Review and Analysis of Renewable Energy Development in Asian Economies

This paper evaluates two articles on renewable energy generation in Asian economies, discussing barriers and opportunities for development. It highlights the need for government support and international energy trade.

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Articles’ review and analysis – renewable energy development in Asian economies
Abstract
The paper attempts to evaluate the findings of two articles related to renewable energy
generation in Asian economies and to compare the results. While the infrastructural
development of such industries requires high level of investment, there is also lack of
adequate government support. So perhaps an energy trade could distribute the cost among all
the Asian countries. The paper summarizes the findings of the articles (both belonging to
almost same time period) and evaluates them with respect to their relevance to the
policymakers and the economies.
Introduction
With the increasing concerns of green house gasses’ emission and imposition of
carbon pricing, focus is on renewable energy generation. This is more so for the developing
nations where there is a lack of consciousness among the consumers about the benefits of
using renewable energy sources. Also the governments undergo short of funds which are
more required in other sectors like health and education. Also government spend mostly on
non renewable energy or electricity generation. However with the increased awareness of
global warming and pollution issues affecting environmental costs, etc, the Asian nations are
being more active in participating in renewable energy generation. Yet, despite being aware
of the outcome and its impact, the economies are unable to practically shift from fossil fuels
to renewable sources. The paper presents summaries and analysis of two articles in this
respect. These articles point out the barriers needed to overcome for effective power
generation through renewable energy resources. One article discusses effectiveness of energy
trade between Asian countries by investing in production of the energy in which a nation has
comparative advantage. The focus of both articles is the Asian economies and the need and
opportunity for exploring renewable energy sources.

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Summaries
Summary 1
Taggart et al (2012) explores the different factors related to the geography of Asia, the
availability of low emission energy resources and rapid economic growth leading to increased
demands for energy. All these provide an opportunity or scope for considering a Pan-Asian
Energy Infrastructure. At higher levels of aggregation renewable can be managed easily.
Hence a mass level production is essential. The paper supports large scale international
connectivity. In this case Asia comprising of China, Japan, South Korea and ten Association
of Southeast Asian Nation states and Australia defines the scale. DESERTEC Industrial
Initiative (DII) provided a suitable template for this purpose. DII develops Europe and South
Africa’s regional renewable energy resources. Some of these initiatives can be adopted for
Asia as well. The continent has sufficient solar, wind and geothermal resources. The
resources like pumped storage, hydro and natural gas help in loan balancing. One-third of
greenhouse gasses in the world are Asia’s contribution. China has abundance of wind energy
and Australia is marked for their abundance of solar energy. They contribute to 60% of
Asia’s electricity consumption. Applying comparative advantage each nation should focus on
the production it is best or most efficient at (wind in China and solar in Australia). Then
second best resources can be focussed upon for each nation. A Pan Asian infrastructure can
then distribute this. Although there are scopes for ocean energy generation, the respective
technology is not adequately developed. This kind of infrastructure can help reduce consumer
costs and increase supply efficiency. This is done through cross-border energy market
competition. With imposition of carbon pricing and increased connectivity across the borders,
Asian economies have all the reason to eventually shift its reliance to coal, natural gas and
hydro power for base loan power. Unrelated intermittencies in different geographical regions
can cancel out due to this model. However coal can provide a backup capacity for the grids

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and also meet seasonal demand needs. Dispatch of conventional and renewable energy
generation can be estimated by use of software. The study focuses mainly on the impacts,
assuming that each nation will have a suitable internal transmission network and portfolio or
renewable energy generation. This can be set up through internal policy and funding system.
Cost is lowest at 30 GW capacity and reduction of $6.55 billion reduction per year. To
sustain its rapid economic growth Asian nations need to build energy infrastructure while
reducing carbon emissions. The Pan Asian Energy Infrastructure is an example of this. With
14 Asian economies coming together for enhanced international energy trade can bring about
positive results in long run. Such tabula rasa thinking can create long run benefits.
Summary 2
Dulal et al (2013), in their article points out the different barriers to diffusion of
renewable sources of energy technologies in Asian countries. The frameworks for renewable
sources of energy are insufficient in the Asian countries. Hence the authors urge the need for
government intervention from a strategic dimension. The barriers comprise economic, socio-
cultural, institutional and technical factors. On other hand demand for energy is on the rise.
But this increased demand originating from increasing population is currently being met
mostly by fossil fuels. The mains sources are imported fuel and domestically produced coal.
By 2020 India is forecasted to produce five times more carbon compared to the baseline
determined by 2000. The nation’s population growth rate of 1.4% will make it surpass the
population of China by 2040. This is also the case with other Asian nations. In Taiwan
91.29% of energy demand were met by fossil fuels in 2008. There has been a drastic increase
in the number of car owners in Malaysia. Asia’s share is 37.3% in total energy demand of the
world. The three economies responsible mainly for this are China, India and Japan. But
electrification rates are low. If this continues governments will be burden with costs arising
from environment, healthcare and loss of workers’ productivity due to the increasing air

