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GSR 2015

29 01 RENEWABLES 2015 GLOBAL STATUS REPORT SIDEBAR 1. REGIONAL SPOTLIGHT: EAST ASIA As a region, East Asia has become the world’s largest consumer and producer of renewable energy, as well as the largest investor in renewable technologies. East Asia comprises the major economies of Northeast Asia (China, Japan, South Korea, and Taiwan) and the fast-growing economies of Southeast Asia (such as Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam). Renewable energy has become vital to East Asia for various reasons. The region is the world’s largest emitter of carbon; many of its societies are highly susceptible to climate change risks; and pollution in its burgeoning cities is causing millions of premature deaths annually. Renewables not only bring greatly needed clean energy options to East Asia, but also help to mitigate energy supply security risk, especially due to the region’s growing import dependence on fossil fuels. Most East Asian countries also view renewable energy as a key strategic component of new industrial policies. By 2013, East Asia’s total renewable power generating capacity was an estimated 457 GW (more than 29% of the global total), and China accounted for over 80% of this amount. Hydropower represented a significant proportion of the total (322 GW, with 260 GW in China), but wind energy has come to the fore as a major sector, driven predominantly by China. China and Japan were the world’s top two solar PV markets; the Philippines and Indonesia were the world’s second and third largest geothermal power generators, respectively; and South Korea led in tidal barrage energy. East Asia also is a world leader in the renewable heat sector. China has been responsible for over 80% of solar water heater (SWH) capacity additions in recent years and currently hosts around two thirds of the global total. In biofuels, however, East Asia lags behind the big global players, accounting for just some 3% of world ethanol production and 12% of biodiesel production. Similarly impressive figures can be found on equipment production. A decade ago, China made just 5% of the world’s solar PV modules; now it makes two thirds. China manufactures aroundthreequartersofglobalSWHs.Thecountryalsoproduces more wind turbines (large and small) than any other country. China has helped to drive down the costs of a range of renewable energy products. Japanese, South Korean, and Taiwanese firms are among the technology leaders in many sectors—including solar PV, ocean, and geothermal energy—and China is rapidly developing its indigenous capacity for technology innovation across the renewables spectrum. A key trend across the region is for governments to integrate renewable energy into long-term, multi-sector strategies and policies. South Korea’s Green Growth Strategy, Japan’s New Growth Strategy, China’s 12th Five-Year Plan, Vietnam’s Green GrowthStrategy,andthe10thMalaysiaPlanallincludeambitious programmes of renewables development. Furthermore, energy state-owned enterprises in the region are key players in renewables installation, equipment production, supporting infrastructure, new technology development, and investment. The credibility of state plans has been called into question, however, as a result of underperformance. Some national targets have been missed repeatedly (e.g., South Korea and Japan), some governments have been accused (mainly domestically) of lacking ambition in key sectors (Japan, South Korea, Taiwan, Singapore), and some long-term plans have been frequently revised (e.g., Thailand has launched three long-term “alternative energy” strategies in just six years). Nevertheless, these same plans have introduced well-funded policy incentives and other forms of state support, as well as improved legislative frameworks at the national, regional, and local levels; these developments have helped catalyse the rapid deployment of renewable energy in East Asia over the last decade. Feed-in tariffs, auctions, enabling building codes, and renewable portfolio standards have become increasingly popular policy instruments. A growing number of city and provincial governments are also devising their own strategies and policies on renewables, promoting deployment at the local level. Fast-growing and substantial energy demand, diverse commercial opportunities, and dynamic entrepreneurism have further spurred renewable energy market and industry development. East Asia has a population of 2.2 billion and remains the world’s fastest-growing regional economy. Its huge potential for both distributed generation and utility-scale renewable energy installations is being exploited in urban and rural areas alike. Although state-owned enterprises dominate most value-chain aspects of China’s renewables industry, a dynamic private sector has emerged in solar and wind energy equipment manufacturing with firms such as Sinovel, Goldwind, Trina, and Yingli—all of which are now world leaders. Various challenges lie ahead for further scaling up renewables in East Asia. Large-scale hydropower has proved highly controversial in China and Southeast Asia, and is reaching its exploitable potential. Transmission infrastructure bottlenecks continue to impede wind energy development in China and elsewhere in the region. And contentious issues concerning environmental sustainability and food security are arising in the bioenergy sector. Ongoing coal capacity expansion in the region might come at the expense of even greater renewable energy deployment. In addition, recent trade disputes over China’s exports of solar PV modules, wind turbines, and rare earth minerals have arisen due to claims of “unfair” state interventions, and future disputes appear likely as global competition intensifies in rapidly growing sectors such as wind and solar energy. Competitive East Asian firms are likely to benefit significantly, however, if the World Trade Organization’s Environmental Goods Agreement is signed and its membership expanded. Finally, further engaging East Asian society in the clean energy revolution will be critical if the region is to rely less on the top-down, state-led promotion of renewables development. Source: See Endnote 23 for this section.

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