Anyone who thought that Asia’s thirst for more power in the recent years would be quenched by a steady flow of coal-fired plants at the expense of clean energy is steadily being proved wrong.
Yes, there are many coal projects in the pipeline as well as the recent commissioning of flagship coal plants boasting the latest technology, but the region has also utilized state-of-the-art gas-fired technology and embraced renewables.
During the last 10 years in developing Asia, more than 300 million people have been connected to electricity, ending a dependency on kerosene, firewood and charcoal. In the same timeframe, around $106bn has been invested in clean energy in the Asia-Pacific region – almost half of the total global investment.
For the first time, governments and financial institutions in Asia are turning to incentives like feed-in-tariffs, renewable portfolio standards, concessional loans for clean energy projects and other mechanisms to support clean energy development.
The number of countries with clean energy policies in Asia is increasing all the time. In 2006, only a handful had renewable energy policies – now 23 countries in the region have such policies in place.
In June, the World Bank released figures which showed that Asia accounted for about 60 per cent of the global progress on energy access and clean energy objectives between 2010 and 2012, “contributing well beyond its share of global population and energy consumption”.
The bank found that Asia’s performance on expanding renewable energy sources like solar, wind and geothermal was particularly strong. Whereas globally, consumption of these renewable sources grew by 4 per cent per annum, in Asia that growth was almost twice as fast at close to 8 per cent.
An example of the rise of renewables in Asia is the forecast by analysts at GlobalData that China’s installed wind capacity will treble from 115.6 GW this year to an estimated 347.2 GW by 2025.
Most of this will be onshore capacity, representing just over 96 per cent of all installations.
Last month, Bloomberg New Energy Finance released five predictions for the global energy sector, and one was that “natural gas will NOT be the ‘transition fuel’ to wean the world off coal. Many developing nations will opt for a twin-track of coal and renewables”.
This is certainly the case for some Asian countries – Vietnam is building new coal plants while upgrading its hydropower plants.
Meanwhile, other countries are taking their first renewable steps. Our article on page 24 spotlights Mongolia’s first wind farm and highlights the huge wind potential of the country that could be unlocked with the right financing mechanisms.
However, many of Asia’s established economies are embracing the latest gas-fired technology. This in turn is providing an invaluable business lifeline to many of Europe’s top OEMs.
While it was always the case that European companies would look to do more business in Asia, that has become an imperative in recent years as European policymakers ponder and tinker with the future direction of the power market.
The gas-fired technologies of Europe’s OEMs are among the best in the world yet they are struggling to be deployed domestically (see our review of the talking points at this year’s POWER-GEN Europe on page 48).
However, Asia is welcoming technology from Europe’s engineering powerhouses. Our snapshot of new power plants (see page 4) features several projects running on European equipment, while our focus on the latest cooling methods (page 20) features technologies making their global debuts in Asian plants.
All good news for Europe’s power companies – for the time being. But it can’t last. There are some types of equipment where Asian OEMs are closing the gap on their European rivals, and once they can match them on technology and beat them on price, then the party is over.
And Europe had better have its energy house in order by then, otherwise its power companies will find themselves with no potential markets internationally or domestically.