At the inaugural Marsh Asia Energy Industry Conference (EIC), industry leaders and experts discussed three key business enablers that can empower innovation and mobilise investments for a balanced energy transition.
With Asia contributing to more than half of carbon emissions globally, it is crucial for organisations to mobilise efforts towards clean energy resources to foster sustainable economic growth. Experts at Marsh Asia’s EIC agree that achieving net-zero energy targets and facilitating a successful and sustainable energy transition means focusing on three key business enablers: technology and innovation, people, and capital and finance.
1. Technology and Innovation
Driving innovation for affordable renewable energy solutions
Due to coal’s affordability and reliability as a power source, coal-fired power plants remain essential to several countries in Asia. However, it is crucial to recognise that as many countries in the region continue to develop and experience rapid growth in the coming decades, the need for sustainable energy alternatives becomes increasingly urgent. While renewable energy solutions hold great promise for long-term environmental sustainability, they currently face challenges in terms of cost competitiveness. For renewable energy solutions to be a competitive alternative, innovation and technological advances are vital.
An area that has seen technological innovation improve the financial viability of green energy is wind power. Innovation in the decade leading up to 2021 has resulted in a 60% reduction in the cost of wind energy due to the development of larger and more efficient turbines.[1] While there have been challenges in the transportation of larger turbine parts and blades, innovation has led to the design of an aircraft capable of landing on shorter runways, eliminating the need for traditional airports and expanding the number of locations available for onshore wind generation.[2]
To aid continued technological advancement in renewable energy solutions, three elements are key:
- Governmental support
Government policies and regulations not only play a vital role in encouraging companies to invest in and adopt clean energy practices but also set a tone and direction for investment, development, and the overall trajectory of firms and the industry. In Japan, for instance, the government issued US$140 billion in bonds to support transition technology and plans to implement carbon pricing from 2026.[3] This combination of financial support and carbon levy not only drives the adoption of clean energy practices but also supports the companies that propel our industries, fostering an environment that promotes sustainable and responsible growth, and ultimately accelerating the energy transition.
- Consumer demand
Consumer behaviour and sustainability have a symbiotic relationship, as evidenced by the textile industry. Consumer demand is a key sustainability driver, with 87% of consumers in emerging Asian markets expressing a strong interest in adopting sustainable lifestyles, surpassing the global average of 73%.[4] Changing consumer expectations and heightened awareness have prompted Bangladesh's textile industry to implement sustainable practices, such as reducing water and energy consumption through dry washing technologies and enhancing energy efficiency via waste heat recovery. These proactive measures demonstrate the industry's response to changing consumer expectations and its commitment to achieving a more sustainable future.
- Partnerships
Fostering innovation and establishing effective and inclusive partnerships across and between public and private sectors is crucial for driving sustainability and facilitating positive change. Reinvesting funds into educational and research institutes that drive innovation forward is essential, as it nurtures the development of groundbreaking technologies and solutions.
Partnerships also encourage collaboration and collective action. This inclusive approach allows everyone to contribute their expertise, resources, and perspectives towards addressing sustainability challenges. By working together, these diverse collaborations can facilitate knowledge sharing, access to funding, and the implementation of sustainable practices on a larger scale.
