Electric power companies in Asia are witnessing a growth spurt due to investor focus on renewable energy
In a significant move towards climate action, power companies across Asia are committing to growing their low-carbon solutions and transitioning quickly to renewable energy sources. This shift is driven by the need to remain competitive and avoid stranding their fossil fuel assets.
Leading the Way in Renewable Energy Transition
China's major electricity providers, supported by strong government policies, have aggressively expanded solar power, making them global leaders in renewable energy transition. With over 1 TW of photovoltaic capacity installed and a rapid scale-up of solar parks, grid infrastructure, and storage, they are setting an example for the rest of the world.
Taiwan's energy companies are also pioneering innovative renewable technologies. Partnerships such as SkySails Power and AiSails Power are driving new scalable renewable projects, despite political and energy security challenges related to fossil fuel imports and nuclear phase-out.
Japan’s electricity sector is advancing climate action seriously. Adopting osmotic power generation alongside traditional renewables, Japan positions itself as a green technology innovator, potentially influencing broader Asian transition efforts.
Transition Plans of Key Players
CLP in Hong Kong has aligned the performance measures and remuneration of their executive directors and senior management with science-based greenhouse gas emissions reduction targets and the phase-out of coal-based assets. Chubu Electric, another Japanese player, has committed to shutting down all inefficient coal-fired power plants by 2030 and expanding its renewables capacity, starting the full-scale operation of ammonia co-firing technologies in the 2030s.
Japan's J-POWER plans to decommission coal-fired power plants by 2030, while J-POWER also aims to reduce 46% of CO2 emissions from 2013 levels. Malaysia's state-owned utility, Tenaga Nasional Berhad (TNB), has announced a decarbonisation plan spanning its entire value chain, with a focus on decarbonising energy sources. TNB is also enhancing its transmission grid to support Malaysia's goal of having 70% renewable energy in its power mix by 2050.
Collaboration and Investor Engagement
Collaboration between stakeholders is crucial to turn cautiously positive signs into a success story for Asia's leadership in the global fight against climate change. A program connecting investors to Asia's systemically important electric utility companies is in its fourth year, providing unique and invaluable insights into these power companies.
Over the past three years, 20 highly influential regional investors with $11trn in assets have agreed on a set of climate-related expectations for electric utility companies. The Asian Utilities Engagement Program includes participation by some investors that are acting on behalf of their clients with the goal of achieving net-zero alignment.
Challenges Ahead
While progress is being made, more ambitious climate action is needed in Asia to ensure a just and equitable transition to renewable energy sources. The boom in artificial intelligence and data centres has led to unprecedented energy demand, and Asia's energy demand, particularly in tech-based economies, is accelerating rapidly.
The journey to a net-zero future in Asia is far from over, and much more at scale and speed needs to be achieved. Continued investor engagement, strong government policies, and corporate leadership are essential to accelerate the transition to renewable energy sources in Asia.
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