The Asia Pacific region is set to invest US$3.3 trillion in power generation in the next 10 years, an analysis by Wood Mackenzie has revealed. The investment will focus on wind and solar power, which will account for 49%, and energy storage at 12%.
Alex Whitworth, Head of Asia Pacific Power & Renewables Research at Wood Mackenzie, highlighted the significance of the region in his keynote at the Renewable Energy India Expo 2023. “The Asia Pacific region is critical to the power sector’s energy transition as it grows to over half of global electricity demand this year. The two largest markets in the region, India and China, are at the forefront of renewables growth, but are also leading the world in coal power deployments,” Whitworth stated.
He continued to discuss the region’s plans for the upcoming five years. “The region is forecast to add 1,840 gigawatts (GW) of new capacity in the next five years, more than the rest of the world combined.”
On India’s pivotal role in energy transition, Whitworth noted, “India is one of the most dynamic and important growing power markets in the Asia Pacific region and the world. Power demand doubled in the last 12 years, an achievement we could very well see again as strong economic growth continues over the next 12.”
Despite its progress in renewable energy, with renewables making up 22% of its power generation in 2022, India continues to invest in coal power, with a pipeline of projects exceeding 50 GW. The nation’s power demand trajectory will see it ranking third globally by 2050, only behind China and the US.
“Currently, fossil fuels (mainly coal) still provide 75% of India’s power supply but that share is declining steadily,” Whitworth mentioned. He also pointed out that in the upcoming decade, India will need an investment of US$350 billion in power generation to meet its demand.
Whitworth concluded, “While cheap renewables and technology advances support continued expansion of renewables in India, the speed of growth of wind and solar is not a given. There are key uncertainties around grid investments and reform of pricing mechanisms to support such investment, growth of energy storage, as well as policy support for all of the above. Despite such uncertainties, India’s key role in the overall global energy transition is certain.”
