The Growth of Renewable Energy Driving Businesses in ASEAN

The Growth of Renewable Energy Driving Businesses in ASEAN

THIS ARTICLE WAS WRITTEN BY ENERGY WATCH | 25.02.20 | 5:55 PM

The current global landscape is motivating a growing number of companies to commit to a future powered by renewable energy. Through evolving technologies such as rooftop solar, companies are increasingly able to generate their own power and control the sustainability of their electricity supply.

Such technology is not alone in unlocking this renewable future. Innovative green energy tariffs now provide an option for customers, including corporations, to access to electricity supply from renewable sources at fixed rates. The introduction of a green rider tariff in Malaysia offers a clear example of the evolving nature of supply agreements throughout Southeast Asia.

 

The green corporate movement across the globe

The RE100 initiative incorporates more than 200 multinationals around the globe

Meeting global carbon reduction targets will require more than just individual action, but the efforts of government, industry, and citizens together. The RE100 initiative is one program aiming to provide that leadership. Established by not-for-profit organisations The Climate Group and Carbon Disclosure Project (CDP), this ground-breaking global initiative is designed to bring together influential businesses to commit to a future powered by 100% renewable energy.

 

Singapore Energy building

The RE100 initiative incorporates more than 200 multinationals around the globe, with a combined electricity consumption of 228 TWh in 2018. That figure is roughly equivalent to the total electricity consumption of Indonesia. The companies involved represent a global footprint, with almost half (44%) of new members enrolled in 2019 from the Asia Pacific region. RE100 counts regional powerhouse companies such as Singapore’s DBS Bank Ltd., Australia’s ANZ bank, and Malaysian retailer AEON amongst its members.

Like any transition, RE100 represents a journey for the companies involved. The average target year to achieve 100% renewable energy for its members is 2028, with one-in-three members having already achieved 75% renewable energy consumption, and more than 30 having achieved 100% renewables. More than half of companies involved in the RE100 initiative have experienced demonstrable cost savings to date.

 

ASEAN Companies committed to a renewable future 

It’s not just the economic savings from reduced energy costs that make this switch an attractive proposition for companies. A transition to renewable energy can also avoid exposure to regulatory penalties imposed on carbon emissions. Singapore’s recently implemented Carbon Tax offers a timely example, and potential forerunner of such policies throughout the region. Customer expectations play another important part in steering this transformation. 87% of RE100 members highlight that such expectations are an important or very important driver to this change.

Accessing the benefits of renewable energy is not limited to sprawling multinationals. Singaporean real estate company CapitalLand partnered with Sembcorp Power to install 21,240 solar panels on six of its buildings in 2019, targeted to generate more than 10 gigawatt hours of renewable energy annually. This initiative will eliminate 4.3 million kg of CO2 emissions per annum, equivalent to removing 937 cars from the road. Similar initiatives can be seen throughout Southeast Asia.

Iconic Malaysian brand Sunway is embracing renewable energy as part of its own broader sustainable energy commitments. That includes widespread use of solar power throughout its flagship Sunway City development, and other properties. These combined initiatives are expected to reduce the group’s carbon footprint by 40,000 metric tonnes of CO2 between 2015 to 2020, at the same time saving RM15 million in energy costs.

Thai agro-industrial conglomerate Charoen Pokphand Foods also recently inked a deal with clean energy firm Gunkul Engineering in 2018 to install 40MWs of solar PV across its industrial footprint, marking Thailand’s largest rooftop solar project at the time. This agreement is set to reduce the company’s emissions by 28,000 tonnes of CO2 annually, at the same time helping lower the organisation’s energy costs.


Supporting a system of change for greener business

Currently, RE100 companies are working to engage energy ecosystem stakeholders and suppliers to help steer this transformation in collaboration. More than half of its 211 members plan to engage stakeholders such as policy makers or utilities in order to champion better access to renewable energy.

Malaysia will offer a welcome landscape for such transformation, with renewable energy an important pillar of the Malaysia Electricity Supply Industry (MESI) 2.0 reforms. A new green rider tariff will provide customers the opportunity to purchase up to 100% renewable energy, without having to install their own technology or establish a direct contract with a supplier. This offers a platform for RE100 companies and others to meet their electricity needs in a sustainable way.

Renewable Energy Certificates (REC) will further support renewable energy generation by commodifying this resource. This will enable corporate buyers to purchase 1 MWh blocks of green electricity generated from a renewable source under the myGreen+ initiative. Each block of power is certified by the Malaysia Green Energy Tracking System (mGATS) to ensure clear attribution for companies.

Localised generation through renewable assets is also supported under MESI 2.0. On-site renewable energy will provide self-generation, with Net Metering allowing businesses to profit from selling excess energy to the grid. Off-site generation will also be supported, with a transmission fee for wheeling electricity from the point of generation to location of consumption. A financial stimulus for this transition will be available in the form of the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) offer.

Businesses concerned about the upfront capital costs of renewable technology can also benefit from solar leasing and power purchase agreements. There are multiple financial plans with zero capital cost to support this journey. These flexible options are essential in supporting companies of any size towards more sustainable electricity.

Utility companies will play vital role in steering the green energy transformation

Finally, generators will be enabled to sell green electricity direct to large consumers through renewable energy trading. This wholesale market will offer direct access to purchase greener energy for business.

This transition towards greener businesses is a welcome transformation to the energy ecosystem. It will be vital in meeting the region’s key targets of growth, while delivering a decarbonised economy. Utility companies will have a vital role in steering this transformation, backed by strong government support and initiatives.

The emerging opportunities of MESI 2.0 provide a positive roadmap for the future. It’s clear that journey is one that a growing number of businesses wish to take. With more and more companies revealing a budding desire for sustainable electricity, the future of green commercial energy looks set to flourish throughout the region.

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