Australia is among the 40 countries that have agreed to cut their carbon emissions by an average of 5.2 per cent from 1990 levels by 2012
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Regional governments in Asia are keen to develop renewable energy sources to widen their generation mix. The ratification of the Kyoto Protocol should provide a welcome boost to their plans.

Renewable energy in Asia remains in its infancy, but should get a boost from the recent ratification of the Kyoto Protocol. The agreement will provide a framework for developing Asian nations to trade carbon credits with richer countries, improving the economics of biomass, wind, geothermal and other forms of renewable energy. Some regional governments too are beginning to encourage renewables, both to widen their gen eration mix and reduce dependence on imported fossil fuels, as well as for environmental reasons. And in some countries a greater focus on small-scale hydro, wind, solar or biomass projects is planned for rural areas.

So far, renewable generation in Asia (excluding large hydropower plants) is largely confined to a few small biomass and wind farms, along with a number of medium-sized geothermal plants in the Philippines and Indonesia. Government policy toward renewable energy varies widely, but it has not traditionally been a high priority and, in all countries except the Philippines, represents only a tiny proportion of the generating mix.

The ratification of the Kyoto Protocol could provide the impetus to kick-start a wider development of Asia’s renewable energy sector
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The ratification of the Kyoto Protocol – albeit without the USA – could provide the impetus to kick-start a wider development of Asia’s renewable energy sector. The protocol sets limits on the emission of carbon dioxide by rich countries in an attempt to curb global warming. The agreement’s clean development mechanism allows the sale of certified emission reductions, or carbon credits, to countries with emission targets under the agreement.

This provides a direct financial incentive to develop renewable energy sources – for which carbon credits are issued – particularly in cash-strapped developing countries with high renewable potential. Some non-governmental organizations have already been buying carbon credits from rural Indian and Thai biomass projects. The potential for cheap biomass generation in India, Malaysia and Thailand is particularly high, while extensive furt her geothermal potential exists in Indonesia and the Philippines.

A greater use of renewables would also alleviate the region’s draining dependence on imported oil. But at the moment, the impact of carbon credits on expanding renewable energy is likely to be moderated by low oil, gas and coal prices. Most analysts expect oil prices to remain weak through 2002, at around $18 a barrel for benchmark Brent crude. And coal prices are expected to fall further from current levels of around $30 per metric ton.

Geothermal success

The Philippines has the largest renewable energy sector in Asia, and, driven by a crippling dependency on imported oil, is keen to expand it further. Its greatest success has been geothermal power – which at 16 per cent accounts for the biggest slice of its electricity production. It has six geothermal plants totalling almost 2000 MW. They include the world’s biggest wet steam 710 MW Tongonan plant on the central island of Leyte.

According to Philippine state National Power Corp., or Napocor, there is the potential for a further 730 MW of geothermal power from 11 explored areas. Japan’s Kyushu Electric and the Philippine National Oil Company plan to develop a 40 MW plant in Albay province, while Marubeni plans a 100 MW plant at Cabalian in Leyte.

The Philippine Department of Energy claims the potential for domestic wind power could be as much as 70 000 MW, with solar and wave power potential also high. The country’s exposure to weather from the Pacific’s warm waters explains this, although the frequent typhoons in which most of the energy is carried, could prove difficult for wind farms to harness.

Rural electrification

The government plans to use solar, wind or micro-hydro to power half the country’s unelectrified villages, many of which are situated on isolated islands and cannot be linked to the national grid. Wind generation is targeted to reach 2 million barrels of fu el oil equivalent (Mboe) by 2010, with wave and solar power each contributing about half this, according to department of energy plans. Biomass production is targeted much higher at 110 Mboe, of which wood and charcoal make up around half the total, while coconut and rice husks, along with biogas, make up the bulk of the remainder.

In December 2000, WorldWater Corp. signed an agreement with Cebu Electric Cooperative to provide 1200 homes with solar electrification. In March 2001, the Philippine and Spanish governments and BP signed a $48 million contract to bring solar power to 150 villages. So far, just one 40 MW wind farm is underway, financed with $54 million from Japan. A biomass waste-to-energy plant is planned for Negros Occidental that would use 450 t of municipal waste per hour.

