The ongoing climate crisis has pushed the adoption of sustainable investing and strategic environment, social and governance (ESG) initiatives across capital markets and businesses into mainstream discourse. While information on the ESG challenges faced by the global economy is widely available, solutions to these issues are still in their nascent stages.
Coupled with black swan events in the past several years disrupting global supply chains, such as the Covid-19 pandemic and Russia’s invasion of Ukraine, energy security is a key issue that needs to be addressed.
Mohd Yusrizal Mohd Yusof, managing director of TNB Renewables, says the unexpected disruptions over the past two years have shed light on the “vulnerability” of energy prices. TNB Renewables is a provider of renewable energy services and a subsidiary of Peninsular Malaysia’s energy provider Tenaga Nasional (TNB).
“In the planning of an electricity supply system, three main components need to be balanced. The first is the affordability of energy prices; the second is ensuring energy supply meets consumers’ demands; and finally, the environment, which has seen greater focus more recently,” says Yusrizal, speaking at a recent webinar organised by Maybank titled “Invest Asean 2022 ESG Conversations: Renewables, Energy Security and the Low Carbon Economy”.
Part of this “balancing act” could come from alternative energy sources, such as renewables from solar energy in tropical Asean, counteracting increasing crude oil prices like the current situation facing the world, adds Yusrizal.
Fellow speaker Raj Kumar Jain, head of business development at Adani Green Energy, also notes sustainable energy stems from affordability, an objective that can be strengthened with the adoption of renewables. Adani Green Energy is an Indian renewable energy company headquartered in Gujarat and owned by Indian conglomerate Adani Group. The company operates Kamuthi Solar Power Project, one of the largest solar photovoltaic plants in the world.
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“I believe, most countries in the world now, including most Asean countries, are already moving below grid parity,” he says. “From that perspective, the adoption of renewables has helped, and this period of 2½ years where we have faced all these issues, has only strengthened the idea around deploying large scale renewables.
Adding on, Jain believes that the goal, as well as the challenge, is to find methods to ensure that renewable energy is available in each country. However, this has to be specifically tailored to the respective countries’ “formulas of adoption”.
As an example, India is the fourth largest market for renewable energy and has large resources of solar and wind energy to be deployed each year — but solutions will be different for every country.
See also: India aiming to finalise carbon deals with Japan, Singapore
In contrast, Singapore is not as fortunate as India when it comes to sources of renewable energy. According to the Energy Market Authority (EMA), Singapore has limited renewable energy options, as the city state lacks hydro resources; wind speeds and mean tidal range are low; and the geothermal energy is not economically viable. This makes solar energy the most viable renewable energy option for Singapore.
Despite its limited renewable energy resources, the way Jain sees it, Singapore is a great example when it comes to growing the renewable energy infrastructure, despite its currently still low adoption. This is as the local government is actively looking at connections or solutions from other parts of the world to enable a transition towards green electricity. He reiterates that while large corporations do play a part in the growth of providing greener energy solutions, governments too have a part to play in the adoption and widespread use of such solutions.
Meanwhile, Thailand-based energy distributor Global Power Synergy’s CFO Thitipong Jurapornsiridee notes that “integrating” regulatory frameworks from Asean governments will be essential for aggregating renewable energy to match supply and demand. “For example, Laos probably has an excess capacity of hydropower and Singapore is likely to import renewable energy from regional countries. With this, Thailand and Malaysia play an important role in connecting these transmission lines,” he says.
To sum it up, a sense of collaboration and partnership between governments is encouraged for renewable energy solutions to improve in a particular country.
For investors, Jurapornsiridee adds: “There are developments in terms of storage technologies but there will not be a single solution. The private sector could take part in storage research and development as well as promote its application, such as in enhancing the reliability of renewable sources.”
He cites the limited usable period of solar and wind power, which is not always generated when demand is at its peak — an issue that could be addressed with enhancing storage technologies for renewable energy.
Mohamad Irwan Aman, head of sustainability at Sarawak Energy, agrees that different actors have their own roles to play in the singular objective of moving towards renewable energy usage. He adds: “The biggest impact for Sarawak Energy has been switching from thermal energy to hydropower. We reduced our carbon intensity by 72% in 2020 compared to 2010.”
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“This is aimed at addressing the issue of ESG,” he adds. “But we should not stop there, which is why we have committed to the 1.5C targets unveiled at COP26. This will be the next driver for us to push through the adaptation of newer technologies, like our pilot projects on floating solar battery storage, hydrogen fuels, increasing electric vehicles in our fleet, as well as net metering.”
According to Irwan, these projects align with Sarawak Energy’s vision to become the “regional battery” for Asean. Sarawak Energy is the sole electricity provider in Sarawak, Malaysia.
Ultimately for Asean, Yusrizal says inter-governmental initiatives will play a big role to enable “higher penetration of renewable energy” in the region, with Malaysia’s location set to play a “significant role” for energy interconnectivity with its neighbouring countries.
