ASIA
26 March 2014
Asia: give renewable energy a chance!
Asia's very rich renewable energy resources like solar, wind and geothermal have the potential to help the region meet its energy challenge in the Asian Century.
As we look ahead further into this Asian Century, perhaps the greatest challenge facing Asia is accessing clean, safe, affordable and secure sources of energy. But Asia's very rich renewable energy resources like solar, wind and geothermal have the potential to help the region meet this challenge.
In the coming decades, Asia has the potential to continue its spectacular development by continuing on its catchup path to the West. For example, the Asian Development Bank (ADB) estimates that Asia's share of global GDP could rise from 28% in 2010 to some 44% in 2035. And since Asia has around 60% of the world's population, the region's catchup process is set to continue beyond this date.
But lots of energy will be necessary to fuel this "Asian Century", as energy demand tends to grow in tandem with the economy, even if improvements in energy efficiency can moderate that linkage. In this regard, some 700 million people in Asia still have no access to modern electricity, and will need to be serviced as their incomes grow and they are lifted out of poverty.
Already in 2010, Asia accounted for 34% of world energy consumption. But renewable energy accounted for less than one-sixth of this, almost half its share in 1990. Over this twenty year period, we saw large increases in the use of all other energy sources, namely hydroelectricity, nuclear, natural gas, oil and coal. By 2010, coal accounted for one-half of Asia's energy use, and oil for one-quarter. (While hydroelectricity is often considered a renewable energy, all too often it is an unsatisfactory form of energy, as it can destroy the natural environment, displace local communities, and have adverse effects on downstream water users, including in neighboring countries.)
The ADB estimates that continued economic growth could lift Asia's share of energy consumption to around 50% of global consumption by 2035. But the ADB projects a further decline in the relative contribution of renewable energy, whose share could drop to one-tenth by 2035. Coal, oil, and natural gas would remain more important energy sources than renewables. And while nuclear would remain less important than renewables, it is set to grow much more quickly.
Let's examine in more detail Asia's renewable energy situation, in order to understand this pessimistic scenario for renewable energy. While renewable energy may account for about one-sixth of Asia's current sources of energy, almost all of this is in the form of biofuels, namely, wood, charcoal and agro-residues, which are used by poor people in rural areas.
A few country examples serve to highlight the point. In 2009, 12% of China’s total energy supply came from renewables, 27% for India, 35% for Indonesia, 6% for Malaysia, 44% for the Philippines, less than 1% for Korea, and 3% for Japan. In none of these cases is the combined share of solar and wind above 1%. For most countries, biofuels dominate.
Geothermal energy is a particularly interesting case. In Indonesia and the Philippines, the shares of geothermal are 8% and 23%. But in Japan, the land of the famous "onsen", geothermal only accounts for 1% in Japan.
Overall, the share of Asian energy coming from solar, wind and geothermal is miniscule. And as urbanization proceeds and incomes grow, the use of traditional biofuels will decline.
However, the main reason that the ADB and many other analysts do not see a major role for renewable energy in the coming decades in Asia is its "uncompetitive costs". But this view is based on a narrow and incomplete assessment of the costs of fossil fuels and nuclear energy.
Fossil fuels, especially coal, have disastrous effects on the environment and human health. For example, the air in many Asian cities is severely polluted, with terrible consequences on the health of their citizens. Recent studies suggest that Beijing residents are losing 5 years of their life due to air pollution.
Global warming is another consequence of fossil fuels. And while this is a global problem, whose origin lies in two centuries of Western industrialization, Asian countries will suffer the adverse consequences of climate change more than other regions of the world. The vast majority of the world’s cities exposed to rising sea levels are in Asia. Thus, Asian countries have a keen interest in reducing carbon emissions, especially China which is now the world's largest carbon emitter.
Another challenge for Asia's energy future is that of energy security. The only energy source that Asia has in abundant supply is coal. And its dependence on importing oil and gas from the politically unpredictable Middle East and Russia will only grow with time. And even if imported energy supplies were secure, they are costly, and will likely become even more costly over time.
Lastly, there are the manifold risks and costs of nuclear energy, like waste management, proliferation and, as highlighted by the case of Fukushima, safety. This has provoked great public opposition to nuclear by the Japanese public.
