The impact of climate change is no joke, affecting the world with rising heat indexes and increasingly severe typhoons and hurricanes. To avoid the worst repercussions, change is now imperative—not just an option—especially in sectors like the solar and wind energy supply chain.”
Responsible for almost 90% of carbon dioxide emissions and 75% of greenhouse gas emissions globally, fossil fuels are still accountable for 80% of the energy generation worldwide. To decrease these emissions by 45% by 2030 and achieve net zero by 2050, as set by the Paris Agreement, alternative sources of energy that are sustainable, cheap, and reliable need to be tapped.
Renewable energy comes from different sources, but for the Asia Pacific, the Institute for Energy Economics and Financial Analysis (IEEFA) reported that offshore wind and solar photovoltaic have the potential to make major contributions to regional energy transition initiatives and can generate huge, large-scale economic prospects.
The report said that the supply chains of solar and offshore wind power projects can generate 873 gigawatts of clean energy, and the investment potential surpasses $1.1 trillion through 2050. Investments in these energy resources can be the key to more job opportunities and production localization that can help countries’ economies while achieving lesser carbon emissions.
Many Asia Pacific countries are underestimating this untapped potential. Even though there are excellent solar and wind energy resources, their planned capacity actions are still minimal. For example, despite its capacity Indonesia has one of the smaller solar bases, and Japan, even with the best wind resources worldwide, intends to account for less than 5% of the country’s total electricity demand by 2050.
The report examines seven Asian markets: Indonesia, the Philippines, Taiwan, Vietnam, South Korea, Japan, and Malaysia. According to IEEFA projections, solar photovoltaics plans aim for 634 GW of capacity by 2050, requiring an investment of $394 billion, of which $346 billion may support local supplier chains. Meanwhile, offshore wind with 239 GW of capacity, offers a $621 billion opportunity, with $425 billion expected to be localized.
Furthermore, the marine industry may get investments ranging from $72 to $97 billion, primarily from regional sources, for offshore wind installation and servicing boats.
When considering these resources, policymakers often concentrate on the turbines and panels since they are the most obvious “green technology” investment. However, these projects’ supply chains are far broader, including services, infrastructure, materials, and logistics that add long-term economic value.
Countries should also focus on local supply chains because it can drive more significant economic growth. The balance of systems, which consists of all the components for offshore wind and solar account for 75% and 68% of the project budget, respectively. For the next 25 years from now, this could be a great business potential for manufacturers and contractors.
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Renewable energy – powering a safer future