Asia: Energy Market Green Energy Booms Despite Oil Comeback – Asia-Pacific Takes the Lead
Despite the global uncertainty brought about by recent events such as Brexit and the incoming Trump administration, the outlook for energy and environment markets in 2017 is good. But the market shifts: Asia-Pacific takes over the role as the world leader in clean energy from Europe and the US.
Singapore – The Conference of Parties (COP22) discussions in Marrakesh were clouded by Trump’s threat to pull the US out of the COP21 Paris climate change accord. While it may be difficult for the US to unilaterally scuttle the accord, since most of the world countries have affirmed their commitment to de-carbonization, the challenge lies in actually meeting the US$100 billion/year financial commitments and also agreement on the transparency of future climate monitoring. However economics will drive the substantial investments in clean and green technologies, led by China and India.
These developments follows a period of downward revisions to the economic growth forecasts and volatility in financial and commodities markets globally, impacted by the slowdown from China and oil prices slump over a two year period.
“We expect 2017 to be a transition year for long term changes, globally. With the rising protectionism across the world, issue of energy security will once again come to the fore in Asia Pacific. This will accelerate adoption of clean technologies which can be harnessed locally and those that are less impacted by global policy & price fluctuations”, noted Ravi Krishnaswamy, Vice President, Energy & Environment, Asia Pacific, Frost & Sullivan.
Big Oil to See a Slow Recovery
With oil prices expected to average about US$55 per barrel in 2017, the focus will be on operational excellence as industry players try to survive the tight upstream market. However, interest in downstream sector will continue to be strong with a slew of refinery and petrochemical investments planned across developing Asia including China, India, Indonesia and Vietnam.
The global glut in LNG supply, aided by the possible large scale exports from the USA, has provided a huge opportunity for South and Southeast Asia increase its base load capacity using gas.
Furthermore, the push towards delinking natural gas price from crude oil price could help development of Asian gas market, in the long run. There are signs of this already impacting the coal power plant industry, with 25% less coal capacity likely to be added in 2017 across China, India, Vietnam and Indonesia than in 2016.