Most importantly, there are many emerging examples in Asia which demonstrate the immense potential of renewable energies.
China has made massive efforts in developing renewable energy, and now leads the world in installed capacity and is increasing its overseas investments in renewable energy. China now ranks first in the world in terms of installed wind power, and as of 2010, China has become the world's largest maker of wind turbines, surpassing Denmark, Germany, Spain, and the United States. Wind power has been rapidly expanding in India and Mongolia.
Six countries in Asia and the Pacific have over 100 MW of grid-connected photovoltaic solar systems: China with 7,000 MW, Japan 6,914 MW, Australia 2,200 MW, India 1,461 MW, Korea 963 MW, and Thailand 360 MW. China is also the world's leading manufacturer of solar photovoltaic cells with a 30% global market share.
China's development of renewable energy has been strongly supported by the government, demonstrating the importance of public leadership. And while the industry has been predictably experiencing growing pains, governmental support must increase as it tries to tackle the adverse environmental consequences of its dramatic growth path.
Following the Fukushima nuclear disaster, Japan has the opportunity to chart a new future, one based on renewable energy, and shift away from fossil fuels and nuclear energy which have been the country's principal energy sources. As an island country, Japan has numerous coastal regions where off-shore wind engines could be installed and supply factories as well as whole towns with energy. With its important solar radiation and large surface of (until now) uncovered rooftops, photovoltaics could easily be installed and produce an important amount of energy for individual households. As Japan is very densely populated, its waste could be converted into biofuel/agrofuel and used to produce electricity.
Most importantly, Japan has immense geothermal potential which could be easily exploited and converted into electricity, once infrastructure is installed. Geothermal energy currently accounts for only 1% of total energy production, but has the capacity to meet 10% of Japan's electricity needs. The Philippines is another country with great geothermal potential. Its installed capacity is second only to the US, and plans to expand geothermal capacity by 75% by 2027.
With much of Japanese public opinion now firmly against nuclear energy, the Japanese government should make more decisive steps to develop renewable energy. Unfortunately, the new Abe government seems to be more responsive to lobbying from Japan's nuclear industry. One reason is that industry fears that if Japan abandons nuclear energy, it will be difficult to export nuclear energy to Asia's emerging economies. Indeed, nuclear companies from Japan, Korea, Russia, and the US are pushing developing countries in Asia to develop nuclear energy, with financing from their foreign aid and/export credit agencies.
For its part, Korea has been pathbreaking in adopting a "Green Growth Strategy" in 2009. But most regrettably, this Strategy is placing more emphasis on nuclear than renewable energy. Nuclear power plants produce one-third of Korea's electricity through 23 facilities, and there are plans to build nine more over the next decade, seemingly undeterred by Japan's Fukushima problems. Efforts to expand renewable energy, like the solar panels on the rooftop of Seoul's City Hall, seem like symbolic drops in the ocean.
The case of Korea, like Japan, highlights the governance challenges of nuclear energy. Over the past year, three reactors were reportedly taken off line after faked safety certificates were discovered. Some government official were fired or jailed for accepting bribes from parts suppliers. Corruption, cover-ups and incompetence in the nuclear industry, especially in Japan, are the heart of citizen mistrust of this technology.
Overall, renewable energy is still very much on a learning curve. But the manifest problems of fossil fuels and nuclear energy mean that Asian countries and their governments must drive that learning curve as hard and fast as possible -- because over time, the potential of renewables will only grow.
Pushing up renewable usage accelerates the learning process, increases scale and starts to bring down costs. Greater R&D efforts will spur more innovation. Asia also has much to learn from countries like Germany and Denmark which successfully exploit renewable energy, as well as the accumulated expertise of the United Nations, World Bank and Asian Development Bank. And as fossil fuel prices will rise in the future, the relative attractiveness of renewables will only improve.
Successfully navigating and managing Asia’s energy future is critical for Asia’s future, and especially critical to the future of the planet. And there is no doubt that renewable energy must play a leading role in providing Asia with clean, safe, affordable and secure sources of energy. Governments from developing Asia must resist the "easy option" of buying nuclear with soft financing Japanese, Korea and other governments.
