Reinventing energy sector through innovation

AS GLOBAL energy experts and decision makers gather at the Singapore International Energy Week, the role of innovative technology in reshaping the global energy landscape lies at the heart of their agenda. Energy has always enabled ingenuity and powered innovation. To support growth and avert dangerous climate change, ambitious innovation in the energy sector itself is urgently needed.

Countries in the Asia-Pacific region are already working to reinvent the sector. In the past decade, our innovations in wind and solar energy have made major contributions to lowering costs and increasing efficiency. The cost of solar panels has fallen by 80 per cent and wind turbines by up to 40 per cent. Many countries have become global innovation leaders, pioneering advances in the way we generate, store and use energy.

India now has the newest and cheapest solar technology anywhere in the world. Solar power in cities across China has become cheaper than grid electricity. Singapore has established itself as an innovation hub, a big investor in solar research and development, from which others can learn. The region looks to its leadership in clean energy solutions, such as industrial micro-grids, floating solar power installations and solar forecasting.

Despite this progress, Asia-Pacific countries are clear about the enormous challenge ahead. Accelerating the transition away from fossil fuels to sustainable energy, to avoid irreversible climate change is the challenge of our generation. While the 2030 Agenda for Sustainable Development and the Paris Agreement provide a global cooperation framework for concerted action, there is no time to lose. The science tells us emissions must be reduced by 45 per cent by 2030 to prevent the worst effects of global warming.

Yet, as countries work to comply with these ambitious targets, energy consumption continues to increase. Greenhouse gas emissions have not yet peaked, and energy affordability and security remain priorities.

By the middle of this century the region will have to provide power to many more homes and factories. More cars will be on the road and planes in the sky. How can these needs be met at a lower carbon cost?

One answer is to increase the use of cost-effective renewable energy and energy efficiency applications. Initiatives to scale up wind, solar, hydro, biomass and geothermal generation have a major contribution to make, as does increasing the efficiency of buildings and appliances, and shifting to more efficient modes of transport.

Yet, for renewables and energy efficiency to decarbonise our economies to a level sufficient to stay within two degrees of warming by 2050, much more needs to be done by governments to incentivise and scale up the deployment of existing technologies. For one-third of global energy emissions, economically viable decarbonisation technologies simply do not yet exist. Steel, cement and industrial chemical productions are among the sectors in urgent need of new technologies to drastically reduce their carbon emissions.

To deliver this new technology, radical shifts in policy, in investments and culture are required. Innovative financing mechanisms, such as green bonds and well-structured public-private partnerships have a role, especially combined with supportive policies such as public co-funding and measures to reduce investment risk.

By ending fossil fuels subsidies, over US$160 billion dollars could be unlocked to fund sustainable energy and underpin the development of the next generation of clean technologies.

TURNING TO TECHNOLOGY

Regional and global cooperation can quicken the pace of progress, particularly as many sectors where new technology is most needed are inherently cross-border, such as shipping and air transportation. Using technology to couple clean energy with industrial production in chemicals, steel or cement must be part of the solution.

The third industrial revolution holds the promise of further innovation in the energy sector. The Internet of Things, Big Data and mobile computing are already creating value in our daily lives and new economic opportunities. These technologies could revolutionise the energy sphere, but policy makes need to put the right frameworks in place to make this happen.

Applying Big Data to power grids and electric vehicles, or blockchain for peer to peer energy trading should enhance how we generate, distribute and sell energy to make it cleaner and more efficient. Energy sector innovators are looking beyond energy hardware to embrace innovation in energy finance and business models.

These are just some of the opportunities offered by an innovation-led future in energy. At the United Nations Economic and Social Commission for Asia and the Pacific, we support policy makers who want to align their national energy transition strategies with decarbonisation efforts. We facilitate regional cooperation on the interconnection of the region's power grids.

Getting policy makers and innovators to work together holds the key to long-term success - not only to design targeted innovation policies, but also to inspire citizens to become energy innovators themselves, and together build a greener and more sustainable future for Asia and the Pacific.