ASEAN’s 2020 newly installed renewables capacity less than 50% of 2019
ADB renewables lending at $2 bil in 2020, about 50% more than 2019
Global share of renewables rose to 28% from 26% in 2020: IEEJ
New York —
Emerging Asia’s clean energy projects are gradually crawling back to normalcy after delays caused by COVID-19-related lockdowns and movement restrictions, and as governments diverted their attention and spending towards economic relief measures and battling the virus.
The pace of recovery is slow and COVID-19 has impacted both economic and energy demand growth, while many countries missed their renewable energy targets for 2020 and energy companies reassessed capital expenditure amid the turmoil.
Renewable energy project delays began in the first quarter of 2020 due to supply chain disruptions and travel restrictions affecting equipment manufacturers and the workforce, such as solar projects in the Philippines and biomass in Malaysia, Beni Suryadi, manager of power, fossil fuel, alternative energy and storage at ASEAN Centre for Energy, said.
He said the impact worsened in the second quarter as ASEAN energy demand plummeted with a domino effect on renewables — demand for commercial solar panels fell nearly 70% in March-April in Indonesia due to cutbacks on non-essential spending and in Vietnam wind projects missed government deadlines.
“Some hydropower projects were halted across ASEAN like in the Mekong region and also the Batang Toru hydropower plant in Indonesia. In August, the supply chain had yet to recover, leaving electric vehicle supply kneecapped in Thailand,” Suryadi said.
He said in 2020, according to records kept by the ASEAN Centre for Energy, the capacity for newly installed renewables was less than 50% compared with 2019.
SLOW PATH TO RECOVERY
By the fourth quarter of 2020, signs of recovery had emerged as longer-term investments were driven by more strategic concerns.
In India, several rounds of solar project auctions went ahead, and delivered record low prices, Zhai Yongping, the Asian Development Bank’s chief of energy sector group, said.
“For ADB, our lending in the energy sector amounted to $4.2 billion in 2020, of which about $2 billion was in renewable energy and energy efficiency (about 50% higher than in 2019),” he said, adding that the rest was in power transmission and distribution to better integrate renewables in the network.
“ADB foresees Asia’s economy will rebound up to 6.8% in 2021, so there is a momentum for renewable energy investment,” Zhai said.
Countries that recovered first from the pandemic did well, with China surpassing its 2019 onshore wind installed capacity by over 50% by the end of 2020, Margaret Jackson, deputy director for climate and advanced energy at the Atlantic Council, said.
She said renewable energy growth in Asia will recover in 2021 as governments have set ambitious climate targets for the next five years and will need to start steering investment into electrification and renewable energy expansion.
Clean energy will compete for funds diverted to public health and near-term economic stability, she said, adding that financial institutions like the ADB were reviewing fossil fuel investment strategies in favor of funneling more money into clean energy.
Despite some slowdown in construction, global renewable energy power generation capacity, particularly solar and wind, continued to increase annually by around 8% in 2020, which is comparable to the growth rate in 2019, the largest in history, Masakazu Toyoda, chairman & chief executive officer at The Institute of Energy Economics Japan, said.
Toyoda said while total power generation declined in the world in 2020 compared with the previous year, the share of renewable energy increased from 26% to 28%, including 16% of hydro.
SOUTHEAST ASIA RECOVERY
Vietnam’s continued solar revolution and Myanmar’s solar auction, among others, defined the resilience of the renewables sector in 2020, ACE’s Suryadi said, adding that in many cases policy action for renewables has become an integral part of the pandemic response as it adds jobs and boosts economic activity.
There is “high optimism” that the sector will rebound faster in 2021 as renewables are seen as key to a green recovery and strategies include green stimulus packages to boost investment, easier credit and improving cost competitiveness versus fossil fuels, he said.
The 38th ASEAN Ministers on Energy Meeting held on Nov. 19, 2020, said in its updated blueprint of the ASEAN Plan of Action for Energy Cooperation that the share of renewables in the energy mix will be raised to 23% by 2025, partly by raising renewables-based installed power capacity to 35% by 2025.
This translates to 80-100 GW of additional renewable energy from today to 2025, Suryadi said.
Key renewable energy announcements in recent months –
**Malaysia’s $2.9 billion energy spending plan as part of its pandemic economic response, including rooftop solar, LED street lighting, and inviting investments for 1,400 MW of solar projects
**Thailand’s 30 billion baht investment in “Energy for All”
**Indonesia’s “Solar Archipelago” — a rooftop solar program creating 22,000 jobs
**Vietnam’s renewable energy spending plan over 10 years
**Philippines tweaks foreign shareholding rules to incentivize renewable investment