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From coal to clean: accelerating Asia's renewable energy transition

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23 Nov, 2024

This post was originally published on Sustainability Matters

With world leaders, climate and environmental scientists and business leaders having gathered in Baku for COP29 — the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) — we’ve been advocating that this transformation poses significant challenges while simultaneously providing opportunities for growth, resilience and innovation.

The role of coal and the need for change

Coal remains the largest contributor to climate change, generating 35% of global electricity as of 2023. The International Energy Agency’s (IEA) net-zero scenario calls for OECD countries to reduce coal’s share in power generation to 14% by 2030, with a complete global phase-out of unabated coal by 2040.

This underscores the fact that achieving global climate goals hinges on a viable energy transition strategy, particularly in Asia, where demand continues to surge.

The need for decarbonisation is stark: Asia’s carbon emissions now account for over half of the global total. The young age of Asia’s coal fleet — about 13 years on average — complicates the shift to renewables, with significant investments still tied up in coal plants. According to the World Economic Forum, policies that streamline and incentivise plant closures or conversions can accelerate the pace of transition.

Economic and environmental challenge

Transitioning to renewables in Asia requires not only technological shifts but also robust financial mechanisms.

We need financing models that incorporate public and private capital, with mechanisms like loans and grants making clean energy more accessible and competitive.

Countries like Vietnam face hurdles such as rigid power purchase agreements that protect coal plants from competition. Overcoming these barriers demands innovative financing, potentially reducing the cost of capital to make renewable projects more viable and less risky.

The move from coal to renewables also requires securing grid stability and resilience. The diversity of resources across Asia — from hydropower in Southeast Asia to solar in China — necessitates tailored strategies for integrating these resources into a cohesive and stable energy grid. GHD is actively involved in helping clients to navigate these complexities by advising on technical planning, decommissioning and the use of renewables like solar and wind.

Action steps to help Asia transform from coal to clean:

  • Develop robust financing models: Facilitate access to capital with a mix of loans, grants and public–private partnerships to make renewable energy more competitive and scalable.
  • Strengthen policy frameworks: Governments should adopt supportive policies to encourage investment, ease regulatory restrictions and provide incentives for renewable energy projects.
  • Invest in grid resilience and smart technology: Modernising grid infrastructure, including smart grids, is essential for integrating renewables and managing intermittent supply efficiently.
  • Encourage regional knowledge-sharing and collaboration: Cross-border partnerships can accelerate technology transfer, innovation and the development of best practices for transitioning from coal.
  • Support local workforces and communities: Implement training programs, workforce transition initiatives and local engagement strategies to ensure a fair and equitable transition for coal-dependent communities.
     

Based on this, there are three critical pillars for a successful transition: stable technical solutions, sustainable stakeholder engagement and a strong business case. Every project requires bespoke planning that integrates stakeholder interests, addresses environmental impacts and leverages technical expertise to ensure grid reliability.

A well-defined transition strategy that supports all stakeholders and secures financial backing is essential for a viable energy future.

Creating such a strategy involves evaluating the potential of each project and exploring repurposing opportunities, from battery storage to hydrogen production.

Looking forward: policy, financing and social impact

A successful transition will rely on supportive policies that facilitate investment and foster technological advancements. We need to understand the importance of a ‘just transition’ that balances environmental goals with economic equity, especially in coal-reliant communities.

Communities cannot be sidelined; local stakeholders need to benefit from new economic opportunities in renewables. At COP29 in Baku, GHD has been advocating for a holistic approach, including policy alignment, financial innovation and active community engagement.

The shift from coal to clean energy isn’t merely a goal — it’s an urgent necessity. Through collaboration, innovation and commitment to sustainable development, we can achieve a cleaner, greener future for Asia and beyond.

*Richard Fechner is GHD’s Enterprise Business Advisory Leader, leading the global business in providing strategy, commercial, economic, business case, logistics, policy, regulatory, asset management and transaction services. With over 30 years of experience, Richard has held senior roles in both the private and public sectors, contributing significantly to infrastructure development, investment and delivery across various sectors including ports, agriculture, energy, government and defence. He has advised on approximately AU$150 billion in infrastructure transactions and is a highly skilled infrastructure and business professional with expertise in strategic planning, business management and project engineering.

**Dr Tej Gidda is a distinguished expert in clean energy transitions and currently serves as the Global Leader for Future Energy at GHD. With over 20 years of industry experience, Dr Gidda holds a PhD in Environmental Engineering and is a registered Professional Engineer in Ontario. His work focuses on integrating clean energy technologies into existing systems and developing innovative strategies to overcome challenges related to reliability and affordability. Dr Gidda’s expertise spans hydrogen, renewable natural gas, traditional renewables, energy from waste, energy security and planning. He is also an adjunct professor at the University of Waterloo.

Top image caption: Pagudpud Wind Farm, Ilocos Norte, Philippines. Image courtesy of GHD.

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Reaching net zero in the manufacturing sector

Reaching net zero in the manufacturing sector

In order for Australia to reach its goal of net zero by 2050, it needs the help of its manufacturing sector, which accounts for 10% of the nation’s carbon emissions. And the sector is pulling its weight, the Western Sydney Manufacturers Forum heard recently — developing ‘green concrete’, carbon-tracking sensors and technology which can minimise carbon emissions during beer fermentation.

More than 30 experts from universities, industry and government described multiple ways sustainability can deliver real-world impact, cost savings and market differentiation for manufacturers. The forum heard many examples, including an opportunity to reduce emissions from concrete production — which contributes around 8% of global carbon emissions, or more than aviation and shipping combined.

