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| Written by Terry Lacey | |
| Monday, 19 October 2009 | |
 While the developed world dithers, Asia seeks to get on with it
There is a growing need for Asian countries to get access to international finance and technology, especially in the wake of the global economic slowdown, to meet their goals in clean energy and efficiency. Although China is likely to put more than US$20 billion into clean energy and energy efficiency this year, and the China, India and Asean clean energy markets together will easily exceed US$25 billion, Asian spending on clean energy slumped by an estimated 70 percent in the first quarter of 2009 as a result of the credit crisis and falling oil prices, which cut into the need for alternative fuels. Even without international funding, the region's spending goals total more than 21 percent of the global market. Some 75 percent of the world's sustainable energy projects originate in Asia, creating pollution credits for European and Japanese industry to buy to meet Kyoto Protocol emissions credits. Indonesia wants to commit more than US$3 billion per year to clean energy, with India's total rising to US$3.7 billion in 2008. The combined China and Asean clean energy market is headed towards more than US$30 billion a year by 2010. But it is difficult at this point to see what the Copenhagen summit in December will accomplish in terms of the need to make these new clean energy markets work bigger and better. The odds are slim and getting slimmer. Some 1,500 delegates from 180 countries met in Bangkok from September 28 to October 9 in an attempt to hammer out details of the United Nations pact to be presented in Copenhagen. By all accounts, they failed. There was no commitment from the rich nations to commit to a formal text – as there hasn't been in three successive meetings in Bonn in April, June and August. A last session is to be held in Barcelona in the first week of November amid growing gloom. Even without an agreement, clean energy investments world-wide may reach US$115 billion this year with China dominating expenditure on clean energy and energy efficiency in the Asia Pacific region. China spent US$4.5 billion on such projects in the second quarter of 2009, rising to US$7.1 in the third according to Bloomberg. Financier George Soros announced on October 10 that he would commit US$1 billion to clean energy technology and donate another US$100 million to an advisory group to aid policymakers. But Soros aside, the global credit crisis and the ensuing recession has put a severe dent in financing. The uncertain buildup to the Copenhagen climate change summit has deterred clean power investors from project commitments while awaiting clearer messages on carbon credit markets, emissions cuts and the financing of clean energy technology transfers. While refusing – at least so far – to commit to any limits on carbon emissions, both China and India are moving ahead rapidly on technology development. China is pushing ahead so fast because its current efforts are almost self-financing and like India it is manufacturing its own clean technology equipment, a crucial necessity. The country has been struggling to reduce its energy consumption per unit of gross domestic product but has only been partly successful. Despite an earlier vow to reduce consumption by 20 percent per 1,000 yuan of GDP from 2005, it so far has managed to meet only about a quarter of the five-year target. Its inefficient, Stalin-era heavy industries are difficult to modernize. It takes 20 percent more energy – all of it coal-fired – to produce a ton of steel compared with more efficient industries in western countries, for instance. Jun Ying, chief representative for China of the London-based New Energy Finance carbon credit agency said in news reports that "New stimulus money is flowing into the project side of Chinese renewable energy, especially for wind and solar projects." He confirmed it's the Chinese state banks that are funding this. "Most of these projects are being built with generous low-interest loans from state-owned banks," he said. China expects to have 500 gigawatts of wind power and 500 gigawatts of hydropower capacity by 2050 compared with only 12.2 gigawatts for both at the end of last year, according to Jiang Kejun, director of research at the National development and Reform Commission's Energy Research Institute. So China is moving fast. India, while also refusing to commit to any limits on carbon emissions, is also pushing ahead. Sustainable energy investment in India is up 12 percent since 2007. The country aims to produce 5 percent of its energy from renewable sources by 2010, with investment centered on wind, solar, small hydro and wind projects and biomass according to Global Trends in Sustainable Energy in early 2009. Indonesia's state-backed utilities and state banks are making the running, backed by development funds from the US$100 billion annual state budget. But so far, Indonesia has been tardy both in developing conventional energy sources and clean ones. Its ambitious "fast-track" plan to boost energy consumption is at least two years behind schedule, bogged down in difficulty in finding loan commitments, corruption and poor planning and committed to major construction of coal-fired plants. Indonesia needs at least 55 gigawatts of power by 2015, not counting clean energy for 20,000 captive private sector power stations plus rural electrification for 82 million Indonesians who are not yet grid-connected. Indonesian state-backed electricity utility PLN President Director Fahmi Mochtar confirmed to reporters in August that PLN was launching its second 10,000 megawatts power expansion program, to be 74 percent based on clean energy (48 percent geothermal, 14 percent natural gas and 12 percent from run-of-river hydro). This needs at least US$15 billion over three years and improved risk-sharing and deal-structuring to finance a massive leap forward, especially for the under-developed geothermal sector with its high drilling risks. At the G20 Summit in Pittsburgh in September, Indonesian President Susilo Bambang Yudhoyono announced that Indonesia – one of the world's largest carbon dioxide producers because of deforestation -- intends emissions reductions of 26 percent by 2020 compared to business as usual. He also said Indonesia would do more if additional financing could be provided by developed countries. The Asian Development Bank has become an aggressive sponsor of clean energy projects, dedicating more than $1billion to cut emissions in Asia by sponsoring energy-reduction projects in light of the slowdown in private funds and commercial bank lending. It is questionable, however, whether the developed world will have any funds available for clean energy development in developing countries. The United States and the Eurozone are trillions of dollars in deficit and mired in the economic downturn despite the fact that officially the recession has been declared over by the US Federal Reserve. So Asian clean energy markets are full of eastern promise and now need practical programs and projects and the money to operate them. It may be a long time in coming. Terry Lacey is a development economist who writes from Jakarta on modernization in the Muslim world, investment and trade relations Comments
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written by Reader from Hong Kong , October 20, 2009 |
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I recently noticed a company called Enviro Energy Holdings Ltd, a Hong Kong stock listed company number the trading number of 8182 that is specially involved in clean energy projects. Web page of www.enviro-energy.com.hk.
Seems that this company has two very good projects. So good, that even Legg Maison purchased over 6% share holdings.
Does anyone know more about this company? Sounds too good to be true, but tempting to buy shares to save the world (and my investment portfolio too)
Any professional expats out there to offer free investment advice to boost my investment confidence level?
Reader Bob