BayWa r.e. today released its Asia Pacific (APAC) Energy Report, titled “Asia’s Climate Goals at Risk, - the Urgent Need for Greater Accord” While the report highlights much good progress being made with the renewable energy transition, the APAC region has reached a critical point.
Headwinds and pressure in the region, such as the implications of the Russia-Ukraine war, lack of support from governments and volatile prices of energy and interest rates pose a serious risk to the pace of change and climate goals. Frustrated by inconsistent government policy, companies are taking the lead and calling for intercompany coalitions to advance sustainability goals.
BayWa r.e., a global renewable energy developer, independent power producer, service provider and distributor, today released its Asia Pacific (APAC) Energy Report, titled “Asia’s Climate Goals at Risk, - the Urgent Need for Greater Accord” While the report highlights much good progress being made with the renewable energy transition, the APAC region has reached a critical point. Headwinds and pressure in the region, such as the implications of the Russia-Ukraine war, lack of support from governments and volatile prices of energy and interest rates pose a serious risk to the pace of change and climate goals. Frustrated by inconsistent government policy, companies are taking the lead and calling for intercompany coalitions to advance sustainability goals.
The study is BayWa r.e.’s first report for the APAC region. It was conducted by Kantar, the world’s leading data, insights and consulting company and surveyed energy decision makers in Australia, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, The Philippines, and Vietnam.
“Geopolitical tensions, rising costs, and inflation continue to be opposing forces for the energy transition in the Asia Pacific region. Challenges on the road to the transition will persist, and it will be imperative for corporates and governments to come together to overcome them. The APAC Energy Report has shown that corporate leaders are motivated to gather their peers and competitors and call for more public-private partnerships to fulfill the global green agenda. We hope that with this urgent call to action, substantial progress can be seen in green energy adoption within APAC.” YangHo Bae, Managing Director, BayWa r.e. Korea.
Key Findings
Slow government implementation of renewable energy policies and unpredictable policy environments in local markets are listed within the top three barriers indicated by respondents, at 36% and 33%, respectively. For example, 59% of respondents in Southeast Asia believe that instead of pushing for green, governments in this region will increase their support for fossil fuel-based energy in the next two to three years. While for corporations in Oceania and East Asia, 47% believe that government support for fossil fuel-based energy will remain unstable in the next two to three years. Respondents in Korea listed high costs as one of the main barriers to adoption, followed by how it will affect their renewable energy goals and concern over their energy suppliers at 51%, 43% and 36%, respectively. However, large-scale commercial roof-top solar is now cheaper than even subsidized power in Southeast Asia.
While the outlook for the renewable energy transition is one of challenges and obstacles to be overcome, the urgent need for change is recognised. Close to half of the corporations surveyed have made energy transition a priority, with 48% of APAC companies aiming to increase the use of renewable energy by more than 40% over this decade. Within this group of companies, 79% are looking to achieve it in the next five years, providing cause for optimism.
Accelerating the Transition
The acknowledgement of energy transition policy barriers has resulted in corporate leaders surveyed for this report calling for greater collaboration with peers and competitors and to put pressure on governments to accelerate the transition, with two-thirds (68%) of companies that are leading the charge towards renewable energy strongly agreeing that companies should form coalitions and work together to achieve sustainability goals. The same number of respondents also indicated support for countries in APAC to work together to provide renewable energy. However, only 38% of energy decision influencers from Korea agree that companies should work together to attain their sustainable goals, the lowest sentiment across APAC.
As such, close collaboration across the countries and organizations will be required for the partnership to be successful due to the different levels of maturity in the region. Commenting on the APAC market, Sreepadaraj Karanam, VP, Sustainability & CSR, Bridgestone Asia Pacific, said, “Unfortunately, each country has completely different renewable energy policies. In some markets, the policy is not fully developed, and options are not available. Some markets are more expensive, and some are more restrictive. We can’t have a one-solution-fits-all approach, and it must be a highly flexible strategy, which is challenging.”
The report concluded that the next decade would be critical in the region’s push towards its energy transition but will be made further challenging due to a multitude of issues such as geopolitics, international conflicts, rising costs of living and inflation, even as the climate crisis worsens.
The transition from traditional energy is now critical and must happen at a much greater pace. Corporate decision-makers must take the lead in powering the change within APAC and band together, while working with and putting pressure on governments, to accelerate this process and rapidly advance renewable energy adoption.
The report by BayWa r.e. and Kantar was conducted at the end of 2022. 346 energy decision influencers at organizations with 100 or more employees in Australia, Indonesia, Japan, Malaysia, Singapore, South Korea, Thailand, The Philippines, and Vietnam were surveyed for the study. The report is part of a series of energy reports produced by BayWa r.e. The last report focused on U.S. corporate energy buyers and decision-makers in 2021. The APAC Energy Report can be downloaded here.
