The COVID-19 pandemic blindsided the world, and led to an economic downturn globally, with countries experiencing a sharp fall in national gross domestic product (GDP), income and employment levels. Governments around the world have worked tirelessly to protect their people and reduce the economic disruption through various relief packages and fiscal stimuli.
Despite this global disruption, the transition to clean energy did not come to a complete halt. An EY study on clean energy projects in eight economies across Asia – Indonesia, Japan, Malaysia, Philippines, South Korea, Taiwan, Thailand and Vietnam – found a robust pipeline of over 800 projects with a total investment potential of over US$316b.
Particularly, countries like Malaysia and Myanmar have procured large commitments from solar energy developers amid the pandemic, through tender processes. Other Asian economies have dedicated sizeable portions of their COVID-19-related relief packages to clean energy transition. For example, Malaysia earmarked US$2.9b for energy efficiency, while South Korea launched its Green New Deal worth US$65b.
Other Asian markets have announced their sustainability ambitions. In the last quarter of 2020, mainland China announced its target to achieve net-zero emissions by 2060. Japan and South Korea followed with similar announcements thereafter, to be net zero by 2050.
In many sectors of the economy, the private sector has been badly affected by the pandemic and companies are working to restore their capital and revitalise their businesses. Questions around whether they are willing to continue investing in the green transition, and if there is sufficient capital ready to be deployed, have surfaced.
Yet, the EY study reveals that the clean energy transition remains as attractive as ever, and confirms that the private sector is ready to deploy vast amount of capital. In many geographies studied, the number of projects currently in development, would allow authorities to exceed the existing targets set for clean energy if all were implemented.
A unique opportunity to reframe the economic recovery in a sustainable manner
The study, commissioned by the European Climate Foundation, identified a pipeline of over 800 shovel-ready projects across the eight Asian markets with an aggregate investment value in excess of US$316b across renewable energy, energy efficiency, electric vehicles, and transmission and distribution sectors. This is likely just the tip of the iceberg as some developers may keep information on projects out of public domain.