There have been fears that the growth of renewable energy could slow this year – even in Asia, a region home to the world’s clean energy juggernauts, China and India.
With the United States administration led by President Donald Trump undoing key green policies and taking a step back from climate cooperation, there have been expectations that the pace of the energy transition would slow. Global geopolitical shifts have also caused a backlash against environmental, social and governance (ESG) investing to gain momentum.
In a new podcast series that spotlights Asia’s clean energy pioneers, Eco-Business spoke to Assaad Razzouk, chief executive of Singapore-headquartered Gurin Energy, about the challenges and opportunities of the renewables sector in Asia in uncertain times.
The British Lebanese entrepreneur, who made a career switch from finance to renewables via the carbon markets 20 years ago, says that the world is finally coming to terms with the possibilities of tapping on the sun for power. The era of “energy super abundance” is almost here, he believes.
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In the social media space, engagement triggers have changed. People now want more ‘good’ climate news and they want to put their heads in the sand when it comes to climate emergency news.
Assaad Razzouk, CEO, Gurin Energy
“This has never happened before in the history of humanity. We have always lived energy-constrained, since the dawn of time. That is now changing. Although disappointingly, I think a lot of people don’t quite realise this,” he said.
Power and economic success is now being determined by the countries that can scale up renewables and batteries the fastest, said Razzouk, adding that if Southeast Asia is slow to connect countries’ energy systems with the much-hyped Asean Power Grid, it could be left behind.
Besides building a renewables business across the continent, Razzouk is one of the sector’s most outspoken voices on the energy transition, chronicling the changing dynamics of the world’s energy markets and the intensifying impacts of climate change to his following on social media and in his book, Saving the planet without the bullshit.
In a post on 22 August, in response to data from the International Energy Agency that predicted renewables to be the world’s biggest source of power by 2026, he wrote: “The renewables revolution is unfolding live, fast and furiously. It’s exponential, global. And this decade. Just look at the data and do the math.”
In this podcast, Razzouk was asked how he started out in renewables, the challenges and opportunities in Southeast Asia for renewables players, and if he thinks he’s winning the clean energy conversation at an uneasy time for climate action.
Assaad Razzouk, CEO, Gurin Energy. Image: Eco-Business
Tune in as we discuss:
- From finance to carbon markets to renewables: Razzouk’s career path
- Scaling renewables and the localisation imperative
- Where are the opportunities in Southeast Asia?
- Intermittency and planting wind farms in nature reserves
- “Winning” the conversation on renewables in the Trump 2.0 era
- China, India and the growth trajectory for clean energy
- Advice for a new generation of clean energy entrepreneurs
The full transcript:
How did you start out in renewables?
I switched from the finance industry to the energy industry via the carbon markets back in 2005.
When the Kyoto Protocol was ratified in 2005, a few other colleagues and I genuinely thought that carbon market mechanism would be going to be a very interesting tool to use as a means to emissions reductions. Which is what it was intended to be back then. Therefore I started a business that was trying to capture pollution and turn it into income streams, taking advantage of the United Nations framework at the time, which was called the Clean Development Mechanism, which still exists to this day.
At the time, the carbon industry was supposed to be around until 2020 when industry and governments were supposed to move from carbon certificates to actual emissions reductions – that was the intent.
The next step was to ask:if you are going to start a business that is going to capture pollution and turn it into an income stream, where is that pollution? Most of that pollution was coming from, in volume terms, China, India, Southeast Asia, and the United States. And so we focused on methane and set up businesses that were capturing methane gas from oil and gas and coal mines principally, effectively then piping them Into containers to generate electricity from them. That’s how I started in the industry.
But that particular carbon market, the Clean Development Mechanism, collapsed in 2013 a few years after the global financial crisis of 2008. We therefore pivoted from carbon to renewable energy because the portfolio had renewable energy assets within it.
That’s how the past 20 years developed. Today, it’s really just renewable energy. And it’s been just renewable energy for over 10 years now, because, on the one hand, the carbon market collapsed, but on the other hand, I think the innocence associated with the early days of the carbon markets has been replaced with an increased realisation that it was all a bit of a con, really – that actual emission reductions simply were not happening, and that the carbon markets were being used as an excuse to either greenwash or avoid the topic altogether.
What are some of the challenges in scaling the business? For example, a country like Indonesia has got many structural hurdles to get around. National utility PLN limits the renewables that can be added to the grid.
