The growing energy demand in the Asia-Pacific region is a huge opportunity for renewable energy developers, as demand growth, expected to be twice that of other regions, is expected to attract $1.8 trillion in investments in clean energy over the next decade, he said. Wood Mackenzie in a recent report. Report.
However, the huge opportunities for investment and advancement in renewable energy come with increased risks for developers amid supply chain issues, cost inflation, and increased policy and financing risks, says WoodMac Head of Energy and Renewable Energy Research in Asia Pacific Alex Whitworth, and Yamato Kawata Senior Energy Market Analysts, Asia Pacific Energy & Renewable Energy Research.
The full costs of renewables – including transmission units, battery storage and maximum gas reserve units – mean that the development of clean energy “It is not currently able to compete with coal in the region,” he said. says an energy research and consulting firm.
There will be plenty of rewards for developers in the renewable energy sector in Asia Pacific, but the risks to investment and expansion are now higher than they were before the coronavirus and Ukraine crisis.
“Overall, generation costs will increase by US$650 billion each year for the next three years – an increase of two-thirds from the 2021 figures. The brunt of these increases will be borne by end users, with energy set to be 27% more expensive, or A total of an additional $1.7 trillion over the next three years through 2025, WoodMac analysts say.
More expensive fuel imports will translate into higher investment in the Asia Pacific energy market. Powered by price inflation, the sector is expected to attract $2.9 trillion in total investment in the next decade, with renewables being the main beneficiary. According to Wood Mackenzie, up to 60% of the necessary investment — or $1.8 trillion — will go into clean energy, mostly for wind and solar developments.
However, analysts said: “Renewable energy developers are increasingly vulnerable as supply chain and financing costs rise and grid integration problems worsen.”
Moreover, investment in energy storage is currently not sufficient to support the projected massive expansion of clean energy in the Asia Pacific region. By the end of this decade, storage levels will be at just 15% of peak network load, WoodMac estimates.
Renewables are expected to gradually replace fossil fuels in the region, with the share of wind and solar in Asia Pacific’s energy supply likely to exceed fossil fuels in 2036. The share of fossil fuels could drop from 67% now to just 23% In 2050, when solar power could account for up to 50% of the energy supply, according to WoodMac.
Aside from rising costs and supply chain issues, there is another factor that could slow the growth of renewables in the region – prioritizing energy security in clean energy goals in the wake of the Russian invasion of Ukraine and the subsequent rise in energy prices.
The largest and most polluting economies in the region, China and India, do not dump coal. On the contrary, they are betting on generating more coal-fired power to meet their energy demand. For example, the energy sector in India will need an additional sector 28 gigawatts of coal-fired power And the Central Electricity Authority (CEA) said earlier this month, the generation capacity by 2032. In China, the authorities complete to Maximizing the use of coal In the coming years as the world’s largest consumer of coal meets energy security needs, despite pledges to contribute to global efforts to reduce emissions.
The energy crisis and rising energy prices are paving the way for an increase in global demand for coal in the short and medium term. This year, for example, demand will outpace supply, commodity trader Noble Resources said at the Coltrans Asia 2022 conference held last week. Argus.
Buyers from Europe descend on Coltrans conference in indonesiathe world’s largest exporter of thermal coal, for supply.
Ben Lawson, an executive at Sanaman coal, told Reuters on the sidelines of the event:
“Coal is not going anywhere. We have another 20 years with coal, like it or not.”
By Tsvetana Paraskova for Oilprice.com
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from San Jose News Bulletin https://sjnewsbulletin.com/risks-are-rising-for-the-1-8-trillion-renewable-energy-revolution-in-the-asia-pacific-region/
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