The global clean energy sector continued its breakneck development with a record US$329 billion of new investments last year, and Asia Pacific claims a large part of this, according to a new report by professional services firm EY.
The London-headquartered consultancy’s Renewable Energy Country Attractiveness Index 2016 report, released in February indicated that Asia Pacific secured almost US$180 million in clean energy investments last year - more than half of the global total.
China topped the index with US$110.5 billion in investments, followed by the United States, Japan, the United Kingdom and India.
However, it would appear that the growing energy demand in Asia-Pacific threatens to outpace improvements in efficiency and renewable energy use in the region. This could result in the region being unsustainably reliant on fossil fuels, according to a new regional energy report, APEC Energy Demand and Supply Outlook, by Asia-Pacific Energy Research Centre.
The report forecasts a 35% jump in energy consumption in the region by 2040, driven by continued poverty reduction and growth of the middle class in emerging APEC economies. The report highlights the fact that 80% of demand will still be met by fossil fuels, led by coal, based on current trends.
Under this scenario, more than 10% of energy reserves within the 21 APEC economies, the world’s largest energy producers and consumers, will need to be imported from outside APEC by 2040—even with the development of unconventional gas resources. It would also increase the region’s carbon emissions by about a quarter.
“APEC economies are aggressively working to transform the region’s energy paradigm by facilitating greater diversification of their energy mix and higher efficiency standards,” explained Dr Phyllis Yoshida, Chair of the APEC Energy Working Group, which administers regional policy and research collaboration within the sector.
Doubling APEC’s renewables
Yoshida says that there is an aim to double renewable energy by 2030 in APEC economies. The area will also work towards reducing their energy intensity 45% by 2035, and are laying a policy foundation to achieve these ambitious goals. “The growth and sustainability of our diverse economies will greatly depend on the success of this effort.”
Doubling renewable energy in APEC will require 1,692GW of additional renewable generation capacity or an average of 100GW annually, the report estimates. Lower barriers to innovation within the sector are needed to accelerate the establishment of secure and environmentally friendly energy systems that can help to deliver, it adds.
Creating sustainable solutions for APEC
Towards these ends, officials have introduced a new network for city executives to share intelligence on efficiency and renewable energy policy development and adoption, drawing on pilot measures being pursued in a growing number of APEC Low Carbon Model Towns. A parallel service network of companies and research bodies within the sector has also been created to provide implementation support for city-level energy sustainability initiatives.
“A cross-section of cities in the region are serving as a testing ground for green development, guided by industry reform and urban planning recommendations from APEC experts, Yoshida concluded. “Early analyses reveal that inroads are being made but must be sustained and built upon if energy security and deep cuts in emissions are to be realized in the Asia-Pacific in the years ahead.”