There’s definitely chatter on Renewables these days.
Green Investing. Clean Technology. Responsible Investing. Renewable Energy. Reducing Emissions. Solar Panels. Wind Turbines. Water Power. Rechargeable Batteries. Electric Cars.
What are these buzz words? It’s turning out to be quite a movement. Environmental/health advocacy meets corporate responsibility meets political commitment to a sustainable future. It also means, despite the low oil price, there’s a revolution brewing against conventional energy (oil, gas, coal) for a eco-friendly and economically feasible alternative.
Asia is definitely on board. You don’t need to be Lee Kuan Yew to have the foresight to see the effect of a burgeoning consumptive audience crippling itself in its own demand for energy. Carbon credits in China were no match for the pollution blanketing its cities as fast as its economic growth. Emissions, industrial pollution, and consumer pollution has put its cities like Beijing on the map again and again as one of the most harmful cities to breath in. Ever. But that is changing as awareness and reform is paving the way for China’s future. It is adeptly investing in cleaner industrial practices, technology, and cleaner energy sources for the future of its 1.4 billion consumers. The change has been so rapid that by 2015, China housed 24% of the world’s renewable power capacity, more than even the US.
Singapore is the starlet of the region in its approach to renewables and cleaner technology. This small jungle island has some of the strongest government support in its quest for a cleaner, greener and more self-sustaining future. The effects are visible everywhere, fueled by government backing: green parks, green energy, developers incorporating living green walls on the sides of high rises, coupled with optimizing building energy, electric alternatives, the smartgrid, solar generation, limiting industry waste and more efficient waste management. According to the IEA Key World Energy Statistics in 2014, Singapore has one of the lowest emissions intensity globally. And it wants to get even lower. Singapore pledged its National Climate Change Strategy to reduce emissions by 36% from 2005 levels by 2030. How will they do that?! Deputy Prime Minister Teo Chee Hean, chairman of the Inter-Ministerial Committee on Climate Change states, “The stabilisation of our emissions with the aim of peaking around 2030 requires serious efforts by everyone. We have to strive for higher levels of energy efficiency, including deployment of best-in-class technologies”
In the push for best-in-class technologies, Singapore government has devised multiple layers and schemes in grants, dollar for dollar matching, concessions and its own initiatives to foster a welcoming environment, a push seemingly unmatched for renewable related investment and companies. “The overall landscape is definitely moving towards more sustainable investing, and more focused CSR (corporate social responsibility) related to the environment. From renewable power generation, energy storage, efficiency and management and recycling, interesting new technologies and business models have been coming on stream in the recent years. You can now do your part to save the environment and also generate healthy investment returns at the same time!” says Melvyn Yeo, co-founder of TRIREC, a Singapore investment firm focused on renewable energy and cleantech sector.
One of their investments was Sunseap Group, which won the bid for the first SolarNova project offered by tender through the Economic Development Board to install solar photovoltaic systems at eight sites operated by the Ministry of Home Affairs and Public Utility Board covering about 900 HDB blocks, the first of its kind and heralded as a solar success story to be replicated. This first tender award is for almost 80MW to be installed, and under the SolarNova program, the target is for at least 350MW of solar capacity installed by 2020.
From one island’s effort to another, the Mauritius government is also heavily supporting renewable energy in a solar panel park station on the island and successfully feeding power to power distribution network at first megawatt-scale PV power plant in Mauritius. It will produce approximately 24 gigawatt-hours of clean energy a year and save approximately 15,000 tonnes of CO2 emissions annually. “We see the project as much more than the generation of clean energy to be fed into the grid. This project shows the philosophy of the Government of Mauritius,” said Mr. Sham Seetaram, Director of SARAKO, “The support of a project, whether it be by the government or a partner, is crucial to the operating success. We look to seek collaborative solar projects in the future.”
Regionally in Asia, solar still tends to be the energy of choice with projects in Thailand, Vietnam, Indonesia, and the Philippines, but foreign investment into wind turbines and water power is broadening the focus. Modi has been quite supportive within India, with large clearing projects in both Rajasthan and Gujarat for power lines that will plug into the grid and generate renewable energy. Indonesia has further developed into localized power generation through targeted smaller hydroelectric projects in rivers and dams to supply the surrounding area’s energy needs. Global Tower Solutions is a company that localizes power generation even further, providing reliable renewable energy solutions such as solar panels and wind turbines for individual telecom towers in areas where they are traditionally powered by diesel or an unstable electric grid.
After the Paris agreement of 195 nations, and the subsequent Modi/Hollande-led Solar Alliance of 120 nations, renewables saw a surge in global attention. The story that renewables didn’t make economic sense was refuted by the overwhelming support from leaders and its policy grants and advocacy to increase appetite and participation for renewables as an investable asset class. Valuation for clean energy stocks soared days after the Paris agreement, including REC Silicon that manufactures basic materials for solar panels.
Tag Lines for the future? Clean Energy Vehicles. Low Emissions Powered. Non-pollutive Energy. Regenerative Power. Environment fueled. Economic growth alongside Clean Air and Drinkable Water.
We can all dream. It’s a nice one.
Debbie Chien is a Principal at Society of Family Offices.