Singapore, October 16, 2024 – Asia Pacific (APAC) should accelerate the deployment of mature technologies, support emerging climate solutions, and scale up finance for the energy transition to stay on track for the Paris Agreement, according to Asia Pacific’s Energy Transition Outlook, a report from BloombergNEF (BNEF) published in collaboration with GenZero. This latest report, which builds on the results of BNEF’s New Energy Outlook 2024, focuses on six key APAC markets – China, India, Japan, South Korea, Indonesia, and Vietnam.
Home to some of the fastest-growing economies, APAC faces a colossal but not insurmountable challenge to decarbonize, while ensuring an affordable and secure energy supply to meet growing needs. Cost-competitive low-carbon solutions already exist, such as solar, wind and passenger electric vehicles, and they represent a significant economic opportunity.
Getting to net zero by 2050, however, requires accelerated deployment momentum, particularly from now to 2030. This means governments and corporates need to intensify efforts to commercialize emerging decarbonization technologies for deployment at scale within the next few years. The region will also need annualized investment in energy transition technologies to triple to US$2.3 trillion over 2024-2030, the report says.
Frederick Teo, CEO of GenZero, said, “Fundamental decarbonization requires an energy-centric approach. Clean power alone could abate 50% of Asia Pacific’s cumulative emissions between 2024 and 2050. While the Asia-Pacific region enjoys an abundance of natural resources, including the ability to generate considerable renewable energy, this potential is not evenly distributed across countries in the region. Different levels of socioeconomic development mean not all countries have the ability to effect a just energy transition on their own. Cross-border collaboration and the ability to catalyze financing from the public, private, and philanthropic sectors globally will be key to accelerate the deployment of cost-effective solutions in the coming years to meet our targets.”
Jon Moore, CEO of BloombergNEF said: “Carbon markets could be a critical additional source of funding for APAC markets to finance early-stage decarbonization technologies and accelerate phase-out of existing unabated coal power plants. Emerging technologies may require greater support from governments and multilateral institutions to catalyze deployment. They may face higher barriers to financing due to the uncertainties around technology performance, supply chains and profitability. Collaboration with development institutions and international banks can help mobilize greater capital flow for emerging technology projects.”
A diversity of technologies is needed to accelerate the clean energy transition
Achieving net zero in the region’s energy systems will require a portfolio of technologies of varying maturity that jointly deliver the deep decarbonization required. The report identifies nine technology drivers that will make or break the region’s transition from a high- to low-carbon energy system (see Figure 2 below).
Among the nine pillars, only four are mature, commercially-scalable technologies with proven business models: electric vehicles, renewable power, energy storage, and power grids. These still require a significant acceleration to get on track for net zero, but there is little to no technology risk and economic premiums are generally small or non-existent. However, these technologies may still face different levels of regulatory risks in each market.
By contrast, nuclear, carbon capture and storage (CCS), hydrogen, sustainable aviation fuels, and heat pumps are not currently cost-competitive or face challenges scaling up commercially. As a result, their deployment stagnates under the ETS. But each of these technologies must scale rapidly to achieve the trajectories laid out in the NZS. Achieving commercialization of these technologies within the next decade will be imperative to the success of the region’s decarbonization goals.
For a copy of the full Asia Pacific’s Energy Transition Outlook please visit this link.
[1] The Asia Pacific’s Energy Transition Outlook explores two scenarios: (a) The Economic Transition Scenario employs a combination of near-term market analysis, least-cost modelling, consumer uptake, and trend-based analysis to describe the deployment and diffusion of commercially available technologies in the absence of new policy regimes; and (b) The Net Zero Scenario (NZS) uses similar least-cost optimization, but shows a plausible pathway to achieve net-zero emissions by 2050 and meet the well below 2°C of global warming goal of the Paris Agreement.
Contacts
Oktavia Catsaros, BloombergNEF
+1 212 617 9209
ocatsaros@bloomberg.net
Michelle Tan, GenZero
+65 8869 7688
michelletan@genzero.co
Shu Ning Tan, GenZero
+65 9018 9407
tanshuning@genzero.co
About GenZero
GenZero is an investment platform company focused on accelerating decarbonisation globally. Founded by Temasek, it seeks to deliver positive climate impact alongside long-term sustainable financial returns by investing in opportunities with the potential to be nurtured into impactful and scalable solutions.
Driven by a common purpose to decarbonise for future generations, GenZero recognises the need for a holistic and integrated approach to achieve a net zero world. It adopts a flexible investment approach across three focus areas to drive climate impact: (i) nature-based solutions that help protect and restore our natural ecosystems while benefiting local communities and biodiversity; (ii) technology-based solutions that deliver deep decarbonisation impact; and (iii) carbon ecosystem enablers which refer to companies and solutions that support the development of an effective, efficient, and credible carbon ecosystem.
For more information on GenZero, visit https://www.genzero.co.