Asia could accelerate its transition to renewable energy, says power firm executive

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Aerial view of a wind-solar hybrid photovoltaic power station on Sept. 12, 2020 in Zaozhuang, Shandong province of China.
Li Zongxian | Visual China Group | Getty Images

SINGAPORE — Asia could move more quickly in its transition to renewable energy, said an executive from Sembcorp Industries, a Singapore-based power and urban development company.

“Definitely in terms of accelerating the transition, we could go faster,” Eugene Cheng, the company’s group chief financial officer, told CNBC’s “Squawk Box Asia” on Thursday from the climate conference Ecosperity Week.

Cheng was asked if surging gas prices in Europe and an ongoing power crunch in China indicated that the world is moving too slowly toward renewable energy and net-zero carbon emissions.

The executive said renewable energy accounts for more than 20% of average energy generation across Asia, compared with more than 40% in Europe.  

“So, I think we do need to drive a transition quicker and that will take a combination between governments and also the private sector,” he said.

Sembcorp launched a “sustainability-linked bond” on Wednesday to raise 675 million Singapore dollars ($496 million). The 10.5-year bond has a coupon rate of 2.66%, which will be raised by 25 basis points if the company doesn’t meet its target to cut the intensity of carbon emissions.

To meet the target, Sembcorp aims to increase by four times its capacity to generate energy from renewable sources to 10 gigawatts by 2025, said Cheng.

The company is stepping up renewable energy projects across Asia, with a particular focus on solar and wind projects in China, India and Southeast Asia, he added.

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