Milbank LLP Singapore Project, Energy and Infrastructure Finance partner James Orme participated as a panel speaker on the “What Price Asia’s Energy Transition?” roundtable presented by leading energy and infrastructure finance digital publication Proximo.
The Asia region’s growth has been built on carbon intensive industry with government focus on energy security. With Asia increasingly on the front line of efforts to decarbonise global energy markets, a shift to renewables potentially involves big political and cultural shifts. The panel discussed whether Asia’s financial and power markets are ready for the energy transition.
Regarding the outlook of implementing the ADB-led Energy Transition Mechanism for Asia, Mr. Orme commented that while it “is very exciting for the renewable energy market, its implementation may take time,” suggesting that while private sector investment could hasten growth of clean generation, storage and grid upgrades, the task of repurposing Asia’s coal-fired, base-load energy may come at a slower pace. Understanding the transition as an overall positive while acknowledging the realities of the pace of change, he noted, “the Energy Transition is called a ‘transition’ for a reason and it is not a case of just simply flicking a switch to move from fossil fuels to a carbon neutral energy world.”
With respect to Asian countries that have struggled thus far to add renewables, Mr. Orme suggested that “there are multiple reasons why renewable energy projects can be a challenge to implement – permitting issues, land issues, grid connectivity and offtake credit/security issues to name a few,” but that “countries and projects that find a way to address these issues will likely do well.”
Additional insights were provided by Mr. Orme’s co-panelists representing AIIB, AXA XL, AXIS Insurance, Engie Hydrogen, Moody's Investors Service, Scottish Development International, Standard Chartered, Texel Asia and UKEF.
