We maintain our view of robust non-hydropower renewables generation growth in Asia, led largely by solar and wind power. Most Asian markets have committed to carbon net-zero goals and announced them globally at the recent global climate conference, COP26. Notably, Mainland China and India are targeting 2060 and 2070 respectively. Southeast Asian markets Malaysia and Vietnam have targeted net-zero emissions by 2050, and Thailand by 2065-2070. In line with these targets, various Asian governments have introduced solar and wind power project tenders and schemes to encourage decarbonisation of their power sector. Most of these have been met with overwhelming response. Prominently, the Indian Renewable Energy Development Agency reported in September 2021 that its 5GW solar tender was oversubscribed by about 2GW. Additionally, the region is home to markets that have developed manufacturing operations in the solar and wind power sector, which will drive construction costs down. The accelerated growth of non-hydropower renewables is also underpinned by the need to match increasing power demand, as new coal, hydropower and nuclear power projects have been facing increased social and environmental opposition. As a result, we maintain our view of robust non-hydropower renewables generation growth in Asia, with a net increase of 1,962TWh in non-hydropower renewables generation from end-2021 to 2031, at an annual average growth of 8.5%.
Wind power will experience a greater generation growth than solar over the coming decade, following increasing wind turbine manufacturers in Asia and supported by a higher conversion efficiency. This forecast is largely driven by Mainland China, and to a lesser extent India, Australia and Taiwan, China. Over the past decade, Mainland China has been developing its expertise in wind turbine manufacturing. This was facilitated through a supportive policy framework, clear tariff structure and well established manufacturing industry. These factors led to an exponential increase in onshore wind capacity and the rise of prominent wind turbine manufacturers, like Goldwind, Envision, MingYang and Windey. This supported establishment of a strong technological base of wind turbine manufacturing in Mainland China, and subsequent advancements in increasing capacities of individual wind turbines and efficiencies are picking up in Asia. When compared to solar, wind capacity growth is expected to be lower; however, with the higher efficiencies and capacity factors in wind, generation growth will be greater. Additionally, ambitious goals of Asian markets for wind power will further support wind power growth. Mainland China aims for 1.2TW in wind capacity by 2030, while Vietnam and Taiwan, China are aiming for 21GW by 2045 and additional 15GW by 2035 respectively. As such, we expect wind power generation to more than double from 718TWh as of end-2021 to 1,668TWh in 2031.
In spite of Asia’s strong renewables growth, coal power generation will remain the dominant power supply source, due to solar and wind power's intermittent supply nature. Solar and wind power’s limitation is that it generates electricity only when the sun is shining or when the wind is blowing. In contrast, conventional thermal power can be generated anytime as long as there is fuel present. With current energy storage systems still limited in scale to combat solar and wind powers' intermittency, by storing electricity when it is being generated and supplying electricity when it is not, conventional thermal will still remain Asia’s dominant power supply. Additionally, coal remains the cheapest form of reliable electricity supply in the region. This makes it Asia’s main choice for power generation, and will continue to do so. More recently, with increasing climate commitments by Asian markets, we expect coal generation to experience a slower growth in the coming decade. This will allow for non-hydropower renewables to slowly chip away at coal generation’s share of the power mix. Furthermore, there are increasing upside risks to non-hydropower renewables, with an increasing interest in the green hydrogen sector for hydrogen fuel cells. Overall, we expect coal’s share of the power mix to drop from an estimated 55% in 2021 to 44% in 2031, while non-hydropower renewables generation will increase in its share of the power mix from 13% in 2021 to 21% in 2031.