Asia-Pacific Renewable Energy Market - Growth, Trends, COVID-19 Impact and Forecasts (2022 - 2027)

Asia-Pacific Renewable Energy Market - Growth, Trends, COVID-19 Impact and Forecasts (2022 - 2027)

The Asia-Pacific renewable energy market is expected to record a CAGR greater than 9% during the forecast period. The impact of the COVID-19 pandemic was limited on the region's renewable energy industry as many large- and small-scale renewable projects were completed at the same pace in 2021, which added around 75 GW of new capacity to the renewable power generation portfolio. The Asia-Pacific renewable energy market is expected to grow in the coming years. The prominent factors driving the growth are the issues related to elevated grid electricity prices and increasing regional renewable energy investments. However, the market's growth is expected to be hampered by factors like integrating renewables into the primary electricity grid, which involves more challenges than installing them in the distributed form.

Key Highlights

• Solar technology is expected to dominate during the forecast period due to the declining cost of solar power generation.
• Coal-fired power stations, which form a significant part of the region's electricity generation, are ageing and will retire after a certain period. They will not serve the Asia-Pacific in the long run, which creates ample opportunity for the renewable energy market to carve out a significant place in the power generation mix.
• China is expected to dominate the Asia-Pacific renewable energy market during the forecast period due to increasing investment in the sector.

Key Market TrendsSolar Energy is Expected to have Significant Growth in the Market

• The solar energy market in Asia-Pacific is mainly dominated by China. India, China, Australia and Japan have set various regulatory frameworks and policies to develop their renewable energy from multiple sources such as solar and wind power. Feed-in Tariffs (FIT) and Renewable Portfolio Standard (RPS) systems are also adopted in the region to endorse renewable energies.
• The solar energy market in China is on the rise due to the increasing electricity demand. Furthermore, the falling costs of solar power modules, coupled with the government initiatives to increase renewable shares in the total energy mix, are driving the solar power market in the country. In 2021, the solar installed capacity in Asia-Pacific had reached 485.84 GW witnessing an increase of approximately 19% compared to 2020.
• In addition, environmental policies favour renewable energy, the expanding investor interest in the sector, and the advanced technologies have underpinned the solar energy market.
• Some other key factors behind the growth of the solar power market are the declining cost of solar generation, the advancement in battery storage technology and grid operators growing expertise in helping compete with other conventional technologies.
• India and Australia have also set some goals for solar energy as both countries have the potential to generate a substantial amount of solar energy. For instance, In February 2022, the Indian government allocated an additional INR 19,500 crore to support solar PV module manufacturing under the Production Linked Incentive (PLI) scheme.
• Hence, such developments are likely to make Solar Energy the dominant type in the Asia-Pacific renewable energy market during the forecast period.

China is Expected to Dominate in the market

• Due to the large population, the high demand for electricity in China is expected to promote the growth of renewable energy. Many multinational corporations, including Chinese firms, are investing in the growing sector with the help of China’s federal and provincial governments.
• The fastest-growing sectors in China include wind energy, which achieved a new record in 2020 and saw more than 3.06 GW of offshore wind installed in a single year. In 2018, China surpassed the United Kingdom as the world’s leading offshore market in new installations. The country’s long-term target of achieving 5 GW grid-connected offshore wind by 2020 was already reached in 2019, following the installation of 2.4 GW of offshore wind that year. As of 2021, China had a cumulative installed offshore wind capacity of around 26.3 GW, making it the third-highest in the world.
• Other renewable energy projects include the Pumped-storage capacity, which grew by 36.3 GW in 2021 but faced a temporary halt on new projects. This was due to a lack of progress in electricity market reforms, which affected investment returns for energy storage projects and pressure to reduce consumer electricity prices. Due to the COVID-19 pandemic, pumped storage and grid infrastructure projects have been resumed to stimulate economic recovery. Furthermore, reforms and ancillary market development are still required to aid the sector thoroughly.
• The country has also been investing in the construction of major hydro projects, including the 16,000 MW Baihetan project, which is expected to be commissioned in 2022. However, the transmission line for Baihetan, originally planned to start construction in 2019 has not been approved yet. More such projects are expected to be built with increasing investment in large-scale dams in the country.
• The renewable energy installed capacity in the country grew by approximately 17.9% to 1020.23 GW in 2021 from 899.62 GW in 2020. The most significant increase in the renewable energy segment has been seen in the solar energy sector, followed by wind energy. The growth in the installed capacity of renewable energy is expected to remain high in the forecast period.
• Hence, such developments are likely to make China the dominant player in the Asia-Pacific renewable energy market during the forecast period.

Competitive Landscape

The Asia-Pacific renewable energy market is fragmented. The key players in the market include Iberdrola SA, Xinjiang Goldwind Science & Technology Co., Ltd., Vestas Wind Systems AS, Tata Power Company Limited, and Trina Solar Ltd. among others

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