August 2014: A total investment of US$2.3 trillion will be required for wind and solar photovoltaics (PV) to supply 10% of developing Asia’s electricity in 2035, according to a report by the Asian Development Bank (ADB). The study, titled ‘Diversification of Energy Supply: Prospects for Emerging Energy Sources,’ examines the status and future prospects of wind energy, PV and unconventional gas in the region.

Published in August 2014, the report covers: the status; future prospects; environmental implications; infrastructure requirements; and risks of the three alternative energy resources. On unconventional gas, it concludes that, while “shale gas has revolutionized North American supply,” it “may develop slowly in Asia owing to challenging geological conditions, lack of geological data, dense populations, and industry pipeline and service industry limitations,” among other reasons.

Related environmental concerns include methane emissions, water and land requirements, and water contamination. Citing estimates by the International Energy Agency (IEA), the report concludes that unconventional gas is not likely to supply more than 4-8% of primary energy in China, India and Indonesia. The study cautions that, while unconventional gas substituting for coal brings environmental benefits, the “promise of cheap, abundant gas” could divert efforts from curbing greenhouse gas (GHG) emissions.

On PV, the report argues that an accelerating price decline over the past five years “may have immense implications for Asia, where the solar resource is generally good.” While PV is already cost-effective off-grid, the report identifies as remaining challenges: high capital costs; siting; and grid integration of large amounts of intermittent capacity. The report further notes that Asia is currently replacing Europe as the world’s main PV market, with 44% of the world’s demand coming from the region in 2013. China is the largest producer of PV cells, modules and polysilicon feedstock, with a 50% share of global production.

Wind resources, according to the report, are strong in Afghanistan, China, Kazakhstan, Mongolia and Viet Nam, and potential has barely been exploited in most of Asia. The wind industry overall is larger and more mature than PV, and deployment is expanding rapidly, particularly in China and India. The report describes challenges faced by wind energy as similar but lesser to those of PV, including high levelized cost of energy (LCOE) and capital costs.

The report finds that LCOE for wind and PV in the region are higher than for domestic gas and coal, and low-cost hydro and nuclear, but will be lower than for imported gas and coal, and higher-cost hydro and nuclear by 2020-2030. For a 10% generation share in developing Asia in 2035, the report calculates investment needs of US$900 billion for wind and US$1.4 trillion for PV, excluding infrastructure upgrades. [ADB Publication Webpage] [Publication: Diversification of Energy Supply: Prospects for Emerging Energy Sources] [ADB Economics Working Papers]