Nov-06
Renewable energy growing fast but still losing share in Asia

Energy demand across Asia is set to more than double in the next 25 years, and US$6 trillion in investment will be needed to meet this demand. Of this, only US$62 billion is expected to be invested in renewable energy. Our latest analysis predicts that while renewable energy sources will be developed rapidly acrosss Asia, they will not supplant fossil fuels as the main form of power, for reasons of cost, technology and lack of government incentives.

New demand for electricity will increasingly be met by coal fired stations as coal undisputedly stands as the cheapest form of power generation, although it carries a considerable environmental impact.

Renewable energy currently makes up 20% of Asia's energy mix, but this is expected to drop to 15% by 2030. Further technology advances will be required to bring down the cost of all forms of renewable energy to allow it to compete with fossil power, and to overcome the fact that neither wind nor solar energy can provide constant reliable power. Moreover, the energy produced cannot be stored effectively for future use and governments do not yet provide sufficient incentives to force suppliers to go green.

Currently, the major renewable sectors in Asia are large hydro stations and biomass (ie. organic matter) used for cooking fires. The mix is expected to change dramatically with a limit on new large hydro developments because of damage caused by the flooding necessary to create reservoirs, and a fall in biomass for domestic use as more rural communities are connected to electricity grids, off-grid solar or small hydro facilities. A substantial uptake in biofuels such as ethanol and biodeisel in vehicles will drive growth in the overall bio segment, but the biggest annual growth rates - of up to 5,000% - are expected in wind generation, lead by China's plans to increase its current installed 800 MW capacity to 20 GW by 2020.

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Fusion Consulting is a business intelligence consultancy providing strategic advice on Asia-Pacific markets. With offices in Shanghai, Singapore and Hong Kong, and a network of 400 freelance industry consultants in 16 countries, the company conducts custom research and consulting to help clients understand their markets, compete more effectively and grow into new areas of opportunity. www.fusionc.com

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