The Global Green Growth Institute (GGGI) published and presented a special report for the Asian Regional Policy Dialogue (ARPD), which took place on September 7, 2016 during Global Green Growth Week (GGGWeek2016). The Pushing the Envelope on Renewable Energy report assesses why and how some countries within Asia (referred to in this report as Target Countries) have achieved success in attracting RE investment, what are the critical barriers to furthering renewable energy (RE) deployment, and the policy measures and practical interventions that may help to overcome these barriers. The report also highlights how lower technology costs, increased competitiveness of RE, and improved energy storage solutions are making transitioning to RE a reality and a priority.

Estimates show that increasing the global investment in RE will be paramount to achieving the 2°C limit, with figures suggesting a needed RE investment of US$12.1 trillion between now and 2040, almost double the “business as usual” expectation of US$6.9 trillion over the same period. While at the same time, Southeast Asia possesses one of the lowest electrification rates with approximately 20% of its 625 million population living outside of the national grid. Geographical challenges that the Target Countries face further complicate electrification, such as Indonesia and the Philippines having widely dispersed populations across more than 17,000 and 7,000 islands respectively. This report finds that off-grid energy solutions are therefore highly relevant to the remote and rural areas and should be a priority for Target Country governments. To date, however, limited funding options have been available for RE projects and there remains significant potential for designing financing models that can draw in different sources of capital, reduce risk, and achieve scale. To unlock the next phase of growth, Target Countries must look for new ways of enhancing private-sector participation in their respective RE markets.

While some Target Countries like China and India are more advanced in terms of their solar and onshore wind capacities, each country has room for growth in RE. Therefore, all Target Countries can benefit from this report in addressing potential impediments to furthering RE deployment. This reports finds that transitioning to RE could yield multiple green growth benefits, such as reducing dependence on energy imports, strengthening energy security, mitigating greenhouse gas (GHG) emissions as committed to in the Paris Agreement, fueling economic growth, reducing air pollution, creating new employment opportunities, reducing health care costs, and enhancing overall human welfare.

The falling costs of RE technologies are “leveling the playing field” with traditional energy generation sources in Asia. The analysis in this report shows that even with oil and gas prices fluctuating at low levels, wind and solar power are equally affordable without subsidy. Further, the cost of these technologies is predicted to continue to decline over the next few decades, while it is unclear whether the same can be said for fossil fuels. The continual decline in RE technology costs is being driven by increasing RE deployment throughout the world, creating economies of scale in manufacturing processes, as well as advancements in the technology itself.

In this report, the Investment and Policy Solutions Division (IPSD) at GGGI has provided policy tools for countries’ governments, which serves as
a helpful resource for countries creating policies for transitioning towards RE and inclusive green growth. Placing RE at the center of their policy-setting processes will help to meet the targets set by the Sustainable Development Goals, both at the national and international levels.