Asean renewable energy sector gets boost from China’s solar projects, faces hurdle of fossil fuels reliance
“The result is that China has a dramatically larger capacity to export solar modules as 2024 and 2025 unfold, and the resulting global oversupply is pushing [solar] module prices down dramatically,” said Tim Buckley, Sydney-based director of Climate Energy Finance.
China’s export prices of modules have halved, and their efficiencies have improved dramatically because of investments in research and development, he said.
“There is sort of a buyer’s market which is being created, characterised by an oversupply of modules [because of China]. So this now makes it easier for the other Asian countries to look at solar as a viable option to expand their respective power systems,” said Aditya Lolla, the Asia Programme Director of energy think tank Ember.
But the challenges for other Asian countries are “very different” to China’s because of a lack of access to finance and mature markets for renewables, as well as inadequate grid infrastructure and battery storage systems, he added.
China has been developing and financing solar power projects in other Asian countries, especially in Southeast Asia.
As China invests more in overseas renewable projects, its supply of parts has helped companies in the region to build their capacities.
China’s financing in this area in the Asia-Pacific has mostly been on a short-term basis as opposed to a more longer-term financing, said Mike Lim, partner at TRIREC, a Singapore-based venture capital firm involved in decarbonisation.
The regulatory environment in many Asian markets – where local investors have certain advantages or entitlements – also poses hurdles, he said. There is a lack of clear and consistent policy and incentives for renewable energy in the region, he added.
Many of these nations’