We live in a connected world, where global challenges demand a committed international response. 2021 marks a crossroads in our shared climate journey, with global cooperation an increasingly important part of our joint battle against climate change. This not only means supporting positive moves to deepen the green energy transition, but building an ecosystem of both technology and investment that can deliver fit-for-purpose local solutions to this pressing global challenge.
Malaysia has evidenced clear recognition of this need, with shared national commitments under the Paris Climate Agreement to reduce its greenhouse gas emissions (GHG) intensity of GDP by 35% relative to 2005 levels by 2030.
Organisations like the World Economic Forum (WEF) will be fundamental to this journey, offering both a platform for discussion and a forum to generate shared commitment. Minister Mustapa Mohamed, Minister in the Prime Minister’s Department for Economic Affairs, recently joined a panel of esteemed guests to discuss this topic, in Accelerating Clean Energy Transitions.
Nandita Parshad, Managing Director, Sustainable Infrastructure Group, European Bank for Reconstruction and Development (EBRD), acting as host, introduced important context to this discussion.
“We are at a critical moment in our efforts to address climate change.”
“We are at a critical moment in our efforts to address climate change. Transformation of the energy sector that contributes 75% of global emissions is crucial to these efforts. And finance is crucial to drive this. If we fail the finance challenge, we fail the energy transition challenge. And if we fail that, we fail the climate challenge with catastrophic consequences, especially in developing countries where the world’s poorest live.”
Driving change will require remarkable investments according to Nandita, highlighting that “investments in trillions are needed to scale up clean power. And very importantly transition way from fossil fuels. The majority of this is needed in emerging markets.”
It is clear that such investment can deliver valuable returns, with the International Energy Agency estimating that investing in a sustainable recovery from COVID-19 could deliver a 3.5% uplift to global GDP. That will require vision and planning by emerging nations like Malaysia.
“We are working on the guideline framework for the next 20 years, from this year until 2040. A 20-year pathway we are pushing… there’s a deep commitment on behalf of the Malaysian government to move forward, which is a big help. And in our various engagements with many stakeholders in the last ten months, we have found a lot of commitment to support the green agenda for sustainable growth,” said Mustapa Mohamed.
Public support is essential to ensure engagement with the green energy transition, at the same time motivating and encouraging decision makers. Major global markets such as India and China will be critical to this success, with spokespersons from these pivotal countries offering welcome insight to the panel discussion.
Xin Baoan, Executive Chairman, State Grid Corporation of China, is responsible for the world’s largest electricity grid, which will be vital in meeting China’s stated ambitions of reaching net-zero carbon no later than 2060.
“In the next five years State Grid will be investing on average more than USD70bil per year in order to promote grid upgrades, and speed up building of the energy internet. And also help the development of clean energy consumption,” said Xin Baoan.
China aims to achieve combined wind and solar capacity of 1.2 billion kilowatt hours by 2030, creating focused need for this investment. “As we know, wind power and solar power are random and volatile, when they are feeding into the power grid with high proportion and large scale they will bring headaches such as power imbalance, power consumption, safe and stable control of the power grid.”
The importance of grid transformation cannot be overlooked in the energy transition. Nations like Malaysia are also facing the need for essential grid investment to enable better adoption of renewable energy. Substantial energy storage will be a major part of the solution according to Xin Baoan.
“Currently we have 51 energy storage stations, we have also created a cloud platform for the clean energy, and we have connected (…) new energy stations and reached 450 million kilowatt.. we [also] know that the consumption side is showcasing new tendencies featuring interaction, diversification, and electrification, so building an internet will help to make the grid smarter, will help coordinate interaction among power source, grid, load, and storage, and effectively support the connections with all sorts of facilities and we will also support adjustable loading resources.”
India is another country which will have a major impact on the global climate journey, behind only China (1st) and USA (2nd) in GHG emissions. Gurdeep Singh, Chairman and Managing Director, NTPC Ltd, highlighted some ambitious commitments the Indian Government had made, including a target to achieve 450GW renewable installed capacity by 2030. He noted the importance of investment in supporting that journey.
“This will require all kinds of inputs, all kind of works to be done on the ground, on the policy front, and more so importantly (…) financial instruments which can come. In the country there is no restriction on foreign companies, they can invest 100% as far as the power objective is concerned… more and more focus should be on trying to come and invest.”
This approach can offer valuable access to both investment capital and talent according to the panellists, allowing public partners to leverage private sector expertise to deploy appropriate energy transition solutions.
Emma FitzGerald, Chief Executive Officer, Puma Energy International SA reinforced this message. “There is no template that we can roll out across multiple markets… every market is slightly different, both in terms of its structure, and the needs of the customers and communities.
It’s important that we have the right conversations with all the different stakeholders
So essentially it’s important that we have the right conversations with all the different stakeholders… to identify first of all what the solutions we are that we need to find, and secondly how we put them in place and attract the right finance at the right returns.”
“One of the key things we have to be able to do in that context is create markets which are clear cut and transparent in terms of how they operate, so we can attract the right investment,” continued Emma, stressing a point echoed by many in the panel.
“I think firm commitment by the government [is essential], this is happening in India, Malaysia, China, and of course response from stakeholders, in particular the private sector. A lot of funding is coming from the private sector, and we hope this will make things happen,” concluded Mustapa Mohamed.
Mustapa Mohamed makes clear Malaysia’s commitment to a green energy transition. With a new 20-year plan, it could be positioned as an exemplar of emerging market transition. Meeting these needs will require both local investment, and global collaboration, showcasing the critical value of cooperation in achieving our shared climate aims.