KPMG’s report explores renewable energy as a key enabler of decarbonization

KPMG ASPAC launches ‘Decarbonization through renewable energy: Understanding Asia Pacific’s Corporate Power Purchase Agreement landscape

KPMG ASPAC launches report exploring the regions CPPAs

Asia Pacific’s Corporate Power Purchase Agreements (CPPAs) emerge as a pivotal approach for corporates as they move forward on their Net Zero journey.

KPMG has released the ‘Decarbonization through renewable energy: Understanding Asia Pacific’s Corporate Power Purchase Agreement landscape’, a report which gives an overview of the renewable energy market in the Asia Pacific region.

The report, which provides enterprises with a clear view on the CPPA market and summarizes both opportunities and barriers in the current renewable energy market, looks at government policies and regulations, types of basic power purchase and sale contracts, and renewable energy related policies and objectives of some major power plants. It further elaborates on the electricity market framework, Corporate Power Purchase Agreement (CPPA), renewable energy certification, policies, purchase and sale cases of 12 markets in the Asia Pacific region.

The report highlights six key trends driving the future development of the renewable energy market in the region.

  1. CPPA market in the Asia Pacific region is still less developed but shows significant potential for growth.
  2. Regulatory framework to implement changes to the CPPA framework is rapidly evolving in the region.
  3. The phase-out of generous feed-in-tariff (FiT) scheme is expected to increase the appetite for CPPAs.
  4. Economics and net-metering are driving the rooftop solar installation and increasing adoption of on-site PPA.
  5. There is a growing interest in CPPA across Asia Pacific to achieve their respective sustainability commitments.
  6. Asia Pacific is progressing towards a low-carbon energy future.

As an increasing number of countries respond to climate change and announce their commitments to Net Zero, supporting mechanisms and measures continue to bloom. Besides domestic and foreign regulatory requirements, the demand for an enterprise to have sustainable operations and supply chains have also become the driving force for corporations to purchase green electricity.

According to the Paris Climate Agreement, there is a target to achieve carbon neutrality and Net Zero carbon emissions by 2050. However, with the intensification of climate change and the global energy crisis caused by the Russian government’s war in Ukraine, the price of renewable energy has risen in response.

Every market in the region has a different electricity market liberalization progress and regulatory framework, which makes green energy procurement challenging, and impacts the path to Net Zero.

Michael Horn

Indonesia’s transition to a low-carbon economy will take significant, sustained efforts from the public and private sectors. Recent energy transition funding initiatives to begin early retirement of coal-fired power plants are encouraging, but removing coal from the mix is not enough. Renewable energy development must play a key role in Indonesia’s transition. It will be necessary to generate additional energy for Indonesia's long-term economic and social development to ensure a high-growth, low-carbon future. Indonesia’s partnerships are driving significant action on energy decarbonization. These partnerships will be essential for scaling up energy decarbonization to move away from coal, as well as creating market conditions that promote renewable energy sources.



Michael Horn
Head of ESG Advisory and Head of Restructuring Services,
KPMG Indonesia


For media queries, please contact:

Susanto
Head of Clients & Markets, KPMG Indonesia
E: Susanto@kpmg.co.id

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