There has been a step in the right direction and although much good progress being made with renewable energy transition, the Asia Pacific region (APAC) has reached a critical point.
Headwinds and pressure in the region, such as the implications of the Russia-Ukraine war, lack of support from governments and volatile prices of energy and interest rates pose a serious risk to the pace of change and climate goals. Frustrated by inconsistent government policy, companies are taking the lead and calling for intercompany coalitions to advance sustainability goals.
BayWa r.e., a global renewable energy developer, independent power producer, service provider and solar distributor, released its Asia Pacific (APAC) Energy Report, entitled “Asia’s Climate Goals at Risk – the Urgent Need for Greater Accord” on Friday (June 9), which cited “Geopolitical tensions, rising costs, and inflation continue to be opposing forces for the energy transition in the Asia Pacific region. Challenges on the road to the transition will persist, and it will be imperative for corporates and governments to come together to overcome them.
“The APAC Energy Report has shown that corporate leaders are motivated to gather their peers and competitors and call for more public-private partnerships to fulfill the global net-zero goals. We hope that with this urgent call to action, substantial progress can be seen in green energy adoption within the APAC region,” said BayWa r.e. Energy Solutions Managing Director Malaysia Niranpal Singh (pic).
Slow government implementation of renewable energy policies and unpredictable policy environments in local markets are listed within the top three barriers indicated by respondents, at 36% and 33%, respectively.
For example, 59% of respondents in Southeast Asia believe that instead of pushing for green energy, governments in this region will increase their support for fossil fuel-based energy in the next two to three years.
While for corporations in Oceania and East Asia, 47% believe that government support for fossil fuel-based energy will remain unstable in the next two to three years.
To help the transition towards green energy, 42% of APAC corporates believed that government tariffs on brown energy will support their organisation’s push towards renewable energy.
While the outlook for the renewable energy transition is one of challenges and obstacles to be overcome, the urgent need for change is recognized by APAC corporates.
Close to half of the corporations surveyed have made energy transition a priority, with 48% of APAC companies aiming to increase the use of renewable energy by more than 40% over this decade.
Within this group of companies, 79% are looking to achieve it in the next five years, providing cause for optimism.
Companies surveyed also saw the value in transitioning towards cleaner energy options, with 54% concluding that renewable energy will give companies a better image.
Half of all respondents surveyed also agreed that utilising renewable energy would give them some kind of business advantage, and another 42% suggested that green energy would give them an advantage in talent recruitment and retention at a time when large scale commercial roof-top solar has become cheaper than subsidised power in Southeast Asia, the report cited.
Accelerating the Transition
Corporate leaders surveyed for the report acknowledged the greater need for collaboration with peers and competitors and to accelerate the clean energy transition.
Two-thirds (68%) of companies that are leading the change towards renewable energy strongly agree that companies should form coalitions and work together to achieve sustainability goals.
The same number of respondents also indicated support for countries in APAC to work together to provide renewable energy.
The report concluded that the next decade would be critical in the region’s push towards its energy transition but will be made further challenging due to a multitude of issues such as geopolitics, international conflicts, rising costs of living and inflation, even as the climate crisis worsens.
The transition from traditional energy is now critical and must happen at a much greater pace. Corporate decision-makers must take the lead in powering the change within APAC and band together, while working with and putting pressure on governments, to accelerate this process and rapidly advance renewable energy adoption.
The report by BayWa r.e. and Kantar was conducted at the end of 2022. 346 energy decision influencers at organisations with 100 or more employees in Australia, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, The Philippines, and Vietnam were surveyed for the study. The report is part of a series of energy reports produced by BayWa r.e. The last report focused on U.S. corporate energy buyers and decision-makers in 2021.