Transitioning to a low-carbon future
In the developed East Asian economies, the size of the potential is similarly vast. To date, Macquarie is currently developing c. 9GW of renewable energy capacity across Asia. Most of the developments come from developed markets such as Taiwan, Korea and Japan, partnering with world-class developers such as JERA, Total and EnBW.
In South Korea, the South Korean Ministry of Trade, Industry and Energy recently announced it would target 30-35 per cent of its entire energy network to be renewables-powered by 2040 – up from just eight per cent today4. Given that South Korea’s national energy grid has a total generation capacity of around 120GW, even a conservative estimate suggests fulfilling the government’s aim requires new renewables generation of around 30GW over the next two decades. The government also says it will target 12GW of offshore wind by 2030 under its ambitious RE3020 plan.
The Green Investment Group recently signed agreements with global energy company Total to develop 2.3GW of offshore wind projects in Korea, consisting of five projects over three sites. These floating wind farms aim to harness wind energy off the coast of Korea and in deeper water.
Arora believes that much of the infrastructure that will be developed to deliver Korea’s infrastructure will be similarly innovative.
“We’re likely to see hydrogen and fuel cells being used to support dispatchable load and generation across the network,” he explains. “There is also likely to be significant greening of the supply chain as companies adopt initiatives such as RE100 and commit to 100 per cent renewable power. Ultimately, corporate renewable power purchase agreements (PPAs) will take hold, where electricity buyers commit to purchasing their energy in long-term contracts from renewable providers rather than those using fossil fuels.”