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Last updated: Monday, September 25, 2017

 

Limited Investment Sources for Renewable Energy

Posted: Thursday, August 31, 2017


In the framework of the Asia-Pacific Economic Cooperation (APEC), the Ministry of Industry and Trade of Vietnam recently held an APEC workshop on renewable energy potential for small and medium enterprises (SMEs) in Hanoi to exchange and discuss programmes policies, technologies and strategies related to renewable energy.

The world is entering the fourth industrial revolution formed from the digital revolution featured by new technologies such as 3D printing, robotics, artificial intelligence (AI) and internet of things (IoT) that promise to bring profound changes to the economy and directly impact businesses. Therefore, the economical use of traditional energies and the targeted use of clean and renewable energy sources is a prerequisite for enterprises, especially SMEs, in the process of integration and development.

It can be seen that, with the strong development of manufacturing and service industries in the world in general and in the Asia-Pacific region in particular, the demand for energy is robustly increasing to meet production and other social security needs. While the demand of mankind for energy is infinite, natural resources are finite and their regeneration requires a very long time, sometimes millions of years (e.g. coal and oil), while high costs are a challenge for renewable energy sources.

However, low capital mobilisation capacity, weak infrastructure and unattractive investment policies have made investment for energy and renewable energy projects in many APEC countries incommensurate with their potential.

According to workshop reports in developed economies, renewable energy represents about 15 per cent of the total energy supply, while the rate is very modest in developing economies.

Insufficient infrastructure, limited human resources and especially low financial resources are the primary causes of this in the APEC region. This reality has caused developing APEC members to ‘lag behind’ and fall short of practical experience and professional expertise compared to their counterparts in the process of calling and financing renewable energy, especially in the event that renewable energy investment requires huge financial and human resources.

Ms Anja von Moltke, a specialist from the United Nations Environment Programme (UNEP), said that renewable energy is a competitive environment driven by government policies. Engaging in global renewable energy production chains, countries need to be aware that they will not receive immediate benefits but long-term sustainable values.

In light of innovative thinking, renewable energy has contributed to changing the structure of the South Korean economy. China has also succeeded in exporting solar cells to many countries around the world.

Mr Cary Bloyd, Senior Staff Scientist at the Pacific Northwest National Laboratory (PNNL), said, “APEC leaders have had many initiatives and activities to promote renewable energy and new energy development over the past years, such as workshops on financing, hydrogen initiatives, carbon-free cities, low emissions, and energy-smart community initiatives. In fact, 55 renewable energy projects have been funded, completed and operated by the APEC Economic and Technical Assistance Committee since 1992. Of the sum, 11 were further deployed in 2012-2013.

However, the project performance depends on each country because of different geographical conditions, investment policies and bank confidence in project feasibility. In reality, in New Zealand, many private renewable energy models are very successful. In Mexico, the significance of renewable energy is propagated to local banks.

For that reason, in order to effectively call capital, countries need to create a fair and competitive environment and a transparent legal system to facilitate enterprises to approach the market and reduce investment risks. Especially, it is important to create a consensus in reasonable energy development investment.
Known to have great potential for renewable energy, Vietnam’s renewable energy has however accounted for only 3.7 per cent of the nation’s total energy supply. Mr Nguyen Duc Cuong, Director of the Centre for Renewable Energy and Clean Development Mechanism (Energy Institute under the Ministry of Industry and Trade), said, apart from insufficient investment capital, the consumption of renewable energy is also difficult due to high electricity prices.

The overall goal of APEC energy cooperation is to reduce the energy intensity in the region by 45 per cent by 2035 and double the rate of renewable energy forms in total energy in APEC in 2030, as guided by APEC leaders at the 22nd APEC Summit in Beijing, China.

Huong Ly








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