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pollution. The initiatives taken by the market forces cannot be enough to move the economy
towards low emission sources. The lack of technological advancements in these areas is a
prime factor for the backlog. Also governments are providing subsidies for electricity
generation and fossil fuel use but not towards renewable energy generation. The huge cost for
setting up the plant for renewable energy generation necessitates use of government subsidies
and their intervention. China has taken an aggressive policy towards renewable energy
generation. Private sectors are stepping in with government help of concession on loans etc.
In India government invests mostly in hydroelectric power generation. While the up-front
capital costs are high, market size is small in comparison to the investment. So in order to
have large scale diffusion, reaping the scope provided by increasing demand for fuel, there
should be government support and also donors in order to fulfil the costs and upgrade
technologies. Government can provide subsidies, fiscal incentives, renewable energy
certificates (renewable purchase obligations imposed on energy distributor). Institutions can
play a role in promotion of using renewable energy (making customers aware and expanding
its demand).
Comparison of Findings
In the first article by Taggart et al, the findings show how an interconnected
distribution network all over the Asian continent can lead to an efficient energy trade. Cost of
transmission will decrease first and then increase after a network capacity but this increased
cost will be shared by all the countries and hence the burden will not be huge on a single
nation. Such a pan Asian initiative is formulated after the similar model by DII in Europe and
North Africa. However, the same model will be applicable in the Asian economies if
explored properly. There is huge scope for the initiative since Asian nations face increasing
demands. Now this scope factor is also highlighted in the second article by Dulal et al (2013).
Both the articles point out the increasing population resulting in increasing demand for fuels.

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Both articles also suggest that at present majority of the fuel needs are met by fossil fuels.
Cost is a crucial factor while considering generation of renewable energy. This is suggested
by both the studies. While the first study recommends a pan Asian initiative, the second one
focuses upon role of government in supporting the development of renewable energy
industries in every Asian country. Both articles also points out the need for a good
technological infrastructure. The second article points out the need for donor and government
support but also admits that in most countries even government cannot provide the much
needed fund for such production. This article also points out the lack of consumers for this
industry. This is a disadvantage when coupled with the increased cost of capital. The first
article actually shows how to get rid of this problem by a joint effort of all Asian nations.
Evaluation
Both the articles focus on the Asian economies and the need for renewable energy
sources in these economies. One disadvantage is that both the articles are little old when
spoken in present context. Over last few years there has been increased awareness of global
warming and carbon pricing. Hence the governments are becoming more active eventually.
However the findings are important for policy makers, both local and international. The
governments of each Asian economy have the reasons to invest in renewable energy sources.
Cost of capital and transmission of energy can be addressed properly when the cost is
distributed among nations. The findings of both studies are helpful in pointing out the
common barriers of this industry and also the ways to resolve the same. However there is no
suggestion about developing the market for using these sources of energy. This is one of the
prime issues; consumers need to be interested to use renewable energy resources. The second
article highlights the importance of institutional factors in promoting the use of renewable
energy. But there should be persistent efforts to make people accept the use of this energy.

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This will be possible when the price of renewable energy is lesser compared to that of fossil
fuels.

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References
1. Dulal, H.B., Shah, K.U., Sapkota, C.,Uma, G. & B.R. Kandel (2013). Renewable
energy diffusion in Asia: Can it happen without government support? Energy Policy.
2. Taggert, S. James, G., Dong, Z, and C. Russell (2012). The future of renewable linked
by a transnational Asian grid. Proceedings of the IEEE, 100(2), 348-359