That’s a big question. First of all, there are four Asias – China, India, North Asia ex-China, and Southeast Asia – and each is quite distinct in terms of how you might approach the market. I’ve started businesses in all of them.
I’m not sure there is an issue, per se, scaling in any of these markets. The business, whether it’s carbon or renewable energy, is fundamentally a very local business. As long as you have set up a local operation, the operation can scale. Every market has its own particularities. I’m not sure doing business in say, West Virginia or Brazil, is any easier than doing business in any of the Asian markets that I have experience in.
But you have to localise. You have to operate as a domestic business and understand the local characteristics that influence how your business is going to develop.
Also, scaling up isn’t about the PLNs of the world. It’s really about people. If you’ve got the talent that you need in these countries, there is so much that you can do because the space is not that occupied.
Southeast Asia is the only region here coal is growing in its energy mix. Where do you see the key opportunities for renewable energy growth in Southeast Asia?
Let’s take a step back. Today, we are in a world that is significantly different from the world as it was 10 years ago. The reason we are in a world that is so fundamentally different is because of solar power. Let me explain.
The world as a whole consumes something like 18 terawatts (TW) of energy, from all sources, oil, gas, solar power, wind, geothermal. We’ve had over our head the sun, which at any point in time is giving you 173,000 terawatts of energy. Now, we finally figured out how to harness the sun cost-effectively and how to scale solar power. What you therefore see around you right now is those 18 terawatts of power on their way to becoming 40, 60, and maybe 100 TW of power. There’s a massive scale up of the energy at our disposal.
This has never happened before in the history of humanity. We’ve always lived energy constrained since the dawn of time. That is now changing, live in front of your eyes. Although disappointingly, I think a lot of people don’t quite realise that.
However, the fact that you can deploy so much solar, wind and batteries today, the fact that you can build it at scale quickly, is going to become a critical differential of economic success between countries.
It’s almost like industrial and economic strength and power, which have always been associated with how much energy you had, is now becoming about how much and how fast you can harness solar power and batteries.
Now, layer onto that, the fact that the use cases for energy are also developing very fast. Look at artificial intelligence (AI) and compute and how much energy that will require to scale. So it doesn’t matter which Asian country you look at, they all need to multiply their electricity capacity.
If you take Singapore, for example, the installed electricity capacity is, let’s say 13 gigawatts today, Singapore is going to need to multiply that – not increase it by 10 per cent or 20 per cent, but multiply it by 2040. The same applies to Indonesia, to Thailand and the Philippines, as well as Vietnam.
As a result, the opportunity is massive. And not just to us, to really everybody, because if Asean doesn’t connect its grid and doesn’t multiply its electricity capacity, it’s going to be left behind other countries in terms of its ability to play in AI and robotics and soon quantum computing powered world.
You can see how there’s just an enormous amount of work to do. It’s all encompassing, across all economies in Asia. And it’s going to happen. It’s a certainty that it’s going to happen. It’s really about, who is going to get to energy super abundance first?
For companies such as Gurin Energy, there’s a need to play in the space of connecting Southeast Asia’s energy systems, right?
That’s exactly right. The Asean grid was a political project back in the 1980s when it started, and beyond politics, good neighbourly relations and some economic rationale, it didn’t really have a massive trigger. That has changed now.
I think policymakers, starting with Singapore, which in some ways got it first, understand that we are going into this world where energy suddenly is no longer short, where we are going to have a super abundance of energy. And if we connected all these countries, all of them would benefit. Because in effect you will be able to scale faster.
Also, some countries are more constrained than others. Either maybe you don’t have enough sun or you don’t have enough wind, or you don’t have enough territory. And so when you connect Asean, the whole is a lot more than the sum of the parts. And I think you will also see this play out across Asean over the next decade or so.
The economic and national security rationale has become effectively overwhelming.
In Southeast Asia, a few challenges keep coming up, such as intermittency – that it’s difficult to connect intermittent power sources to ageing grid infrastructure – and poorly planned renewables projects in conservation areas. What do you say to these concerns?
Sometimes when I have an argument with my son, he looks at me and he says, what do you know, you are from the 1900s? And the issue of intermittency is very much exactly that. It’s an issue from the 1900s. Intermittency is no longer really a big topic of conversation unless you are using it as a political tool. And the reason for that is there is no intermittence once you combine solar, wind, and batteries.
