The COVID-19 pandemic has changed the world. It is a truly global threat, ignoring national borders and domestic politics.
But this pandemic highlights the need for a global response to a second key global threat: climate change. It is now more important than ever to listen to the advice of experts before it’s too late.
Despite the current global economic shutdown, the global energy transition is well underway. This transition is being driven by renewable energy technology that disrupts incumbent industry business models, much like the rise of the mobile phone and the internet.
Technology disruption is fundamentally reshaping the global energy landscape. A key impetus is the dramatic, ongoing deflation in the cost of solar energy and battery storage.
Both have seen costs drop 80 to 90 per cent over the last decade and the Institute for Energy Economics and Financial Analysis (IEEFA) expects both to halve again in the coming decade.
Renewables are now a cheap source of energy generation, beating the costs of new imported coal.
Such a global market transformation has significant implications for energy security.
India, for example, imported some US$250 billion worth of fossil fuels in 2019, both a massive economic drain and a major energy security risk.
Leveraging renewable energy resources — wind, solar and hydro — allows for domestic diversification away from imports and helps reduce energy security risks. India is targeting 450 gigawatts of renewables by 2030.
China has been the world’s largest investor in renewable energy in the last decade. The IEEFA expects Chinese renewables to reach grid parity with coal-fired power nationally in 2020 as capacity expansions drive economies of scale and continuing deflation.
While South and Southeast Asia have been renewables laggards, Asia is nevertheless on the cusp of a dramatic pivot. Recent developments across India, China, Japan, South Korea, Vietnam and Taiwan highlight the potential for change.
Back in 2016–17, India’s then Energy Minister Piyush Goyal accelerated the use of online reverse auction tenders for the supply of renewable energy for a term of 25 years with zero indexation, backed by bankable central government contracts.
The result was staggering.
In one year, the price of tariffs dropped by 50 per cent to below Rs 3 per kilowatt-hour (US$40 per megawatt hour). This price was 30 per cent below the cost of existing domestic thermal generation and 50 per cent below new imported thermal power. Since then, India has taken advantage of global investor interest to invest US$10 billion annually in renewable infrastructure.
In the last decade, India has scrapped plans to build…