Clean Energy - Value in Going Green
CHAPTER 2
of corporates are willing to pay a premium for high quality renewable energy products
Taking the First Step
Decision-making by corporations in APAC has been impacted by low levels of understanding and information on how to manage the transition to renewable energy. For most companies, the lack of reliable experts that are able to evaluate the suitability of different renewable energy options for their businesses, and provide support for the eventual development or installation, has slowed down growth.
High-quality, trusted, and efficient renewable energy providers are in demand within the region. A clear majority (87%) of respondents said that they are willing to pay a premium for renewable energy products as long as their goals for adopting renewable energy can be met by suitable providers. In Southeast Asia, a high 91% of respondents would pay that premium, while Australian respondents, who make up the lowest group (74%), similarly agree. However, there is actually no need to pay a premium, with the world’s best solar power schemes now offering the cheapest electricity in history with the technology cheaper than coal and gas in most major countries.
Yet, other than paying a premium for products and services, what are the other longer-term solutions for companies to help them keep up with changes to policies, overcome barriers and make progress in their renewable transition?
Moving the needle
Corporations have increased their reliance on energy consultants to help clear the existing hurdles in APAC. More than four in five respondents (between 81% and 83%) are either already engaging the expertise of energy consultants or are planning to engage one within the next 12 months.
Corporations rely on energy consultants to deliver reliable end-to-end services in APAC. When ranked against all the responsibilities a consultant is expected to deliver, an equal number of respondents across the board (49%) mentioned cost-saving opportunities for energy and utilities, as well as seeking out new energy-sourcing options or providers, and developing or recommending energy and utility strategies as the top three responsibilities.
Other responsibilities, such as managing corporate energy projects, analysing trends in the energy space to identify opportunities, and keeping up with changes within the industry, were also highlighted as key considerations.
% of companies who specified the following activities as the energy consultant’s responsibility
In taking the first step in transitioning to renewables, companies that leverage energy consultants also display ambitious goals and better clarity of the renewable energy landscape. Corporations that work with consultants are more likely – 54% versus 42% – to have higher renewable transition targets with greater urgency to achieve their goals in the next five years. These are also corporations that strongly agree that they need to be informed about renewable energy options, a significant 30% difference from companies that do not engage consultants.
Consultants have increasingly become a critical part of the renewable transition across the region. In SEA, specialist experience is weighted heavily, as 66% agreed that it will affect their decision to move towards renewable energy.
Top Reasons for Not Using Energy Consultants
No team to liaise with the energy consultant
Not a strategic priority
Too costly for my company
Lack of knowledge of what an energy consultant does
Education to Drive Transition
While energy consultants can support the move towards energy transition, there is a fair share of respondents who have yet to engage and have no plans to engage them at this point. This is where education towards the need to go green will be critical in the move towards a clean energy transition.
One in five (20%) of APAC respondents that currently do not and also do not plan to use energy consultants find that there is a lack of available consultants that specialise in their markets.
Specifically in Vietnam, the lack of consultants living up to global standards was named as the biggest barrier (31%).
Internal structural reasons have also burdened the uptake of consultants. Respondents highlighted the lack of strategic priority to engage with consultants (31%), resulting in insufficient knowledge within their internal teams to liaise with consultants (33%).
To move the needle, the benefits of renewable energy will need to be made known to more corporations across APAC through education and incentives for both corporations and consultants. On the one hand, local energy consultants need more incentives to see through renewable transitions for clients. On the other hand, companies need to understand how they can capitalise on consultants to make renewable energy a strategic priority for their business and enable renewable targets to be met.
To a large extent, there is a cyclical relationship between the supply and demand for consultants. Regional consultants are not compelled to provide on-ground services, and corporations do not plan to engage consultants due to the low supply of local experts.
“In the (APAC) region, Consultant (depth of) experience for renewable energy adoption advisory is limited and not really developed to potential yet. MNCs in the regions are often seen working with foreign based consultants from the UK, Europe and the US, and not locally due to this gap and the limited number of experts available. However, there is a growing network of “smart energy” or what is widely known as energy-efficiency consultants developing in the region, but they don’t actively advertise their offerings. While Governments spend money on education and supporting incentives for energy sustainability and the transition in general, it is important that developing the network of experts to support businesses needs is accelerated for a quicker pace of RE adoption.”
- Niranpal Singh, Managing Director Malaysia, BayWa r.e. Energy Solutions Sdn. Bhd
Key Takeaways
There is much value for APAC corporations in going green. With a challenging and confusing regulatory landscape and often a lack of internal expertise, energy consultants in the region have a critical role to play in accelerating the corporate renewable transition and helping corporations to unlock this value. These are the people who can support corporations in making the initial steps and highlighting the business benefits.
Education on renewable energy is still lagging behind – a setback for pushing the green agenda forward. Corporations are limited in their expertise to determine their needs and match them with renewable energy options. While this has resulted in many putting the transition to renewables lower down the priority list, the fact that corporations are also still unaware of the potential of consultants to support them and help to unlock benefits has further seriously obstructed progress.
Consultants can also be a key driver of conversation with local and regional governments to help promote stability and unity in energy policies. They need to act as the guide and glue for corporations, reducing friction, tailoring recommendations, and consolidating offers that work regionally as well as locally, all while within individual company budgets. Investing in consultants today will help corporations unlock the true value of clean energy and recognise their potential returns tomorrow.