Operations: A Major Barrier to Renewable Energy in Asia

The capital cost of renewable energy has long been perceived as its biggest barrier. However, renewable energy projects are increasingly benchmarking better against traditional power generation costs. More recently, resistance to adopting and integrating renewable energy in Asia often stems from operational concerns over grid management.

The power sector is facing unprecedented change. Providing reliable and stable power has long been the mission of electric power utilities, overcoming challenges faced by peaks and troughs in consumption. Integrating solar energy and wind power into the grid requires operators to manage the power inputs to the system because renewable energy sources are intermittent throughout the day. This is especially problematic for some grids in developing Asia, which have a lack of flexible ramping in their generation fleet.

Unconventional Thinking

Renewable energy investments will diminish with time if not coupled with improvements throughout the power sector value chain. Hybrid technology, energy storage, and the development of smart grids are required. The regulatory framework has to be in place to incentivise investments. New flexible pricing mechanism must be considered, and the critical role of hybrid technology and energy storage needs to recognized economically.

Multiple pilot projects need to demonstrate that these new business models can be appropriate for local contexts. Weather data needs standardization. Power companies must increase engagement and communication with multiple stakeholders, existing and new. Entire organizations, traditionally conventional in thinking, must now embrace the unconventional.The electricity industry in Asia has never faced such risks while the rewards from starting down the smarter grid path could be realized faster than expected.