And effectively what has happened is that the cost of batteries has dropped to the extent that now solar plus batteries, which equals no intermittence, is cheaper than coal fired power or gas fired power.
The question no longer applies provided policymakers see that increasingly it’s not going to be about solar and wind, it’s going to be about batteries first, then solar and wind.
The battery market is scaling up very fast, around the world for that very reason. Batteries happen to be a very good energy management tool in terms of the rapidity of their response, when the grid needs them and in terms of their resilience .
What about project planning? We’ve seen numerous instances of poor planning of renewables in conservation areas.
I can’t do anything about poor planning. But what we can do as private sector companies is apply international standards to the selection of sites in order to avoid the outcomes from poor planning decisions.
The fundamental difference between renewable energy and other types of energy is that in renewable energy, I’m building a solar or wind farm near your house. You are my neighbour and I need to live with you for decades – unless those farms are in industrial zones, where this doesn’t apply, or with rooftop solar, where you are deciding to have it.
Renewable energy is about getting on with your neighbours. Not so much about planning, because in a conservation area, hypothetically, you are not going to get planning permission to do anything anyway. What does apply, however, is, consent of the citizenry around you with your project.
But you have to keep these issues in perspective.
If you think about the greenhouse gas reductions per unit ratio or the water pollution impact or any other kind of environmental impact, the alternative – natural gas or coal – dwarfs solar and wind by a factor of 100 times.
People forget what the alternative is.
I’m not making any excuse for poor planning. But nonetheless, I think people get the fact that solar and wind are much cleaner, they have almost no emissions impact, and contribute to fighting back against climate change. Very importantly, they are far, far healthier than fossil fuel power.
You are also very vocal about the value of renewables and you play in the space of the culture war between fossil fuels lobbyists and renewables. Given the election of Trump and the pushback against ESG, do you feel that this is a conversation that you are winning?
It’s an interesting question. I’ve certainly noticed, at least in the social media space, that engagement triggers have changed. People want now more “good” climate news and they want to put their head in the sand when it comes to climate emergency news. I’ve certainly noticed that is the reaction to various social media posts.
But I’m not fundamentally worried, because I think at the end of the day it’s going to be about the math.
Because I think what you will see in the US is maybe a slight dip now in the buildout of renewable energy, but then a quick recovery, maybe even as soon as next year.
And the reason for that is… if the issue is scaling the energy system, not by one TW, but by 10 or 20 or 40, there is no other way that you are going to get that done other than solar, wind, and batteries. And as it happens, they are cheaper than the alternative. And of course, healthier.
And so the math says that you are going to continue overwhelmingly building solar, wind, and batteries globally at a level of almost 90 per cent or more of all electricity additions.
How hopeful you are for the rest of the year in terms of the growth of Gurin Energy and renewables sector in Asia?
Just look at China and India if you are in any doubt.
That is where what I’m talking about is actually being implemented in practice.
Asean is just going to continue doing what it’s doing. And even Japan and South Korea are going to accelerate their rollout.
Often in these debates, the best thing to do is to chill. Because it’s all happening, it’s just not happening between yesterday and today and tomorrow. Just let time do its thing.
Do you have any advice for someone following in your footsteps who wants to be a clean energy entrepreneur. What would you tell the younger you about going again?
I would tell “mini me” that this is a unique opportunity in a historical context.
Do you remember the famous example of Blockbuster versus Netflix? Blockbuster was those stores where you go and rent your video to watch it at home. Then suddenly we went from analogue to digital in the bits world with the internet. And over time, the internet download speeds became very large, almost inconceivable to someone from the Blockbuster days. And then business models like Netflix emerged to benefit from that super abundance of bits.
And now what’s happening is the same thing. So you are going to go into a world where energy is super abundant. The issue is, people haven’t really started thinking about which business models are going to benefit from that, but they are going to have to innovate. The only use cases we have right now are AI and Bitcoin mining for energy super abundance. But there will be many more. And “mini me” should go and start some businesses thinking through what they are going to do with that super abundance, because it’s going to be super exciting times.
So you are confident that hugely energy intensive activities like AI won’t overwhelm the rate at which we are adding new energy capacity. That’s the big concern, especially in Southeast Asia, isn’t it?
Well, exactly. There is no choice. You are just going to have to add that clean energy to match that demand. Otherwise, you are not gonna be able to play in the AI-powered world.
This transcript has been edited for brevity and clarity
