Opinion Piece

So, what do we think 2022 has in store for renewables in Southeast Asia?

Author: Daniel Gaefke, APAC Director, BayWa r.e.

Strong growth in the development and application of renewable energy technology during 2021 puts APAC in a confident position for the year ahead. The same can be said for the amount of new capital eager to deploy into the sector.

You might be forgiven for thinking it’s plain sailing ahead.

However, new challenges are never far from the horizon. 2022 calls for new frameworks to implement billions of dollars of investment as fast as possible. Let’s recap how we got to this point, and break down why this is such a pivotal year for renewables in Southeast Asia.

A promising head start after a turbulent year

Despite the obvious ongoing hurdles 2021 presented, there’s been enormous progress across the region in terms of applying advanced technology. In solar, this success has been particularly pronounced.

Solar direct wire projects, most commonly rooftop mounted, have been a key driver especially in Southeast Asia. Businesses have a clear and vocal appetite for getting involved in energy transition, so it makes sense they’d be happy to host PV equipment on their premises.

Likewise, private landowners are aware of the benefits that come with embracing renewables. Land is a precious commodity in Southeast Asia, so utilizing large bodies of water for Floating PV projects has helped play to the region’s strengths. Interest in Agri-PV is also enjoying steady growth.

These trends are only going to continue in 2022. It’s encouraging to see the demand for greater renewable energy share coming from corporates, along with the willingness to drive that change themselves. In this, they’re aligned with governments who are prepared to set highly ambitious carbon targets.

COP26 was a clear sign that policymakers have the will to do better. But as these good intentions start to manifest in the real world, we quickly find that the devil is in the details.

New year, new challenges for renewables in APAC

Targets are a good start, but they’re of limited use without the frameworks and regulations which allow them to be met. In some countries processes are streamlined enough for developers to simply get to work. Elsewhere, we’re seeing permitting processes which could potentially hold a project up for years.

In 2022, we need to work more closely than ever with local communities from the earliest stages of a project. Bringing them on board and getting them to see the long-term positive impact that comes from embracing renewables will expedite the process significantly. Meanwhile, policymakers must look at ways of fast-tracking development if they want to meet their own lofty targets.

I’ve spoken previously about the hidden challenge of grid capacity in APAC. This year, it’s vital that we work on the region’s capacity to transfer power from one national grid to another. Faster uptake of PPAs and virtual PPAs will help countries feel the benefit of new investment more quickly.

Finally, the region needs to take rapid steps to address an emerging education and employment gap. Ensuring citizens have the skills to engage with the technology we’re implementing and build rewarding careers is absolutely critical. This will go a long way towards fostering deeper ties with communities and accelerating the speed of change.

Driving the energy transition together

BayWa r.e. will continue to invest in these promising Southeast Asian markets, where we enjoy well-established relationships with businesses, communities and government.

As we do our part to effect change, we look forward to being joined by forward-thinking policymakers and local leaders on the ground.

We now have around seven years to try and make a real difference. The renewables sector needs to work closely with businesses and governments across APAC to leverage investment opportunities and secure more renewable energy generation.

It’s not too late, but improvements in permitting, grid capacity and education need to be proactively addressed if we’re to make the most of the decade that matters.


Follow Daniel Gaefke on LinkedIn