The Solar Energy Imperative in the Asia-Pacific Region

Welcome address by Haruhiko Kuroda, ADB President, at the Second Meeting of the Asia Solar Energy Forum, Tokyo, Japan

I. Introduction

Your Excellencies, distinguished delegates, ladies and gentlemen;

It is my pleasure to welcome you all to this Second Meeting of the Asia Solar Energy Forum. First, let me thank our co-host for this event, the Government of Japan, and our other partners: the International Energy Agency, Renewable Energy and Energy Efficiency Partnership, and the United Nations Industrial Organization.

I am very pleased that we are gathered today to explore prospects for an unconventional energy source for Asia. Our region is very much exploring alternate development paths, where renewable energy plays a visible, if not a dominant, role.

II. Signs of the Times: Post-crisis Developing Asia and the Hunger for Energy

This time last year the economic prospects of the Asia and Pacific region were uncertain. Today, we expect developing Asia to attain a healthy 8.2% growth rate in 2010, followed by lower but still robust growth of 7.3% in 2011. But there are still challenges to overcome. The Asia and Pacific region still lags far behind industrial economies in per capita income and remains home to two-thirds of the world's poor. Sustaining post-crisis growth in the long-run is critical for reducing poverty and raising living standards. To achieve this, developing Asian economies need to improve their productive capacities.

Inevitably, this will increase demand for energy. The International Energy Agency expects primary energy demand in the region to double between 2006 and 2030. Meeting this energy demand mainly through traditional fossil fuel sources is neither environmentally sustainable nor economically desirable. Therefore, Asian countries will need to aim to maintain economic progress and improve energy security, while simultaneously charting a new low-carbon development path. The solution lies in making cost effective investments in clean energy technologies and practices.

III. The Solar Energy Imperative

Solar photovoltaics (PV) are among the faster growing generation technologies worldwide. These presently generate electricity in over 100 countries. At the same time, "concentrating solar power technology" is rapidly being adopted, its generating capacity nearly doubling in the last five years.

The wider adoption of these technologies is the result of declining costs, which was made possible by rapid technological advances, larger scales of production, and lower production costs including in Asia. The increasing demand from national solar promotion programs has also been vital. Some of the largest emerging programs are in Asia — People's Republic of China's Golden Sun Program, India's National Solar Mission, and Thailand's Small Power Producer scheme, to name a few.

It is only natural that Asia should play a prominent role in the growth of the solar energy industry. The unfilled energy demand in the region offers exponential growth opportunities for the technology. Furthermore, good sunlight and land suitable for solar power generation are abundant. The industry will generate employment from indigenous solar manufacturing and ancillary services. As solar power supply can be decentralized, it will facilitate the development of rural and hard-to-reach areas. Ultimately, realizing the region's solar energy potential will help trigger a wave of innovation, efficiency improvements, and scale that can accelerate the diffusion of solar energy technologies and thus help it achieve grid parity with the other sources of energy worldwide.

IV. ADB's Pioneering Response: the Asia Solar Energy Initiative

Lowering generation costs to the point solar energy is at least equal cost to other means of generating electricity is precisely the target of ADB's new Asia Solar Energy Initiative. The Initiative aims to create a virtuous cycle of solar energy investments in the region, so that ADB's developing member countries can benefit fully from this clean and renewable energy resource. It integrates three components that we believe are keys to catalyzing solar energy development in Asia and the Pacific.

First, there is a project development component aiming to establish 3,000 megawatts of solar power in the region. ADB has already participated in the financial close of two private-sector led solar photovoltaic electricity generation projects in central Thailand earlier this year. And our pipeline of solar energy projects for the next 3 years continues to grow. ADB itself is leading by example, currently installing about 370 kilowatts of solar PV capacity on the roof of our headquarters in Manila. Through this project, we are demonstrating a build-operate-transfer business model that can be readily replicated and scaled-up across the region.

The second component on innovative financing will help facilitate project development. We are proposing to establish the Asia Accelerated Solar Energy Development Fund. This fund will help bring down the initial high costs of technology adoption, and support innovative mechanisms to encourage private sector financing. Specifically, the fund will help mitigate the risks related to prospective solar energy projects, and provide power generation incentives — both are not readily available from existing funds. To build the resources of this pioneering fund, ADB has already initiated talks with governments, both in Asia and outside, and with the private sector.

The third component showcases knowledge through the Asia Solar Energy Forum. The Forum is envisioned to be the premier platform in the region for sharing solar energy knowledge and facilitate technical capacity development and policy and regulatory framework development. It will help bridge the gap between suppliers and developers of solar energy in the public and private sectors, and address barriers to trade in solar and smart grid applications.

V. Conclusion: Expectations from the 2nd Meeting of ASEF

In the coming two days, you will learn more about technology trends, production capacities, market barriers and suggestions for breaking them, solar energy end-use, regulations, and smart grids. As recommended in our first meeting in Manila, you will also be presented a proposal to transform the Asia Solar Energy Forum from an ADB-sponsored platform that it is today to a self-sustaining, not-for-profit society, owned and administered by its members. It is hoped that it will provide high-quality inputs for effective policy making and successful financing of solar power development in your countries. We hope that you will leave this meeting with clear good ideas for — and participating in — solar energy development in the Asia-Pacific region.

We look forward to working with you for the sustainable development of Asia and Pacific, powered by clean energy technologies. Thank you very much. I wish you all a pleasant morning and a fruitful two days.