THE ASIA-PACIFIC 02 | Renewable Energy in the Asia-Pacific CONTENTS
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Edition 4 | 2017 DLA Piper RENEWABLE ENERGY IN THE ASIA-PACIFIC 02 | Renewable energy in the Asia-Pacific CONTENTS Introduction ...................................................................................04 Australia ..........................................................................................08 People’s Republic of China ..........................................................17 Hong Kong SAR ............................................................................25 India ..................................................................................................31 Indonesia .........................................................................................39 Japan .................................................................................................47 Malaysia ...........................................................................................53 The Maldives ..................................................................................59 Mongolia ..........................................................................................65 Myanmar .........................................................................................72 New Zealand..................................................................................77 Pakistan ...........................................................................................84 Papua New Guinea .......................................................................90 The Philippines ...............................................................................96 Republic of Korea ...................................................................... 103 Singapore ..................................................................................... 108 Sri Lanka........................................................................................115 Timor-Leste ................................................................................ 120 Thailand .........................................................................................126 Vanuatu ..........................................................................................132 Vietnam .........................................................................................139 Feed-in Tariff Table .....................................................................145 Business Environment Explanatory Note ............................ 148 Acknowledgments ......................................................................149 DLA Piper .................................................................................... 150 www.dlapiper.com | 03 INTRODUCTION DLA Piper is proud to release the 4th edition of Renewable Energy in the Asia-Pacific. This publication is an ambitious task, seeking to capture the The modern renewable key renewable energy market highlights across the vast Asia-Pacific region, and provide a reference tool for the entrepreneurs, investors, inventors, energy sector presents economists, developers, financiers and regulators of 21st century renewable a range of opportunities energy issues. and possibilities in the For this Edition 4, we provide a high-level analysis in a standardised template Asia-Pacific region. of 21 Asia-Pacific jurisdictions, including: Entrepreneurs are seeking ■■ the two burgeoning economies of our time, which increasingly shape not only energy politics, but global politics: the People’s Republic of China to disrupt the traditional, and India; vertically-integrated supply ■■ the developed markets of the south (Australia and New Zealand) and chain of a bygone era. the north (Japan and the Republic of Korea); Inventors are looking for ■■ the advanced ‘city states’ of Hong Kong SAR and Singapore; new and more efficient ■■ the vast, developing economies in mainland Asia: Pakistan, Mongolia materials and storage and Myanmar; capabilities. Developers ■■ the growing coastal economies of South and Southeast Asia: Indonesia, Malaysia, the Maldives, Sri Lanka, the Philippines, Timor-Leste, are investing in mega- Thailand and Vietnam; and projects to service ■■ two key case studies from the South Pacific: Papua New Guinea and growing middle classes. Vanuatu. And environmentalists We have also taken a sub-regional focus, particularly in large countries, are promoting non- where generalisations based on national boundaries can be crude when failing to take into account local policies and regulatory conditions. hydropowered, clean Within this Introduction is a brief analysis on climate change adaptation sources of energy for issues, particularly in light of the historic 2015 Paris Agreement. At the back carbon and pollution of this publication is a feed-in tariff comparison table, offering a glimpse into reduction. Governments government investment levels as a key driver of renewables investment (we have also provided some European rates and commentary for are attempting to keep benchmarking purposes). track of the sustained level of investment into Our last edition this dynamic sector, whilst In DLA Piper’s most recent edition of this publication (Updated Edition 3, published October 2014) we noted China’s leadership of the Asia-Pacific also maintaining security, renewables markets. We also looked at the emergence of a ‘two-track’ stability and diversity in renewables economy between governments committed to fund feed-in energy supply for their tariffs and investment incentives, and others more reticent to altering the traditional energy mix and overcoming short term barriers to investment. populations both on and This gap remains, and China is still the clear front runner for renewables off the grid. investment generally. However, another emerging pattern in the region is what might be termed an ‘adjustment period’. 04 | Renewable energy in the Asia-Pacific Moving from fossil fuels to renewable energy is a is perhaps the best regulated market in the region and has generational change that will not be easily completed. had healthy investment levels towards its 35% renewables Renewables have high start-up costs and require contribution by 2030. Despite this, large coal mines governments to prop-up the industry in the short term, continue to be built with dozens more in the pipeline. with the knowledge that cheap (or almost free) fuel from Like the Philippines, Sri Lanka too has historically high the wind, sun and rivers, will reduce electricity prices in the levels of hydropower penetration in the electricity sector. longer term. While renewables investments continue on a It is seeking to rely on hydropower to reach its ambitious large scale across the region, there is a realisation that any 2020 target of 60% renewables contribution. gains in the overall percentage contribution of renewable Japan was thrust into the global energy spotlight for several energy to national electricity generation will be hard-won, years following a severe earthquake in 2011 and subsequent particularly as electricity demand continues to rise in explosions at nuclear reactors in Fukushima. Nuclear power populous jurisdictions. plants remain largely offline and attempts to re-open some Some countries have reduced the scope, period or rates have been met by community-led lawsuits. Continued for subsidies (like feed-in tariffs), either because all capacity liberalisation of the electricity sector has been combined has been filled or the government is no longer willing to with steady growth in wind and solar as the country seeks interfere in the renewables market, citing cost concerns 22 to 24% renewables contribution by 2030 (the nuclear (auctions have become more common as a way of the target is 20 to 22%). Vietnam too, is seeking to liberalise market determining prices, rather than government- its electricity supply chain. It remains in the formative stages imposed rates). While renewables investment remains of developing its renewables industry, however the country healthy across the region, so does investment in fossil fuels does have some large-scale hydropower facilities and with large coal mines and plants continuing to be built, recently announced its long-awaited solar feed-in tariff. largely out of concern for security of electricity supply and As part of Malaysia’s 2016 – 2020 plan, the Government the-always-sensitive issue of short term electricity prices. has emphasised the need for diversification. Large-scale solar has seen some success in 2016, however solar feed-in Some highlights across Asia-Pacific tariffs are largely closed after a strong period of investment. India is fast emerging as a renewables powerhouse, Foreign investor concerns remain in Myanmar, which is particularly in terms of solar photovoltaic. Under the still designing a regulatory framework for its energy sector Ministry of New and Renewable Energy, India has seen a and may yet be lured by the abundant known fossil fuel real growth in large-scale solar farms. In 2007, the country and mineral reserves in its north. Pakistan too suffers was producing 10GW in renewable energy, today it is more from foreign investor concerns, however in partnership than 42GW. While the country might fall short of its (very) with Beijing, it is seeking to add 10,400MW of electricity ambitious 2022 solar target of 100GW, investments in non- supply, including from large hydropower dams, to address hydropower sources of energy have seen consistent growth. its current “energy crisis”. Mongolia has seen a shift China remains a clear powerhouse of the renewables back towards