Green Energy Will Help Meet Asia’s Growing Energy Demands
30 March 2021 – by Eric Koons
It is difficult to deny the statistics. Population growth has had a monumental effect on energy demand in Asia. There has been a doubling of overall energy consumption over the past 20 years in Southeast Asia. At the current rate, that trend will continue climbing at staggering speeds. Despite the massive amount of energy consumed, 65 million people within Southeast Asia lack access to reliable electricity, facing shut-offs in personal homes and entire cities.
Part of the reason is due to the flaws of fossil fuel energy. In fact, fossil fuel energy deficiencies are beginning to compound for countries such as Vietnam, Japan, Indonesia, China, and South Korea. The region is ready for a shift in energy dependency and understanding the economics behind this green energy transition is essential.
Green Energy as the Solution
Over the last 10 years the population in Asia has increased at an average rate of 1% per year. While this doesn’t seem like much, it is an increase of 40 million people, making Asia account for 60% of the world’s total population. Energy demand and consumption has increased along with population growth and our current production and transmission networks are struggling to keep up.
This is an opportunity for energy providers, especially green energy projects. If they shift to renewable sourcing, then energy can become more affordable to consumers and less expensive to producers, increasing long-term profits. Reliable, affordable energy helps stimulate local economies with increased productivity and higher standard of living.
Case studies of Green energy benefits for Asia
Many case studies have highlighted the economic benefits of a transition from fossil fuels to green energy. Three recent projects are solar rooftops in Vietnam, an offshore wind farm in Japan, and a massive wind energy deal in South Korea. These three case studies explain the economic incentives to renewable energy in Southeast Asia, highlighting why there are more than just “environmental” benefits to the investment.
Green energy projects in Asia
Vietnam: Solar Rooftops
2020 was a successful year for solar PV rooftop installations in Vietnam. By the final weeks of the year, the total installed capacity was more than 9 GWp. That accounted for a growth of 2,435% since 2019. The driving force behind this mass installation was Vietnam’s second Feed-In Tariff (FIT2). FIT2 provides new solar installations a fixed rate of USD $0.0838 per kWh of energy produced for the next 20 years, which is a large financial incentive for investors.
Additionally, by developing a long-term plan for solar power, Vietnam can focus on exporting coal instead of using it. Currently, they are the 13th largest coal source on the globe. Through this green energy transition, the country has seen immediate economic improvement and more corporate financial freedom.
Japan: Offshore Wind Power
Renewable energy is more than just beneficial for the environment; it is enriching for a country’s economy and culture too. Japan’s recent jump into the Akita wind farm project is a prime example of this. The country is on the verge of gaining energy independence.
The ¥100-billion project will provide adequate electricity for 150,000 of the 52 million homes in Japan. This is a vital step in the even larger sphere of economic growth. It is projected that the country could create a “wind farming” system that produces 9x what it needs within a year. The opportunities that grow from massive energy production are the kind that a technologically advanced nation can thrive from.
South Korea: Wind Energy Deal
Recently the South Korean government announced plans to construct the world’s largest offshore wind farm. It is currently slated for completion by 2030. This massive project has two main goals:
- Act on the objectives outlined in South Korea’s Green New Deal
- Stimulate the local economy with job growth and energy independence
South Korea has realized that relying on imported energy is expensive. They are subject to higher premiums, transportation fees, and taxes. Additionally, it sends money outside of the country. The development of internal green energy projects, like this one, will help South Korea promote national economic development.
The same valuable reasons that led South Korea to make this green energy investment are true for other nations.
The Global Green Energy Future
These three initiatives are valuable and noteworthy, but they are only fragments of the larger solution. As a global economy we need stability in our energy systems or economic growth will be hindered. Some of the primary economic benefits of the transition from fossil fuels to green energy include:
- The creation of local jobs
- Reduction in healthcare costs
- The potential (in the long-run) of selling excess energy.
- Reduced long-term costs and international reliance on imported energy
The green energy investments outlined here are the beginning steps into our global future. It is essential to remind oneself that fossil fuels are a non-renewable resource, meaning they will eventually run out. This is not a sustainable energy source for the global environment nor a local economy.
For more insights on the economic benefits of renewable energy, check this article.