Over the next decade, the Asia Pacific region is set to invest a substantial $3.3 trillion in power generation, with a significant focus on renewables, according to a recent analysis by Wood Mackenzie. Nearly half of this investment, around 49%, is earmarked for wind and solar projects, while 12% will go toward energy storage solutions.
The Asia Pacific region plays a pivotal role in the global energy transition, as it is expected to account for over half of the world’s electricity demand in the current year. Both India and China, the two largest markets in the region, are witnessing remarkable growth in renewables while still maintaining coal power deployment. This growth trend is expected to continue, with the region projected to add a massive 1,840 gigawatts (GW) of new power capacity in the next five years, surpassing the rest of the world combined.
India, in particular, stands out as a dynamic and significant player in the region’s power market. With some of the world’s lowest-cost renewables, India has rapidly expanded its wind and solar capacity, contributing to a renewables share of 22% in its power generation as of 2022. However, despite ambitious plans for carbon neutrality by 2070, India is simultaneously investing heavily in new coal power projects, with over 50 GW in the pipeline. This dual approach to energy generation has significant implications for global carbon emissions.
While India’s transition to a low-carbon power system is underway, uncertainties remain, including grid investments, pricing mechanisms, energy storage growth, and policy support. Despite these challenges, India’s pivotal role in the global energy transition is undeniable, and its decisions in the coming years will have a substantial impact on the world’s efforts to reduce carbon emissions.