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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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Sustainability compliance should not be seen as a cost

Sustainability compliance should not be seen as a cost

24 Mar, 2025

The challenges of meeting new corporate sustainability reporting requirements are creating concerns across industries, but Schneider Electric’s Lisa Zembrodt says organisations should focus on the positives of compliance.

Zembrodt leads Schneider Electric’s Sustainability Business division, which assists many of Australia’s leading corporations to increase energy efficiency, reduce costs, adopt renewables and map their energy transition pathway.

Speaking to corporate leaders at Schneider Electric’s Innovation Summit in Sydney, Zembrodt said there was too much negativity in current debates over energy and sustainability, including focusing on the complexity and costs of compliance.

“We should turn these perspectives around and look at the opportunities in companies understanding their energy consumption and processes and using technology to drive efficiency. With compliance should come cost savings.”

The new Australian Sustainability Reporting Standards are mandatory and comprehensive, described by ASIC chair Joe Longo as the biggest change to corporate reporting in a generation. They carry penalties for non-compliance and will be closely monitored by investors and stakeholders.

The requirements came into effect for major companies from January and will be gradually rolled out. It involves more than putting data into a report and committing to emissions cuts, said Zembrodt.

“It’s about understanding the impact that climate has on an organisation, its markets and its supply chain. It’s putting in place plans to mitigate the risks, adapt and take advantage of the opportunities.

“Many entities today don’t have a transition plan; simply by requiring a plan to be created, the laws encourage companies to act,” said Zembrodt. “Organisations can gain competitive advantage from complying with the standards and set their strategies to capture the opportunity.

“Sustainability Business has been advising our customers on many areas of energy and sustainability for over 25 years, globally we work with 40% of the Fortune 500, working on everything from ESG reporting and disclosures to decarbonisation strategies and their implementation.

“Improving energy and resource efficiency creates cost savings,” she said. “Investing in renewable generation, storage, microgrids and demand response ensures the security and resilience of power supplies and can reduce energy costs in the long term.

“We’re advising companies on how to be more efficient, how to eliminate the use of fossil fuels in their fleets and their operations and, of course, we advise on how to switch to renewables.”

She points out that new technology and the evolution of power generation create opportunities and risks around energy sourcing. The influx of renewable projects in Australia has made buying renewables much easier than it was a decade ago.

Increased scrutiny and knowledge of business operations can bring additional and unexpected benefits.

“We’ve found that management of energy and energy supply contracts brings cost savings — these are often low-hanging fruit,” said Zembrodt.

“In 2024 we identified $6.7 million of errors in energy invoices for our clients. There’s absolutely no reason any company should overpay for energy.”

She also observed the increasing pressure from stakeholders and investors to progress sustainability, with a real impact on a corporation’s capacity to raise capital if it was not seen to be taking a positive approach.

Zembrodt acknowledged the sometimes-contentious issue of carbon offsets and emphasised they should not be used by companies to avoid actual emissions reduction in their operations. Some organisations were rightly walking away from dubious, generic offset schemes, she said.

However, targeted and documented offset programs had a vital role to play in hard to abate sectors where it was impractical to immediately cut emissions, she said.

“In Australia, the government has put a requirement called the safeguard mechanism on the highest-emitting facilities to buy carbon offsets if they can’t reduce their emissions. We can help to ensure the offsets procured have a positive impact on people and ecosystems.

“Did you know we supported the Paris Olympics with carbon offsets? Part of this included choosing three projects to support through carbon offset purchase for the Paris Olympics. People at the equator are most affected by climate change, so projects in that region are incredibly impactful in a positive way and that’s where we focused our attention.

“The first is mangrove restoration in Senegal, which involved 350 villages and 100,000 people. The second is water well restoration in Rwanda, which gives people safe drinking water nearby but also means emissions from burning wood to boil water are reduced. The third project is a 50 MW solar farm in Vietnam.

“However, we urgently need real emissions reductions. While it is positively impactful that companies invest in gold-standard carbon offset projects, it cannot come at the expense of action to decarbonise.”

Zembrodt pointed to recent extreme weather events as demonstrating how critical taking action on emissions was. “We’ve just seen the Queensland and NSW coastlines buffeted by a major cyclone, while in LA, this year’s devastating bushfires caused an estimated cost bill of more than $250 billion. And it’s not just the physical damage; medical and social costs follow, and let’s see the impact on insurance costs.”

Across the nation, we need to electrify processes wherever possible, and maximise renewable generation, she said. Those electrified processes also need to be made as efficient and optimised as possible through digitisation, monitoring and AI.

“The time to act is now,” she said. “70% of emissions can be eliminated today with the technologies we already have available to us.”

Image caption: Lisa Zembrodt, Principal and Senior Director, Schneider Electric Sustainability Business.

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