Emerging investors are fostering growth in the electric sector of Asian utilities, focusing on sustainable and eco-friendly projects.

Headline: Asian Utilities Push Forward with Decarbonization Plans Amidst Growing Energy Demand

Malaysia's state-owned utility, Tenaga Nasional Berhad (TNB), has announced a decarbonisation plan spanning its entire value chain, with a focus on decarbonizing energy sources. This move is part of a broader trend in Asia, where power companies are making commitments to climate action and growing their low-carbon solutions.

Japan's J-POWER and Chubu Electric are leading the charge, both announcing plans to decommission coal-fired power plants by 2030. J-POWER plans to shut down up to five units by 2030 as part of its target to reduce 46% of CO2 emissions from 2013 levels. Chubu Electric, on the other hand, has committed to shutting down all inefficient coal-fired power plants (supercritical or less) by 2030 and plans to expand its renewables capacity, starting the full-scale operation of ammonia co-firing technologies in the 2030s.

Hong Kong's CLP has also aligned the performance measures and remuneration of their executive directors and senior management with science-based greenhouse gas emissions reduction targets and the phase-out of coal-based assets.

The journey to a net-zero future in Asia is far from over, and much more needs to be achieved at scale and speed. Over the past three years, 20 highly influential regional investors with $11trn in assets have agreed on a set of climate-related expectations for electric utility companies. The Asian Utilities Engagement Program, now in its fourth year, provides unique and invaluable insights into this transition.

Collaboration with stakeholders is crucial to turn cautiously positive signs into a success story for Asia's leadership in the global fight against climate change. Continued investor engagement, strong government policies, and corporate leadership are essential to accelerate the transition to renewable energy sources in Asia.

However, the path is not without challenges. Asia's energy demand is accelerating, particularly in tech-based economies due to the boom in artificial intelligence and data centers. This increased demand necessitates a robust and resilient power grid. TNB is enhancing its transmission grid to support Malaysia's goal of having 70% renewable energy in its power mix by 2050.

The Czech energy company ČEZ plans to shut down its coal power plants by the mid-2030s and aims to expand its renewable energy capacity by commissioning 6,000 megawatts of renewable energy storage by 2030. It is also investing in small modular nuclear reactors as part of its strategy to replace coal plants.

Yet, not all commitments are steadfast. RheinEnergie, a German utility, had agreed in 2021 to phase out coal power plants with a target of shutting down the Rostock coal plant by 2030, but recently has stated it will operate it as long as legally allowed, showing some conflict in commitments.

Asia's energy landscape is evolving rapidly, with utilities making significant strides towards decarbonization. However, more ambitious climate action is needed from all electric utilities in Asia to remain competitive and avoid stranding fossil fuel assets. The road to a sustainable future is long, but with concerted efforts from all stakeholders, it is a journey worth pursuing.

Emerging investors are fostering growth in the electric sector of Asian utilities, focusing on sustainable and eco-friendly projects.