, and only 8% to nuclear next year.
In Japan, although the government still looks to revive nuclear. The pressure from the public is likely to push things in similar direction (like those in Korea and Taiwan).
Woodmac’s recent research suggests that renewable sectors in most East Asian countries would increase 2-10 fold in the coming decade(with China the exception).
The growth potential in these market has attracted Singapore-based capital and the energy companies. The latter has a lot to add in offshore wind and floating solar market, as many are experienced in the marine-based industries and could translate their skill sets to the renewable sector.
Then there are the emerging markets in South Southeast Asia. Like Vietnam, these regions are growing “power” hungry, looking at solutions to fuel the economy.
With slow progress in infrastructure in the past decades, these countries are at a crossroads to design their future energy. But whether to go hardcore on renewable or to develop conventional thermal power and bear the environmental cost is the question.
The steep cost reduction of solar and wind helps renewable to make the case. But still, concerns over cost, grid capability, and technology know-how are here to stay in these markets. Renewable would need to battle over fossil fuels in these regions.
Given the lacking of grid development and power exchange markets in these regions, it is challenging to develop clean baseload, in my opinion.
Still, the previous mentioned Woodmac research projected that South Asian countries would at least double its renewable capacities in the coming ten years.