You took on leadership of Blueleaf Energy just one year ago, what vision did you bring on board?
We are on a mission to establish Blueleaf as one the largest Pan-Asian renewable energy platform, that develops, finances, owns and operates renewables and storage assets to accelerate the energy transition towards net zero and beyond. Committed to upholding the highest environmental, social, governance and safety standards, Blueleaf Energy serves both corporate and industrial consumers and large utilities, providing our customers access to competitive and green energy mix and solutions to achieve their sustainability targets. Our primary focus markets are Taiwan, Japan, India, the Philippines and Vietnam. We are looking to expand further into Indonesia and other South East Asian countries.
Following COP26, there is a strong mandate to accelerate the energy transition globally. In Asia, the countries are in different stages of their electricity market liberalization and energy transition journey, which presents both significant opportunity and a unique set of challenges. Over the last decade, the region experienced a lot of subsidy-driven growth, the cost to switch is no longer an issue and given the right market and regulatory framework the prospects are very appealing in almost all markets.
Following COP26, approximately 90% of global GDP committed to net-zero emissions by 2050. Do you notice a significant increase in demand for renewable energy?
In Asia Pacific, the pace of development and investment in renewable energy continues to outstrip other parts of the world supported by growing populations, robust economic growth and the greenfield nature of the power market in the region underpinned by relatively attractive government support initiatives and political impetus for building new infrastructure.
However, this is still relatively early on the decarbonization journey and further scaling and speeding up decarbonization can help economies in Asia and the Pacific stage a recovery from COVID-19, while also addressing climate change and energy security issues. Asia continues to play catch up to Europe and the United States, particularly in terms of multinationals and corporate offtake signups which has been an increasingly growing segment driving private sector’s net-zero commitments. We don't lack ambition; rather, regulatory reforms and policies prevent us from fully capitalizing on the opportunity. Many Asian markets are still in the early stages of their energy transition, as electricity markets are not liberalized and served by single, state-owned utility company.
As Blueleaf Energy, we are building and operating solar energy systems for multinational companies in the F&B, Cement and electronics industries to power their operations in Asia. These are onsite opportunities where regulation has minimal impact, but the distributed nature makes it hard to scale and addresses only a small segment of the market. Opening up electricity markets and planning grid upgradation and having a predictable renewable energy procurement program / targets will be critical to reaching the GW ambitions.
What key factors did you consider when deciding which Asian countries to invest in?
Given the region’s complexity and diversity, an APAC-wide playbook does not provide sufficient clarity and nuance for investors and operators eyeing to capture the potential adequately. As long-term investors, a good blend of macro considerations such as regulatory landscape, power demand outlook are equally important in combination with micro considerations at a country / project level to analyze investability, potential returns and strength of the supply chain. Having a diversified portfolio across technologies, OECD / emerging markets, Greenfield / operational assets and offtakes will be critical to maximize value creation for the investors.
Several of your Asian colleagues are betting on rooftop systems or floating solar. What technologies are you prioritizing at Blueleaf?
Commercial and industrial rooftops are an addressable segment in all markets. At Blueleaf Energy, we are focused on utility scale opportunities both for captive consumption and grid connected projects. Floating solar has large untapped potential as well - all Asian markets combined offer a 500 GW opportunity. Scale and technology maturity in combination with suitable regulation around lake / reservoir use is critical to drive growth in this segment.
Agrivoltaics / Solarsharing / mixed use solar as it is called in various markets is a growing third pillar that is emerging. It's about finding multiple uses for the land that a solar project would require by combining it with specific crops or aquaculture activities. Technological maturity to bring costs down and achieve scale, land reforms, regulation changes need to be fast tracked to achieve scale on this segment.
Your portfolio is currently dominated by solar, but wind and storage are also of interest. What role do these play in your activity and the broader development of the market?
It is no coincidence that our portfolio is dominated by solar because in Asia, like in Europe, sun is abundant. There are, however, very good pockets for wind energy that we are looking at (Taiwan, Japan, Vietnam, India bear most opportunity here).
The growth in installed and planned renewable energy generation capacity has driven developers and utilities to evaluate energy storage as a potential solution to intermittency challenges for grid operation and stability and provided investors with increasingly attractive opportunities and projects. Energy Storage is an essential part of the new power system architecture as it not only helps to balance out the variability in generation but could also enable consumption of a higher proportion of self-generated renewable power by consumers and reduce the need to feed excess electricity back into the grid. The update depends on current and foreseeable policy and regulatory frameworks within the various countries, the competitive landscape of other technologies and strategies to boost the flexibility of power network and reduce costs; currently in many Asian countries, it is difficult for private companies to obtain tangible benefits from storage because of lack of clear regulation surrounding Energy storage systems integration.
What key objectives are you pursuing in the coming 2-3 years?
Blueleaf Energy is a portfolio company of Macquarie’s Green Investment Group (GIG) operating on a standalone basis. With this global relationship, we have established a strong regional presence in Asia in the last two years across North Asia (Taiwan, Japan), South East Asia (Vietnam, Philippines) and India.
We are also keen to collaborate with various stakeholders including but not limited to regulators & policymakers, developers. Investors, financiers, offtakers and other partners to accelerate the adoption of renewable energy. With a combination of rapidly growing economics resulting in significant new capacity additions, huge replacement potential of thermal generation, it is a very exciting place to be in and Asia Pacific could be the biggest energy transition story for the decades to come.
