Renewable Energy | Asia’s renewable energy drive: Revolution or illusion?

Asia’s renewable energy drive: Revolution or illusion?

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Ever since the COP21 agreement was reached in Paris last year, both Beijing and New Delhi have been consciously reframing their stances when it comes to energy. Over the past year, officials in both countries have proffered a series of bold statements about adopting solar and wind energy on a progressively larger scale. China’s National Development and Reform Commission recently upped the ante by proposing in its 2016-2020 five-year renewable energy plan to spend 2.5 trillion yuan (US$360 billion) on installing renewable energy infrastructure, with the aim of adding 6.8 trillion kilowatts to China’s generation capacity. Not to be outdone, a new 10-year draft report from India’s Central Electricity Authority has predicted the country would meet its COP21 targets years ahead of schedule.

The strategy is straightforward. Heading the shift in global public opinion on energy sources (with the notable exception of the United States), both China and India see market and investment opportunities in casting themselves as leaders in changing how they get their energy. Behind that veneer, however, both countries are still fully cognizant of a fundamental reality: the building block of both economies remains energy provided by coal. In China, coal power allowed the electrification of 700 million households and is the bedrock for the manufacturing industries that drive its modern economy. India, enjoying strong economic growth but still lagging far behind its northern neighbor in terms of human development, has been working for years to do the same.

Of course, the global public has mostly paid attention to the investments sprees the two countries have embarked on to boost their renewables capacities. China is now the worldwide leader in terms of wind-generated energy capacity and eclipsed the European Union as the global front-runner in 2015. India, meanwhile, is aiming for 100 GW of solar capacity installation by 2022. Time will tell whether that target is overly optimistic, considering India only passed the 8 GW mark a few months ago.

These numbers often look impressive, but installed capacity doesn’t automatically translate into usable energy and neither country is currently able to effectively deliver power from renewables where it is needed. In China, the vast distances energy needs to travel often means energy produced in one part of the country doesn’t get where it is needed. For example, despite Chinese government efforts to address the issue, roughly 34 billion kilowatt-hours of wind power went to waste in 2015.

Likewise, India’s Planning Commission predicts over US$1 trillion in investments would be required to order to adapt the country’s energy infrastructure to the “variability and uncertainty” supply created by renewables. Further complicating matters is the fact that renewable projects in India cost more than they would in developed countries, notably because of the cost of capital and variable interest rates.

The leaders of both countries are cognizant of these obstacles, and the need to prioritize poverty alleviation was a major factor informing India’s hardline stance going into last year’s climate negotiations. China and India together make up 60% of global coal production and will continue to rely on coal for decades to come. Narenda Modi’s campaign pledge to create a “shining India” depends on the ability to keep up with growing energy demand, and the combined domestic and imported coal supply play a central role in his plan to extend access to electricity to everyone in India, where hundreds of millions still lack it. The room for improvement is substantial: at present, even those Indian villages supposedly connected to the grid see many homes go without power. As coal will continue to serve as a cornerstone for the two energy markets for the foreseeable future, investing in new technologies that make coal cleaner is just as important as spending on renewables.

The Indian government is quite plainspoken on the subject. The Modi government’s energy plans, which face the dual task of alleviating widespread poverty while respecting its COP21 commitments, bet on cleaner coal plants and new emissions-capture technologies to help cut back on pollution. On December 14, Goyal announced the government was replacing dated thermal coal plants with new, energy efficient “supercritical plants” which would lower CO2 emissions. Those plants, designed to use less fuel and burn it more efficiently, should also help address the nation’s supply problems. To square the circle of coal use and emissions, officials as well as private companies are seeking out ways to make “clean coal” solutions economically viable. One of those firms, the Anglo-Indian Carbon Clean Solutions Limited (CCSL), has begun operating what it presents as the world’s first commercially viable clean coal plant and is reportedly capturing 97% of carbon emissions.

With market pressures putting the breaks on its own renewables frenzy, China is also counting on similar “ultra low emission techniques” to reconcile its need for coal power with international pledges to cut emissions and alleviate air pollution crises. Since 2008, research projects with small-scale implementation have been undertaken to retrofit existing coal plants to augment their coal-burning efficiency. If coming tests are successful, a new national benchmark will be set that could see China reduce yearly CO2 emissions by 7% from coal alone.

Obviously, none of these barriers to adopting wind or solar energy are permanent and both countries have immense long-term potential for renewable power generation. Even so, reforming power grids and adapting them for renewable energy is a costly, long-term project, and predictions of a quick and painless switch from either government should be taken with a grain of salt. Fortunately, improved coal technology could offer a practical way of bridging the gap and, in the meantime, reliably providing electricity to over a third of the global population.

Jon Connars
Jon Connars is an American investment risk analyst and researcher currently shuttling between Singapore and Bangkok with expertise in the ASEAN region. He has been featured in The Hill, The Diplomat and Asia Times.
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