China’s decision to stop building coal-fired power plants overseas is likely to open up opportunities for renewable energy project developers and financiers from the mainland, but the transition will be slow and challenging, according to industry observers.
This is particularly true of Southeast Asia, where there is a clear preference for renewable energy due to growing energy demand, but an immature regulatory environment and insufficient power grid investment present obstacles. For mass development to take off, guaranteed offtake, dispatch and tariffs are needed, besides robust power purchase agreements and a creditworthy off-taker – typically the grid operator, say experts.
