The power generation sector in the Asia Pacific region could attract $1.5 trillion in investments over the decade ending 2030, according to global energy consultancy firm Wood Mackenzie's statement on Tuesday.
Wood Mackenzie said that renewables investments have overtaken fossil fuel since 2013, with solar and wind representing 66% or US$1 trillion investment opportunity in the Asia Pacific up to 2030, while fossil fuels, mainly coal and gas, make up the remaining $500 billion.
Wood Mackenzie鈥檚 senior analyst Rishab Shrestha said that 鈥渢raditionally, energy security and availability of low-cost coal are key drivers of coal investment in Asia. However, investment sentiment towards coal is waning as economies strive for a more sustainable and greener future.鈥�
According to Shrestha, gas/coal investment would be split at 40/60 over the next decade. He confirmed that the share of coal is falling to the extent that after 2030 gas will contribute 70%, with coal falling to a 30% share.
鈥淐oal investment will fall from its peak of US$57 billion in 2013 to US$18 billion by the end of the decade.鈥�
Wood Mackenzie said the region is also expected to add over 170 gigawatts (GW) of new power capacity annually in the next decade with the pace of additions accelerating beyond 2030.
鈥淲e should see a slight slow-down in capacity additions in the next five years due to coronavirus related sluggish demand. This should pick up from 2026 onwards,鈥� Shrestha said.
Wood Mackenzie鈥檚 research director Alex Whitworth, however, warned about increasing headwinds and risks for renewables investments.
He said the Asia Pacific region has entered a transition decade where wind and solar investment is expected to decline by 20% by 2025 from its peak in 2017.
鈥淕enerous government subsidies during the high-cost renewable era were key drivers of the previous growth period,鈥� he explained.
鈥淚n the next five years subsidies are being cut, grid constraints are increasing, and renewables investment is falling in key markets amidst more exposure to market forces. But even while some markets are hit hard, others develop rapidly.鈥�
By Sibel Morrow
Anadolu Agency
energy@aa.com.tr