"Give renewable energy a chance" must become the new mantra of the Asian Century!
Executive Director
Asian Century Institute
www.asiancenturyinstitute.com
In the coming decades, Asia has the potential to continue its spectacular development by continuing on its catchup path to the West. For example, the Asian Development Bank (ADB) estimates that Asia's share of global GDP could rise from 28% in 2010 to some 44% in 2035. And since Asia has around 60% of the world's population, the region's catchup process is set to continue beyond this date.
But lots of energy will be necessary to fuel this "Asian Century", as energy demand tends to grow in tandem with the economy, even if improvements in energy efficiency can moderate that linkage. In this regard, some 700 million people in Asia still have no access to modern electricity, and will need to be serviced as their incomes grow and they are lifted out of poverty.
Already in 2010, Asia accounted for 34% of world energy consumption. But renewable energy accounted for less than one-sixth of this, almost half its share in 1990. Over this twenty year period, we saw large increases in the use of all other energy sources, namely hydroelectricity, nuclear, natural gas, oil and coal. By 2010, coal accounted for one-half of Asia's energy use, and oil for one-quarter. (While hydroelectricity is often considered a renewable energy, all too often it is an unsatisfactory form of energy, as it can destroy the natural environment, displace local communities, and have adverse effects on downstream water users, including in neighboring countries.)
The ADB estimates that continued economic growth could lift Asia's share of energy consumption to around 50% of global consumption by 2035. But the ADB projects a further decline in the relative contribution of renewable energy, whose share could drop to one-tenth by 2035. Coal, oil, and natural gas would remain more important energy sources than renewables. And while nuclear would remain less important than renewables, it is set to grow much more quickly.
Let's examine in more detail Asia's renewable energy situation, in order to understand this pessimistic scenario for renewable energy. While renewable energy may account for about one-sixth of Asia's current sources of energy, almost all of this is in the form of biofuels, namely, wood, charcoal and agro-residues, which are used by poor people in rural areas.
A few country examples serve to highlight the point. In 2009, 12% of China’s total energy supply came from renewables, 27% for India, 35% for Indonesia, 6% for Malaysia, 44% for the Philippines, less than 1% for Korea, and 3% for Japan. In none of these cases is the combined share of solar and wind above 1%. For most countries, biofuels dominate.
Geothermal energy is a particularly interesting case. In Indonesia and the Philippines, the shares of geothermal are 8% and 23%. But in Japan, the land of the famous "onsen", geothermal only accounts for 1% in Japan.
Overall, the share of Asian energy coming from solar, wind and geothermal is miniscule. And as urbanization proceeds and incomes grow, the use of traditional biofuels will decline.
However, the main reason that the ADB and many other analysts do not see a major role for renewable energy in the coming decades in Asia is its "uncompetitive costs". But this view is based on a narrow and incomplete assessment of the costs of fossil fuels and nuclear energy.
Fossil fuels, especially coal, have disastrous effects on the environment and human health. For example, the air in many Asian cities is severely polluted, with terrible consequences on the health of their citizens. Recent studies suggest that Beijing residents are losing 5 years of their life due to air pollution.
Global warming is another consequence of fossil fuels. And while this is a global problem, whose origin lies in two centuries of Western industrialization, Asian countries will suffer the adverse consequences of climate change more than other regions of the world. The vast majority of the world’s cities exposed to rising sea levels are in Asia. Thus, Asian countries have a keen interest in reducing carbon emissions, especially China which is now the world's largest carbon emitter.
Another challenge for Asia's energy future is that of energy security. The only energy source that Asia has in abundant supply is coal. And its dependence on importing oil and gas from the politically unpredictable Middle East and Russia will only grow with time. And even if imported energy supplies were secure, they are costly, and will likely become even more costly over time.
Lastly, there are the manifold risks and costs of nuclear energy, like waste management, proliferation and, as highlighted by the case of Fukushima, safety. This has provoked great public opposition to nuclear by the Japanese public.
Most importantly, there are many emerging examples in Asia which demonstrate the immense potential of renewable energies.
