Powering Up Sustainable Energy for Asia

A green transformation, if done right, can address poverty reduction goals and improve health and environmental quality across the region.

Expert comment Published 11 March 2019 2 minute READ
Installing solar panels in Wuhan, China. Photo: Getty Images.

Installing solar panels in Wuhan, China. Photo: Getty Images.

Asia’s cryosphere, the vast stores of frozen water in the high mountains that feed the rivers on which some 1.3 billion people depend, is warming far faster than average, an expert assessment warned recently, adding that two-thirds of Himalayan glaciers could disappear by the end of the century.

This and other warning signs make clear the need for a sustainable energy transition in Asia, not only given the urgency of mitigating climate change, but also because renewable energy technologies can help to provide cheap and reliable energy to areas where grid-based provision is unreliable or otherwise prohibited by geography or high costs.

A green transformation, if done right, can address poverty reduction goals and improve health and environmental quality. But achieving this requires rethinking many assumptions about the current system that generates and distributes electricity, and its interconnections with a genuinely sustainable society.

Renewables, particularly in distributed forms of production, can have a profound impact on how energy is supplied in a more efficient and flexible way, in a potentially revolutionary shift from the centralized model of building large power plants and long-distance transmission.

Markets are being disrupted rapidly not only by decarbonization – where greenhouse-gas emitting fuels are being phased out of economies – but also by digitalization, with big data and artificial intelligence being used to manage energy, and decentralization, the downscaling and transferring of the power to generate electricity from a few big suppliers to more numerous, smaller sources.

This is true in developing Asia, where 420 million people still lack access to electricity, but where in Thailand, for example, blockchain-enabled real-time peer-to-peer trading has demonstrated the potential to empower electricity consumers and allow them to access clean, resilient and affordable energy. Or in Myanmar, where solar photovoltaic micro-grids are helping to expand energy access.

Such under-the-radar trends are often obscured or ignored by experts and energy planners, but civil society groups and communities in the region are calling for – and working directly towards – an energy transformation.

Under business as usual scenarios, renewables in the Asia-Pacific are only predicted to reach 7% of the fuel mix by 2030. Yet if the region were to implement the UN Sustainable Development Goals, the proportion of renewables would rise to 22%. If governments achieve their pledges to the Paris agreement on climate change, the share would reach 35%.

There is, therefore, both an enormous need and opportunity – and aid and overseas investment institutions will play an important role in driving and enabling a range of energy transitions.

These institutions include traditional funders and cooperation partners like Europe, the United States and Japan.

But as China has put greater emphasis on South–South cooperation and investment in infrastructure through the Belt and Road Initiative, it also means much attention has shifted to its changing role as a donor.

China has demonstrated a remarkable energy transformation in its domestic market. Renewable electricity has even undercut the price of coal there in the past year. But Chinese firms, private and state-owned alike, are finding an outlet for overcapacity and shrinking domestic markets by exporting carbon-intensive production overseas and pursuing top-down, centralized projects such as large hydropower dams.

This presents a challenge to the vision of a cleaner, more modern and sustainable power sector in many parts of Asia, particularly in countries at an important inflection point in their development, like Laos, Myanmar and Cambodia.

One way to transform the incentives for these investment flows could be the financial markets, where ‘green bonds’” are increasingly part of investment portfolios being put together by firms committed to environmental, social and governance assessments of their operations and of the projects they support.

Upholding tools and standards, such as environmental impact assessments and monitoring health impacts, are also crucial components for transforming investment. More attention needs to be given to improving impact assessments, in particular strategic assessments that offer multiple options to be deliberated in political arenas and the broader public sphere.

Introducing more recent impact assessment approaches, such as health impact assessments, could also improve the quality of decision-making. To achieve a truly green transformation, energy policy increasingly needs to be deliberated in forums beyond official processes and academic conferences, so that a broader set of societal values can help support the best pathways forward.

The author acknowledges the contributions made to this commentary by Peter Hefele, Maria Francesch-Huidobro, Wei Shen, Carl Middleton and other speakers presenting at the ‘Powering up Sustainable Development for Asia’ conference in Bangkok on 24–26 January.