Professor Olivia Mirza from Western Sydney University described the initial pushback to the use of ‘green concrete’ — an eco-friendly alternative which is produced using waste materials — in the Parramatta Light Rail project.

“The initial cost for building [the light rail using green concrete] was let’s say 10 or 12% higher, but then if you do the cost-benefit analysis — less maintenance — it ended up saving 25%,” Mirza said.

The forum highlighted the importance of clear communication and education, suggesting the use of modern formats like social media platform TikTok to effectively engage different stakeholders, especially in the trades, around decarbonisation in building materials.

The aim of the event — hosted by the NSW Smart Sensing Network and the NSW Decarbonisation Innovation Hub at Penrith Panthers — was to showcase opportunities and help manufacturers and their supply chain navigate new emissions reporting requirements.

Dr Martin Ams, a product engineer at Macquarie University, said innovative optical fibre sensors are helping utilities like Sydney Water contribute to net zero by predicting concrete corrosion in wastewater infrastructure.

“Over time, concrete can actually capture and remove CO2 directly from the atmosphere through a process known as carbonation,” he said. “If you have concrete structures that are absorbing CO2 from your atmosphere, you want them to last long so you can keep absorbing this CO2.”

Dr Victor Hernandez Moreno from the UTS Centre for Advanced Manufacturing described how advanced automation and ‘digital twin’ technology can drive more sustainable production decisions for manufacturers. His team operates two mirrored beer-brewing facilities — in Sydney and Germany — that share a unified digital twin, allowing them to analyse data, enhance product quality and reduce carbon emissions.

Keynote speaker and Climate Change Authority Chair Matt Kean said advanced manufacturing in Western Sydney is poised to lead Australia’s decarbonisation efforts by electrifying industrial processes, improving energy efficiency and producing green materials like hydrogen.

“The [Authority’s] Sector Pathways Review revealed that Australia has a great shot at crafting the products, goods and services that will be in high demand,” Kean said. “As the world shifts to net zero, we must be prepared to back our entrepreneurs and innovators and remove policy and regulatory barriers that inhibit progress.”

Kean said products like renewable hydrogen, green ammonia and green metals were essential to reimagining Australian industry. “Importantly, they’re going to be in hot demand, not just domestically, but right across the globe.”

NSW Net Zero Commission principal advisor Manuel Weirich said there is lots of opportunity to reduce emissions in light industry such as manufacturers and smaller processors, which emit 45% of NSW industry emissions.

“These emissions come from things like burning gas in boilers, from engines and motors, chemical processes, calcination in bricks or in cement, and lots of other things,” Weirich said. “Some of the processes are difficult to decarbonise, but others already have solutions available … including heat pumps for water heating, electric forklifts, and better energy efficiency.  

“Manufacturing has a big role to play, to produce the clean materials, the low-emissions materials, and the products and machinery that other sectors use to decarbonise themselves.”

NSW Chief Scientist Hugh Durrant-Whyte said with investment in R&D, skills, digitisation and real-time data, and by preparing for mandatory reporting, Australia can build resilient supply chains and drive sustainable, high-value growth across all business sectors. 

“Digitisation will help identify gaps, improve performance and address skill shortages — especially in hard-to-abate industries,” Durrant-Whyte said. “Achieving net zero will benefit everyone. Small businesses can cut energy costs and preserve expertise through digitisation. Medium businesses can scale up and strengthen supply chains. Large corporations will streamline compliance, meet stakeholder expectations and drive sustainable growth.”

The Executive Director of the Advanced Manufacturing Readiness Facility (AMRF), Ben Kitcher, described how his organisation helps manufacturers adopt technologies that help them become profitable and sustainable.

“What we’re discovering is there is this mutual objective around decarbonisation which always leads back to productivity and profitability,” Kitcher said.

The forum heard that while digital literacy is strong among younger generations, manufacturing still suffers from outdated perceptions. It heard how SMEs in Western Sydney can stay competitive by embracing digital transformation, sustainability and circular economy principles. SMEs are also facing ongoing challenges in resourcing innovation and workforce development, but programs like CSIRO’s Generation STEM are stepping in with practical support through paid internships and university and industry talent matching.

“We have a lot of SMEs that come to us and say their challenge is recruitment and retention, but sometimes we’ve got some SMEs that come to us and say they don’t have the time to do this piece of work,” Generation STEM team leader Luana Caro said.

Chovil & Thake sustainability marketing specialist Hannah Welch said 45% of Australians always or often consider sustainability as part of their purchasing decision-making. She said manufacturers can leverage environmental, social and governance (ESG) data not just for compliance, but as a strategic marketing tool to attract investors and recruit staff.

Andrew Bedrossian, Manager of Renewable Manufacturing at the NSW Department of Climate Change, Energy, the Environment and Water (DCCEEW), said the Net Zero Manufacturing Initiative supports clean technology innovation and low-carbon product manufacturing, with particular focus on revitalising local solar manufacturing. He said there is growing industry appetite and significant investment interest, especially from Western Sydney manufacturers, pointing to strong potential for scale-up and impact.

“We have the world-leading IP here with some of the best brains in the business when it comes to solar,” Bedrosian said. “All the commercial windfalls are offshore. We don’t have anything here, and that’s a real shame. How can we change that?”

Image caption: Climate Change Authority Chair Matt Kean delivered the keynote speech at the Western Sydney Manufacturers Forum. Image credit: AM Visuals.

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