Renewable energy is energy generated from natural resources that can be replenished. These include wind, solar, bioenergy, geothermal and hydropower. 

Demand for energy is driven by Asia’s rising economies, urbanisation and concerns about the environment (especially burning coal), supply security and price volatility, prompting Asian governments to focus on renewable energy. Energy demand, projected to increase by 50% by 2025, is expected to grow by an average of 4.7% per year to 2035 according to the International Renewable Energy Agency. Growth in energy demand will be highest in the power sector, followed by industry, transport and buildings.

Power generation is projected to double by 2025. Asia’s total renewable energy capacity in 2017 was 917,322 megawatts, accounting for about 42% of global renewable energy installed capacity. Asia’s top three producers in that year were China (618,675 megawatts), India (104,968 megawatts) and Japan (83,401 megawatts). A distant fourth was South Korea (9387 megawatts). 

On the supply side, fossil fuels, led by oil and natural gas, account for more than half of the region’s energy supply. Crude oil and its derivatives are mainly used as transport fuel. While the share of natural gas in the total primary energy supply has risen over the past two decades, the fastest growth has been registered by coal, especially with the commissioning of numerous coal-fired power plants since 2000. Natural gas contributed the largest share (41%) to the power generation mix in 2015, followed by coal (33%) and hydropower (16%).

One often overlooked sector is the solar photovoltaic (PV) sector. Richard Wong, vice-president for the public sector at business consulting firm Frost & Sullivan, cites a report by the company that states that this sector is experiencing a period of exceptional growth, but the pace of growth is forecast to slow significantly over the next few years. The market is largely driven by the cost reduction of solar modules. Economies of scale, technological advancement and increasing automation in production are key forces behind the price reduction in solar modules. The agenda for renewable and clean energy sources is paving the way for the development of solar power. Technological advances in battery storage solutions integrated with solar PV systems provide residential and commercial/industrial end-users with the opportunity to reduce peak periods by delivering their stored power on demand. 

Forbes reports that China is set to become the world's renewable energy superpower, holding the leading position in renewable energy output as well as in related technologies such as electric vehicles. But will energy demand, growing 50% by 2025, be matched by adequate energy supply?

Lawrence Yeo is founder and principal consultant of AsiaBIZ Strategy, a Singapore-based management consulting firm providing Asia market research, business strategy development and export/FDI promotion services.