SINGAPORE, Jan. 11 /PRNewswire/ -- There was an unprecedented rush to develop the renewable energy (RE) sector in the Asia Pacific region in order to create jobs as well as to revive the ailing economies from the impact of the global economic slowdown. Several countries in the region introduced financial stimulus packages in the first half of 2009 where a majority of the funds were targeted at the RE industry.
As a result, governments in this region introduced policies that included mandatory RE targets, tax credits, grants and investment incentives to accelerate the penetration of RE by institutionalizing its use, developing national and local capabilities in the use of RE systems, as well as promoting its effective utilization and widespread commercial application by providing fiscal and non-fiscal incentives, including higher feed-in-tariffs.
According to Frost & Sullivan's Asia Pacific Industry Analyst of Energy & Power Systems Practice, Suchitra Sriram, the RE industry holds considerable potential for growth in 2010 as initiatives taken by the governments in 2009 is likely to stimulate not only the massive adoption of green energy technologies but also R&D investments and manufacturing capacity.
"As a result of funding received through the stimulus packages, several projects across the RE spectrum like wind, solar, geothermal, and biomass, are expected to be commissioned in 2010. Besides expanding investments from the private sector, major utility companies in the region are keen to diversify from their conventional fuels so as to include RE in their energy portfolio," she says.
According to Sriram, in 2010, RE adoption is likely to receive a big thrust from countries such as Malaysia where introduction of feed-in-tariff in early 2010 is likely to promote grid connected solar PV systems; South Korea where tax incentives are to be given to companies operating in the alternative energy sector; and the Philippines with the recent passage of the 'Renewable Energy and Biofuels Act' to reduce energy costs.
She continues, "Countries like Japan that is offering zero-interest loans to green energy companies plan to generate 20.0% of its electricity from RE by 2020 while Australia with its new legislation passed in 2009 aims to achieve 12,500 GWh of power generation from RE in 2010 from the existing 9,500 GWh."
Other countries where RE adoption is likely to boom include Indonesia with the government's flagship geothermal power projects, Taiwan with the passage of the 'Renewable Energy Development Act' and Thailand where the National Plan for solar energy aims to increase the 36 MW installed solar photovoltaic (PV) capacity in 2008 to 550 MW by 2022. Apart from growing investments from the private project developers into the RE sector, there has also been an increasing trend of utilities investing in RE projects across the Asia Pacific region.
Industry trends will focus on several RE technologies but the promising technologies are expected in the wind and solar industry, due to abundant resource availability, modular nature of the technologies, easy installation procedures and its ease of application for remote area electrification opportunities.
"Growth opportunities in these two sectors are likely to attract new entrants, such as small and medium enterprises (SMEs), supplying components as well as companies that undertake system integration and installation," says Sriram.
She adds, "In the solar power market, investors are keen to take advantage of the declining prices, glut in supply and government incentives addressing this sector. Countries that hold growth potential in 2010 include the traditional market, Japan, South Korea, Australia, Taiwan, Malaysia and Thailand while in the wind power market, there is likely to be pockets of interest and activities in countries such as Vietnam, Philippines, Taiwan, Thailand, Japan and Australia."
In addition to the above two RE technologies, the Asia Pacific region is one of the largest markets for geothermal power plants. In 2010, there are likely to be few projects based on this RE source in countries such as Indonesia, Philippines, Australia and Papua New Guinea.
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SOURCE Frost & Sullivan