Corporations to Dominate Asia’s Energy Transition: Three Bold 2022 Predictions

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Image of Vincent Bakker, Group Controller & Corporate Finance, Entoria Energy Pte Ltd

Prediction #1 – First-Movers Will Force Others into Action (Reluctantly)

Renewable energy used to be the domain of only a few enlightened consumer brands. Today, most consumer brands and other large companies have promised ambitious renewable or carbon reduction targets. On top of that, companies are looking across their supply chain and are thinking – where did my suppliers’ energy come from?

I’ve visited more than one site where solar power was installed simply because core clients demanded it. This trend will continue and shows no sign of stopping. The majority of Asian businesses in 2022 will be pressured to go green – by consumers, corporate customers, or others. We will see entire supply chains rush to transition their energy supply under stakeholder pressure.

Prediction #2 – Greenwashing will be Rampant 

As everybody jumps on the sustainability bandwagon, many do so half-heartedly or reluctantly. Stuck in old-fashioned assumptions on the economy, many companies will look for the easiest way to appease customers yet don’t rock the corporate boat – which is to communicate boldly yet do little, aka greenwashing. Sustainability claims are hard to measure and easy to game, whereas financial claims are heavily governed.

DBS’s ‘bold’ announcement to stop funding coal projects (but only by 2039) fits this trend. Some corporations will go as far as installing solar for the pictures yet continue to pull 95% of their power from traditional sources. Lacking a solid governance or audit framework, I believe 2022 will see much, much more greenwashing than today.

Prediction #3 – Corporations Will Drive Regulatory Framework

Most Asian countries have an outdated regulatory system for electricity due to a state monopoly to buy & sell power, fixed prices, no private electricity sales, and on-site generation is an anomaly. Indonesia, for example, has a regulatory framework a cynic might think is designed to block solar. Yet, many successful Indonesian solar developers are emerging, and new industrial zones are packed with rooftop solar. However, the economic case and sustainability push for renewables cannot be harnessed.

As developers will find ways to work around the system, and corporations lobby to enable renewables, and the public demands cleaner energy and air, governments will adjust. When we consider these adjustments, it becomes telling that PLN has recently pledged to phase out coal. I believe before the end of 2022, and there will be a myriad of enablers for corporate renewable energy, such as direct PPAs in Vietnam, the C&I PPA framework in the Philippines, Indonesia, et cetera.

Final Thoughts

Today’s energy system was built over 50 years ago and has always been a government domain. But whereas governments are taking their time to adjust, corporates are under the immense pressure of both their own targets as well as consumers. For that reason, corporations will continue to measure and report on carbon impact; drive the policy agenda, and lead the development of ever-bigger solar and wind farms.

Written by Vincent Bakker, Group Controller & Corporate Finance, Entoria Energy Pte Ltd

LinkedIn Profile: Vincent Bakker

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