Private sector plays key role in scaling up renewables

Energy experts at the Singapore Energy Summit discussed ways to remove the barriers to achieving the United Nations’ target of doubling the share of renewable energy worldwide by 2030.

Governments and the private sector have a key role to play in meeting a United Nations target of doubling the share of renewable energy globally by 2030, said energy experts at the recently-held Singapore Energy Summit.

But while pursuing renewables might be attractive to governments, businesses may not share the same perspective, said Dolf Gielen, director of the innovation and technology centre at the International Renewable Energy Agency (IRENA).

This is because while governments will find it beneficial to eliminate fossil fuel subsidies and related expenditure, it would cost businesses more to transition from conventional energy sources to renewable energy. This is especially the case for countries such as Indonesia and Saudi Arabia which have high subsidies for fossil fuels.

“A greater alignment between the two perspectives is needed to double the uptake of renewables globally,” said Gielen, who was speaking at a panel discussion on the potential of renewables.

The United Nations has set the target to double the share of renewables by 2030 under its Sustainable Energy for All initiative. This will cost an extra US$133 billion per year, but in doing so, governments could also save up to US$740 billion annually by avoiding expenditure on health problems and environmental damage arising from fossil fuel use.

These figures from IRENA’s Renewable Energy Roadmap report released in June point to a strong economic case for scaling up renewable energy. But current trends in policy, technology and industry development indicate that renewable energy will only rise by three percentage points from 18 percent in 2010 to 21 percent by 2030, noted Gielen.

Singapore has clear leadership from the government, a fairly independent regulator, and an educated market in terms of consumers and companies. They are already demonstrating leadership in renewable energy adoption.

John Mogg, president, Council of European Energy Regulators

John Mogg, president of the Council of European Energy Regulators, noted that while regulators set national targets for renewable energy and implement policies to incentivise behaviour, the private sector has a fundamental role in all aspects of the market.

One area the industry needs to address is raising consumer awareness on how adopting renewable energy and energy efficiency solutions would benefit them, said Mogg. This will enable companies to grow their business by providing energy services that would enhance renewable energy use and energy efficiency. “This will be crucial to the acceptance of renewables,” he added.

Bartosz Wojszczyk, chief innovation officer of the Manila Electric Company (Meralco), said that another important role the private sector needed to play was spearheading “disruptive innovation” on energy management. He cited an overhaul of the electric vehicle market by Tesla and the ability of thermostat manufacturer Nest to revolutionise home energy management as examples of technologies that symbolised significant progress in their respective industries.

“We need more disruptors in the market who know how to overcome barriers to clean energy and energy efficiency, and know how to address the needs of customers,” he said.

Nobuo Tanaka, global associate for energy security and sustainability at the Institute of Energy Economics Japan, added that government support was also essential for the private sector to invest in renewable energy technology and infrastructure.

“Everybody knows that the private sector needs a stable policy framework to invest confidently, but governments often change policy in this area frequently. This creates huge problems for the energy industry, where infrastructure takes very long to change. A commitment from the government to a predictable future and long-term stability is important,” added Tanaka.

Experts at the summit also expressed confidence in Singapore’s potential to scale up its own share of renewable energy, as well as drive global innovation in clean energy technology.

“Singapore has clear leadership from the government, a fairly independent regulator, and an educated market in terms of consumers and companies,” said Mogg. “They are already demonstrating leadership in renewable energy adoption.”

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