Asia's push towards renewables driven by necessity to diversify beyond fossil fuels

Key Concepts:

• Renewable energy demand and growth in Asia
• Energy diversification and security
• Regulatory certainty for investment
• International cooperation in energy
• Gas as a transition fuel
• Geopolitical and economic headwinds
• Hydrogen as a decarbonization solution for hard-to-abate sectors
• Blended finance models and regional partnerships

1. Asia's Green Energy Push and Demand Forecasts:

• The International Energy Agency (IEA) reports a significant surge in electricity demand in Southeast Asia, exceeding 7% in 2024, with a projected annual increase of around 4.5%.
• China's power consumption grew by approximately 7% last year and is expected to rise by about 6% annually through 2027.
• Asia needs to scale renewables to cover over a third of new demand by 2035, while diversifying beyond gas and coal.

2. Critical Factors for Meeting Energy Demand (IEA Perspective):

• Diversification of Energy Supply: Expanding the range of energy sources to enhance energy security.
• Regulatory Certainty: Establishing clear and stable regulations to encourage greater investment in the energy sector.
• International Cooperation: Fostering collaboration among nations to address energy challenges collectively.

3. The Role of Gas as a Transition Fuel:

• Gas is expected to continue growing by about 30% between now and 2050 in the Asia-Pacific region, remaining a critical fuel source.
• However, pursuing diverse energy sources, including renewables, is essential for energy security.
• Renewable energy has significant potential in the region, up to 20 terawatts.

4. Economic and Geopolitical Headwinds (EDB Renewables Perspective):

• Miguel Fonker of EDB Renewables argues that current economic challenges are not unique to clean energy but affect all sectors due to an unstable geopolitical context and rising interest rates.
• China's push for renewables is partly driven by a desire to reduce dependence on oil imports and geopolitical instability.
• Renewables are seen as a good ingredient for safety, security, national security, and competitiveness in terms of cost.
• Investments in renewables continue to exceed estimates due to technological advancements and economic and geopolitical factors.

5. Hydrogen as a Decarbonization Solution (Gentari Perspective):

• Sushil Proit of Gentari (Petronas' renewable arm) highlights the company's focus on hydrogen as a key component of the energy system, especially for decarbonizing hard-to-abate sectors.
• Gentari is developing hydrogen projects in India, Sarawak, and the peninsula side, focusing on optimizing every piece of the puzzle to make hydrogen viable for customers.
• Hydrogen production is being pursued in locations where it can be produced at a reasonable cost.

6. Asia's Renewable Energy Trends and Future Directions:

• Asia's renewable energy trends are driven by the need to diversify beyond fossil fuels.
• Energy Asia 2025 will focus on policy frameworks to boost investor confidence, blended finance models, and regional partnerships.
• Cross-border grids and shared hydrogen corridors are being explored.
• The message is that Asia must pursue an energy mix that secures supply today while scaling clean technologies for tomorrow.

7. Notable Quotes:

• IEA Representative: "The need to diversify our energy supply, secondly the importance of regulatory certainty to encourage more investment in energy, and thirdly the need for international cooperation."
• Miguel Fonker (EDB Renewables): "I think that regions need to understand that for safety purpose security national security but also for competitiveness in terms of cost renewables are a good ingredient and a natural and primordial ingredient."
• Sushil Proit (Gentari): "We believe that hydrogen will become a part of the energy system especially to decarbonize hard to emit sectors."

8. Technical Terms and Concepts:

• Terawatt: A unit of power equal to one trillion watts.
• Hard-to-abate sectors: Industries or sectors where reducing carbon emissions is particularly challenging (e.g., heavy industry, aviation).
• Blended finance models: Using a combination of public and private funds to finance projects.
• Cross-border grids: Electricity transmission networks that connect different countries or regions.
• Hydrogen corridors: Infrastructure for the production, transportation, and use of hydrogen.

9. Synthesis/Conclusion:

Asia's energy landscape is undergoing a significant transformation, driven by rising electricity demand, the need for energy security, and the imperative to decarbonize. While gas will continue to play a role as a transition fuel, renewables are essential for balancing security and sustainability. Overcoming economic and geopolitical headwinds requires strategic investments, supportive policies, and international cooperation. Hydrogen is emerging as a promising solution for decarbonizing hard-to-abate sectors, and regional partnerships are crucial for building the necessary infrastructure and fostering innovation. The key takeaway is that Asia must pursue a diversified energy mix that ensures a secure and sustainable energy future.