Renewable energy and Asia's energy challenge

Asia’s energy outlook in 2015.

Asia’s energy context in 2015

If existing energy-consumption plans remained unchanged, that share was projected to reach 46% by 2035. Meanwhile, 600 million people in the region still needed access to energy.

Public and private organisations, together with donors including the Asian Development Bank (ADB), were addressing these challenges through several approaches, including clean and renewable energy and greater energy efficiency.

Investing in clean energy, energy saving and energy audits

After a decline linked to changes in subsidy policies in the United States and Europe and reduced support in some countries, global clean-energy investment recovered in 2014. Worldwide investment reached USD 270 billion, with 95 GW of renewable capacity installed. China led with more than USD 83 billion, Indonesia attracted over USD 1 billion, and the Philippines and Myanmar were reported at approximately USD 500 million.

These decisions came during falling oil prices. Asian countries recognised that the benefits of cheaper oil would not last indefinitely and that they needed to invest in cleaner, sustainable energy for the future. Falling technology costs were gradually reducing a major obstacle to clean-energy adoption in developing countries.

Investment in China and India

China committed to reduce CO2 emissions per unit of GDP by 40–45% by 2020 compared with 2005; this was an intensity target, not a reduction in total absolute emissions. Renewable-energy investment rose more than eightfold, from USD 10 billion in 2006 to USD 83 billion in 2014, and 2012 clean-energy investment exceeded that of the United States.

In India, described at the time as the world's seventh-largest economy, policymakers were directing investment towards the country's abundant solar potential. A 100 MW solar plant in Rajasthan, supported financially by ADB and described as Asia's largest at that time, had begun operating in May. India's solar capacity grew from 161 MW in 2010 to 3.7 GW in March 2015, while investment increased from USD 4.7 billion in 2006 to USD 7.4 billion in 2014.

ADB’s role

ADB clean-energy investment exceeded USD 2 billion a year during 2011-2014, reaching a then-record USD 2.4 billion in 2014; almost one third supported private projects. Approved climate finance averaged USD 3 billion a year, with roughly 75% for mitigation and 25% for adaptation. Energy projects also needed climate resilience: hydropower had to anticipate changing water flows, electricity poles had to withstand strong winds, and wiring systems had to address flood exposure.

Improving energy efficiency through energy saving and audits

Energy efficiency is an important way to reduce demand. ADB research suggested that investing 1-4% of total energy-sector spending in efficiency measures could reduce projected energy demand in developing Asian countries by up to 25%.

ADB energy-efficiency investment reached USD 900 million in 2014. Projects supported by the Energy Efficiency Initiative during 2010–2013 achieved annual energy savings equivalent to 3 GWh. The figures relate to the 2010–2014 programme period.

The measures aimed to help regional economies respond to climate change while supporting energy security and sustainable development. The December 2015 Paris climate summit was seen as an opportunity to assess Asia-Pacific preparations.

Source: compiled material.

ADB: 2014 clean-energy investments

UNFCCC: China’s 2020 carbon-intensity target