Indonesia too plans to expand renewable generation, particularly from geothermal power, which currently makes up about three per cent of generating capacity. Indonesia has considerable geothermal potential, but financial problems in the wake of Asia’s 1997 financial crisis have stalled further development. In fact some plants, such as Calenergy’s Dieng and Patuha plants in Java were only partially completed, and now lie idle after offtake agreements were broken. Dieng’s capacity is only 60 MW, compared with a planned 400 MW, while the planned 320 MW Patuha plant was only 30 per cent complete when Calenergy stopped work in 1998. A joint venture company, combining Indonesia’s state oil company Pertamina and generator PLN, is eventually expected to take over and run the plants.

In India, wind and biomass are already responsible for just over three per cent of the country’s generating mix, or about 3165 MW. It has been the private sector, rather than the government that has taken the lead, developing 80 per cent of all wind and biomass projects. With carbon credit financial incentives now in place, private investment in the sector is likely to rise further. India’s energy minister sees the expansion of the sector as a form of sustainable development, and also believes it will help with his goal of encouraging the decentralization of power generation in India.

Malaysia intends to build over 50 biomass and landfill power plants to meet a target five per cent, or 750 MW, of national power supply from renewables by 2005. Much of the biomass will come from Malaysia’s enormous palm oil plantations where tons of unused plant matter is produced. Malaysia’s Energy Commission expects that each plant of 6-10 MW will cost about $15 million.

The commission will license producers, which will sell electricity to Malaysia’s designated electricity supplier Tenaga Nasional Bhd, or its sister companies in the eastern states of Sarawak and Sabah. To date four licenses and two sales agreements have been signed. To attract more players, the government has granted tax breaks, while Tenaga and the other state suppliers will also pay a higher price for the electricity. Further incentives in the form of carbon credits are likely to accelerate the process. Germany’s Siemens is entering joint ventures with some of the prospective Malaysian generators, helping provide the necessary technology.

In its Green Plan 2012, launched this year, Malaysia’s neighbour Singapore – which has little renewable generation potential, but plenty of money to pay for cleaner electricity – outlined its plans to buy electricity generated using renewable sources from neighbouring countries. It hopes to set up an environmental academy to promote clean energy development around the region. But Singapore itself will focus on converting existing fuel oil-powered stations to cleaner gas imported from Indonesia and Malaysia.

In Thailand the government recently set a goal of tripling electricity generated using renewable sources (mostly biogas) to three per cent of the total by 2005. Thailand claims 26 per cent of total energy consumption is from renewables, but this is largely wood used in domestic cooking.

Carbon targets

Among Asian nations only Japan and Australia will have carbon emission targets imposed in the first round (Annex 1) of Kyoto cuts. They are among the 40 that have agreed, in consultation with 125 other nations, to cut their carbon emissions by an average of 5.2 per cent from 1990 levels by 2012. However, it is still unclear whether Australia will ratify the treaty – having stated its reluctance to do so without US involvement. Nevertheless, legal sources close to the Australian government say it is aiming to meet Kyoto’s 2012 emissions targets in any case. Japan is committed to ratifying the treaty later this year.

To help reach this goal, Australia’s liberal coalition government passed the Renewable Energy Act in April, which obliges all electricity wholesalers to buy two per cent of their electricity from renewable sources by 2010. Generators and project financiers are already investing, with some expecting tougher targets to be imposed. Recent projects include an A$100 million ($54 million) 70 MW wind farm in South Australia, sponsored by National Power Partners and Babcock and Brown.

Japan produces less than three per cent of its roughly 1000 GWh a year of electricity from solar, wind and geothermal energy sources. Under the Kyoto Protocol it is expected to reduce its carbon dioxide emissions – which represent 4.9 per cent of the global total – by six per cent before 2012. Japan’s leading role as a developer of environmental technologies should help in an ongoing drive to expand renewable energy production, although, unlike Australia, it has passed no domestic legislation to force change. Japan is expected to be a major buyer of carbon credits.

South Korea, which until recently had the highest rate of growth of carbon dioxide emissions in the world, has no target under the first stage of the Kyoto Protocol. It plans to promote research in renewable and energy-efficient technologies, but little else is expected until targets are imposed, which is likely under the second phase of the treaty. According to South Korea’s Ministry of Commerce Industry and Energy, the country currently produces just 1.1 per cent of it s power from non-hydro renewable sources, up from 0.7 per cent in 1995.