Sustainable, diversified energy solutions are essential to securing Asia's energy future-- but will need "robust national policies" to push through reforms and encourage private investment, said experts at the Asia Future Energy Forum's business leaders panel during SIEW 2012.
The panel focused its attention on "Implementing Sustainable Energy Solutions in Asia--Diversifying the Energy Mix". Acknowledging that economic growth is moving from Europe and North America to emerging economies, primarily those in Asia, this energy pathway is inevitable, pointed out Mark Fogarty, Chairman of Southeast Asia & Pacific Advisory Committee for the Renewable Energy and Energy Efficiency Partnership (REEEP) Australia.
Further changes in the global economic structure--notably the world's population reaching 8 billion people by 2025--will put more pressure on scarce resources. Fogarty emphasised that just 10 years from now, 90 percent of the growth in energy demand will come from developing countries, especially from Asia.
In this case creating a sustainable energy foundation is crucial for the economy, as well as for the environment. Many Asian countries have already initiated national programmes to address this issue. For example, China has in place an energy efficiency programme and recently adopted a renewable energy law. Although "playing a catch-up game", ASEAN nations are also showing progress in this respect, Fogarty said.
He said the challenge is to formulate robust and stable national policies which will encourage private investment and will allow energy reform.
India is on the right path to overcome this challenge, said Mr Swami Venkataraman, Director of the Project and Export Finance Group of the Standard Chartered Bank in India. He said the Indian government has designed a comprehensive regulatory framework that allows private capital and encourages growth of renewable technologies.
For example, by fostering competition, India's National Solar Missions' reverse auction has exploited market forces, while ensuring competitive prices for consumers. Furthermore, the government has addressed the financing constraints--mainly the result of an absence of a well-functioning renewable energy credit market--faced by most projects in the renewable energy field. In support of investors, 10-15 percent of a project cost is provided by the government in the form of a capital grant.
He said the key drivers behind this change are risk, social acceptance and cost, ie following the Fukushima accident, the world is looking for cleaner, less-risky and reliable energy alternatives. Social acceptance of nuclear energy has declined significantly since the accident, and the gap between the cost of conventional energy and renewable energy is about to close.
By :Maria Cacenschi, University of Vienna, Austria