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Across the world, and South-East Asia is no exception, countries and corporate enterprises are setting ambitious targets to reduce their carbon footprint and increase the penetration of renewable energy resources in their energy mix.
In Europe or in the US, and to some extent also in China, a from regulatory perspective several renewable energy options are available to choose from, and corporate can base their strategic energy sourcing policy on a cost-benefit assessment of known entities. However many multinational companies have big manufacturing bases in South-East Asia countries, both for self-consumption (ASEAN is home to 600+ million people – like the European Union) and for export Europe and US.
In ASEAN currently the options to source renewable energy are limited – so for corporates it’s extremely challenging to achieve their sustainability goals. So how should corporates approach renewable energy sourcing in Asia Pacific? The answer is aptly provided by a Chinese proverb: a journey of a thousand miles begins with a single step.
If the multinational corporate strategic purchasing officer is looking at signing a single contract that will guarantee 100% of his company’s supply of renewable energy, he is destined for a long and disappointing wait. Rather, the most effective approach is to start engaging, start doing whatever’s possible in the circumstances given the country, the regulatory environment, the pricing level, the specificities of his energy demand and proceed incrementally, step by step.
Rooftop : Solarizing the rooftop is typically the first step – nowadays it’s possible in practically all countries, local regulatory limitations permitting, and it’s the simplest way to introduce renewables in the energy mix because thanks to PPA-type agreement with a solar developer, it requires zero CAPEX and allows to reduce the monthly electricity spend. It is out of necessity a long-term agreement (the developer needs to recover the cost of investment in the PV system on your roof), typically 20 years, and the only limitation it has is that, especially in the case of intensive energy consumption industries, the amount of green energy which can be produced on the roof is no more than 15-20% of the total energy consumption. It’s a first step.
RECs : see specific entry in the Knowledge Centre
Off-site PPA: Currently these are available only in a few countries in Asia Pacific – Japan, Taiwan, South Korea and Singapore. Essentially, it is a framework contract that allows a corporate customer to source renewable energy from solar/wind installations located elsewhere, through the electricity grid.