Policy Instruments Support Renewable Energy Deployment in Asia-Pacific

Monday 12 May 2014, Amsterdam

Burgeoning energy demand, limited fossil fuel reserves, and global warming concerns have forced countries in the Asia-Pacific region to increase the share of renewable energy in their energy mix. The region has made significant investment in renewable energy projects in recent years, and this is expected to continue in future. Many countries have adopted policy instruments such as Feed-in Tariffs (FiTs), Renewable Portfolio Standards (RPS), soft loans and tax incentives to promote renewable energy. Most of the government measures that have been introduced have received a positive response and have played a vital role in the development of the renewable energy industry.

Investment in renewable energy projects increased following the introduction of the Kyoto Protocol in 1997. This protocol sets binding obligations for industrialized countries to reduce greenhouse gas emissions by 5% against 1990 levels by 2012 (the first commitment period) and by 18% against 1990 levels by 2020 (the second commitment period).

Australia, Japan and New Zealand have signed the Kyoto Protocol, thereby committing to the reduction of carbon emissions. India and China, as participants in the Copenhagen Accord in 2009, pledged to work towards respective binding carbon intensity reduction targets of 20–25% and 40–45% by 2020, in comparison with 2005 levels.

The following table provides details of the different policy measures in place for the promotion of renewable energy in nations in the Asia-Pacific region.

China is rapidly becoming a major player in the global renewable energy industry. In recent years, the country has developed its wind turbine and solar Photovoltaic (PV) manufacturing industries. The government has shown commitment to renewable energy through the introduction of a series of new laws and financial support measures.

India and Australia have also implemented a number of support measures for the development of renewable energy; the efficiency with which these measures are implemented will determine future growth in both countries. The new programs related to solar power development announced in India are expected to significantly increase the share of solar power in the renewable energy portfolio.

The Japanese government has shown commitment to renewables through the introduction of a FiT for renewable energy. It also announced plans to entirely rebuild its energy policy following the Fukushima nuclear disaster in March 2011. The policy now recommends gradually reducing dependence upon nuclear power while enhancing the share of renewable energy and efficient fossil-fuel power generation.

Thailand, which has announced a number of measures to support the growth of its renewable industry, is aiming for renewable energy to account for a 25% of overall power within the next 10 years.


China: Leading Renewable Energy Industry in Asia-Pacific Region in 2012

China has emerged as a major player in the global renewable energy industry and is the leading country in the Asia-Pacific region.

In 2011, the government announced plans in its 12th five-year plan (2011–2015) to promote the development of new energy industries, and set ambitious targets for renewable energy, including the installation of 70 Gigawatts (GW) of wind power capacity, 20 GW of solar power and 7.5 GW of biomass power by 2015, which is expected to mean that renewable sources will account for 11.3% of the country’s electricity in 2015, increasing to 15% in 2020.

China has become the largest wind power market in the world, with a total installed capacity of 75.6 GW in 2012, overtaking the US in 2011. The growth of the wind power market over recent years has been driven by new installations, including a record 13.8 GW addition of wind capacity in 2009, which was surpassed in 2010 with the addition of 18.9 GW. China is also trying to establish itself as a major player in the solar power industry, and the government has announced major support measures such as the Golden Sun Program, the Building Integrated PV (BIPV) subsidy program, and FiTs for solar projects. The government has also initiated various measures to promote small hydro and biomass facilities. These moves are expected to promote renewable energy development in China and increase investment in the sector.