The COVID-19 pandemic has created an unprecedented economic and social challenge around the world. Countries and communities are facing economic contractions, rising unemployment rates, capital flow disruption, and growing debt burdens.
|Liming Qiao - Asia director Global Wind Energy Council |
Governments and financial institutions are doing their best to brave through various mitigation strategies and solutions. Green recovery, a new concept in the post-pandemic era, is gaining popularity as the major global economies and even the emerging economies increasingly see the need to tackle climate change issues.
At the COP 26 climate summit in November 2021, great initiatives were born. Nearly 140 countries, representing 88 per cent of the total world emissions, committed to the net zero targets, including Vietnam. The decision on a coal phase-out was also largely agreed upon, even for some developing countries that are highly reliant on coal as their major energy source.
All these developments happened for a reason. The disastrous effect of global warming cannot be further ignored and the time to act is now for the world to maintain a 2-degree rise in global temperatures. With renewable energy being positioned as one of the solutions to climate change, it has evolved to become a mainstream energy source for many countries in the last decade.
The success of renewables is a result of a combination of factors, mainly driven by technology advancement that led to the increase in reliability, efficiency, and cost-reduction of renewable energy across the world. As an example, the offshore wind energy capacity factor has been increased to approximately 50 per cent at a rate of 2.5 per cent a year, which is comparable to some fossil fuel technologies.
Globally, in the past 10 years, wind energy costs have been reduced by as much as 70 per cent. This progress is pointing us in one direction – it is time to deploy renewable energy as the main tool to drive a just and fair energy transition in Asia now.
Post-pandemic recovery is a perfect time for policymakers across the world to re-strategise and formulate various economic recovery plans with energy transition in every step of their considerations. The government should focus on upholding emission standards and targeting public investments to rebuild better for the future.
Wind energy specifically has received massive capital investment in the past decade and has become one of the fastest-growing new industrial sectors worldwide. When strategically deployed, it will be able to provide a long-lasting contribution to the world’s economic recovery and facilitate a just energy transition.
This wind energy can be a major driver of innovation and investment in research and development (R&D) as the industry introduces the next generation of wind energy turbine platforms. From 2015 to 2019 alone, wind energy generated over $652 billion in investments. Ramping up installed wind capacity to above 2TW of capacity by 2030 would create an additional annual investment of $207 billion or over $2 trillion.
It can also be a major creator of skilled jobs and community benefits. International agencies estimate that direct and indirect jobs in wind energy will more than triple from 1.2 million in 2018 to nearly four million globally by 2030 if deployment takes place at the projected rate.
Also within reach is the availability of low-cost finance via stimulus packages provides vital to push to renew various energy infrastructure. In the process of creating a flexible power grid that can withstand large volumes of zero-carbon renewable energy and robust ports infrastructure for offshore wind, the wind industry is fundamentally reshaping the existing infrastructure for wider economic recovery.
It is vital that governments focus on public funding on assets and infrastructure that will facilitate and support the wind industry to accelerate the transition to a low carbon future. There are several recommendations from the wind industry.
First is implementing regulations fit for purpose, including market design that provides long-term visibility and streamlined permitting that enables rapid ramp up of deployment; ensuring that adequate investment flows towards critical infrastructure, including power systems and grid infrastructure, at a low cost of finance and with adherence to sustainability standards; and scaling up green financing for developing economies.
More recommendations include providing strong support for innovation and R&D programmes in order to allow the accelerated deployment of the next generation of wind turbine platforms; introducing carbon pricing on an international basis and promoting a level playing field across energy sources to allow the accelerated deployment of renewables and electrification of sectors; and introducing clear criteria for public and private investment schemes that cause no harm to society and the environment.
We believe Vietnam and other major economies in Asia are on the right track when leading the global net zero movement through a just energy transition. With Vietnam’s growing interest in both onshore and offshore wind, the blooming wind industry will provide solutions to Vietnam’s increasing energy demand, create a valuable supply chain, and generate a long-term competitive workforce in the clean energy sector.