China has made massive efforts in developing renewable energy, and now leads the world in installed capacity and is increasing its overseas investments in renewable energy. China now ranks first in the world in terms of installed wind power, and as of 2010, China has become the world's largest maker of wind turbines, surpassing Denmark, Germany, Spain, and the United States. Wind power has been rapidly expanding in India and Mongolia.
Six countries in Asia and the Pacific have over 100 MW of grid-connected photovoltaic solar systems: China with 7,000 MW, Japan 6,914 MW, Australia 2,200 MW, India 1,461 MW, Korea 963 MW, and Thailand 360 MW. China is also the world's leading manufacturer of solar photovoltaic cells with a 30% global market share.
China's development of renewable energy has been strongly supported by the government, demonstrating the importance of public leadership. And while the industry has been predictably experiencing growing pains, governmental support must increase as it tries to tackle the adverse environmental consequences of its dramatic growth path.
Following the Fukushima nuclear disaster, Japan has the opportunity to chart a new future, one based on renewable energy, and shift away from fossil fuels and nuclear energy which have been the country's principal energy sources. As an island country, Japan has numerous coastal regions where off-shore wind engines could be installed and supply factories as well as whole towns with energy. With its important solar radiation and large surface of (until now) uncovered rooftops, photovoltaics could easily be installed and produce an important amount of energy for individual households. As Japan is very densely populated, its waste could be converted into biofuel/agrofuel and used to produce electricity.
Most importantly, Japan has immense geothermal potential which could be easily exploited and converted into electricity, once infrastructure is installed. Geothermal energy currently accounts for only 1% of total energy production, but has the capacity to meet 10% of Japan's electricity needs. The Philippines is another country with great geothermal potential. Its installed capacity is second only to the US, and plans to expand geothermal capacity by 75% by 2027.
With much of Japanese public opinion now firmly against nuclear energy, the Japanese government should make more decisive steps to develop renewable energy. Unfortunately, the new Abe government seems to be more responsive to lobbying from Japan's nuclear industry. One reason is that industry fears that if Japan abandons nuclear energy, it will be difficult to export nuclear energy to Asia's emerging economies. Indeed, nuclear companies from Japan, Korea, Russia, and the US are pushing developing countries in Asia to develop nuclear energy, with financing from their foreign aid and/export credit agencies.
For its part, Korea has been pathbreaking in adopting a "Green Growth Strategy" in 2009. But most regrettably, this Strategy is placing more emphasis on nuclear than renewable energy. Nuclear power plants produce one-third of Korea's electricity through 23 facilities, and there are plans to build nine more over the next decade, seemingly undeterred by Japan's Fukushima problems. Efforts to expand renewable energy, like the solar panels on the rooftop of Seoul's City Hall, seem like symbolic drops in the ocean.
The case of Korea, like Japan, highlights the governance challenges of nuclear energy. Over the past year, three reactors were reportedly taken off line after faked safety certificates were discovered. Some government official were fired or jailed for accepting bribes from parts suppliers. Corruption, cover-ups and incompetence in the nuclear industry, especially in Japan, are the heart of citizen mistrust of this technology.
Overall, renewable energy is still very much on a learning curve. But the manifest problems of fossil fuels and nuclear energy mean that Asian countries and their governments must drive that learning curve as hard and fast as possible -- because over time, the potential of renewables will only grow.
Pushing up renewable usage accelerates the learning process, increases scale and starts to bring down costs. Greater R&D efforts will spur more innovation. Asia also has much to learn from countries like Germany and Denmark which successfully exploit renewable energy, as well as the accumulated expertise of the United Nations, World Bank and Asian Development Bank. And as fossil fuel prices will rise in the future, the relative attractiveness of renewables will only improve.
Successfully navigating and managing Asia’s energy future is critical for Asia’s future, and especially critical to the future of the planet. And there is no doubt that renewable energy must play a leading role in providing Asia with clean, safe, affordable and secure sources of energy. Governments from developing Asia must resist the "easy option" of buying nuclear with soft financing Japanese, Korea and other governments.
"Give renewable energy a chance" must become the new mantra of the Asian Century!
Author
John WestExecutive Director
Asian Century Institute
www.asiancenturyinstitute.com