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Economy

Asia leads the charge in growth of renewable energy

China and India are the key sites of growth

A panda-shaped solar plant built by Panda Green Energy Group in Shanxi Province was connected to the grid last year.   © Reuters

TOKYO -- In 2017, Asia accounted for nearly two-thirds of the worldwide increase in renewable energy generating capacity, according to a report published in April by the International Renewable Energy Agency.

As the economies of Asia develop, demand for energy is rising. Governments have focused more attention recently on renewable energy -- wind, solar, bioenergy, geothermal and hydropower -- due to concerns over security of supply, price volatility and environmental issues.

IRENA, an intergovernmental organization based in Abu Dhabi, reported that global renewable energy capacity in 2017 was 2,179 gigawatts -- greater than the capacity of world's coal powered plants, and approximately eight times Japan's entire energy generation capacity -- an increase of 8% compared with the previous year.

For Asia as a whole, including Central Asia, renewable energy capacity has nearly doubled over the past five years, reaching 918GW in 2017. China and India were the biggest contributors to the increase.

China alone accounted for nearly half the growth in worldwide renewable power generating capacity. The country now has around 36 times more solar capacity than it did five years ago. China today produces 130GW of solar power, exceeding the government's target for 2020. Its hydropower capacity has risen 36% since 2012.

People wearing masks cycle past Tiananmen Gate in smog-choked Beijing.   © Reuters

To battle air pollution, particularly from burning coal, China began offering higher prices for solar electricity in 2013. This has spurred investment in solar plants. In December last year, local media reported that the world's largest floating solar power station, with a capacity of 150 megawatts, went online in Anhui Province, west of Shanghai.

China is the undisputed leader in solar cell manufacturing. According to the Paris-based International Energy Agency, Chinese companies make up around 60% of the world's annual solar cell manufacturing.

India is also diving into renewable power. Its generating capacity rose 18% last year, the largest increase since records began in 2001. Overall, India contributed 10% to the global growth in renewable energy capacity in 2017.

The country's solar energy capacity has almost doubled since 2016, reaching 19GW. Japan's SoftBank Group aims to build renewable energy plants in India with a total capacity of 20GW. Its 350MW solar plant in the state of Andhra Pradesh, in southeastern India, began operating commercially last April.

Indian solar power producer Azure Power announced the opening of a number of solar plants in 2017, including a 130MW project in the southwestern state of Karnataka. The country's wind energy capacity also rose 15% to nearly 33GW.

The growth is largely credited to the leadership of Prime Minister Narendra Modi, who laid out a target to raise solar power capacity from just five gigawatts in 2015 to 100 gigawatts in 2022. "Nobody believed it at the time, but it now seems possible," said Yasushi Ninomiya, senior researcher at the Institute of Energy Economics, Japan.

Asia's third-largest producer of renewable energy is Japan, with a total capacity of 82GW, rising 7GW last year. Solar energy accounted for 96% of the increase.

Hydropower is driving renewable energy growth in Vietnam, Asia's fourth-largest producer, with about 18GW of capacity. The country's abundant water resources, including the Mekong River, mean hydropower accounts for around a third of Vietnam's total electricity production. Last year, the country's largest electricity company, Electricity of Vietnam Group, brought the 260MW Trung Son Hydropower Plant and the 75MW Thac Mo Hydropower Expansion Plant online.

Hydropower has been controversial for its negative impact on surrounding ecosystems. It is also vulnerable to climate change, as power generation is affected by precipitation. According to Ninomiya: "Hydropower plants are increasing in Vietnam contrary to the global trend, because they are easy to install and their energy generation is stable."

South Korea's capacity is relatively small despite its economic size. According to Nobuhiko Ishii, consultant at Mizuho Information and Research Institute, this is due to a lack of policy to stimulate the market and the absence of strong domestic suppliers to make renewable power facilities. The outlook is positive, however, with new government direction released last year to reduce the country's reliance on coal and nuclear power plants. "There are more local suppliers than before, and the country is strengthening its effort to increase renewable capacity," Ishii said.

The growth rate for renewable energy was rapid in Mongolia and Cambodia, albeit from a low base. Mongolia's renewable capacity nearly doubled last year, reaching 155MW. The country installed its first large solar power plant, with a capacity of 10MW, in Darkhan, in the north of the county, in January 2017. Its second wind farm, the 50MW Tsetsii Wind Farm, also opened in October of that year.

Mongolia struggles to provide sufficient heat and electricity to its population, especially in rural areas, and renewable energy projects are seen as a possible solution. According to Mongolia's Ministry of Energy, the country has a potential wind capacity of 1,100GW.

By category, 53% of global renewable generating capacity comes from hydropower. Wind power accounts for 24%, with solar power in third place at 18%.

Solar energy was the fastest-growing type of renewable energy last year, with capacity rising 32%. Solar power plants are relatively easy to install and to operate compared with other types of renewable energy. Solar was followed by wind energy, which rose 10% in capacity terms.

As the number and size of projects has risen, increases in solar cell production have driven costs down. According to IRENA, the levelized cost of electricity -- which compares the cost of producing electricity in different ways -- fell for photovoltaic solar cells by 73% between 2010 and 2017. Both solar and onshore wind power are now cost-competitive with fossil fuels.

As renewable power generation is often unstable, there may be more demand for ways to manage produced energy. "Managing grid and various alternatives such as hydrogen and batteries, requires high level of technology," Ninomiya said.

Growing global environmental concerns and pressure from investors has prompted multinational banks such as ING, BNP Paribas and HSBC to scale back or halt funding for coal power projects. The desire for greater energy self sufficiency in Asia, in addition to higher demand, is certain to light up the renewable energy industry for years to come.

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