new Delhi : A new report from Carbon Tracker said on Friday that Asian countries should shift their focus from reliance on LNG gas to renewable sources to protect themselves from record energy price volatility, geopolitical supply shocks and to meet net zero targets. should do.

The development potential of the offshore wind sector in Asia is enormous. Large coastlines and regional water areas mean that the nation is extremely well positioned to become the world leader in offshore wind development.

Senior analyst Jonathan Sims, author of the report ‘Stop Fueling Uncertainty’, said: “Building new large-scale gas units in Japan, South Korea and Vietnam unnecessarily add to these countries’ reliance on the increasingly volatile global LNG market at a time. will increase. Risk exposure has never been higher in the gas market.

“Planning a power system centered around low-cost renewable energy with battery storage is not only the best option in terms of climate target progress, but also cuts the risk of commodity price volatility and trapped exposure.”

The primary driver of LNG demand has been Asia, accounting for 95 per cent of the projected growth in 2020-22.

The research focused on Japan and South Korea – representing about a third of global LNG demand – and Vietnam, which has the largest regional pipeline of new gas power infrastructure.

Japan, Vietnam and South Korea have all declared national intentions to achieve net-zero emissions by 2050, but continue to plan for a future in which gas-fired units have a central role in their power systems.

Instead, planning a power system centered around renewable energy with battery storage would reduce the risk of commodity price risk, be developed at a lower cost than new gas, and billions of dollars in LNG infrastructure investments. will prevent you from getting trapped.

The ‘Stop Fueling Uncertainty’ urges policy makers to understand the immense opportunities available in the low-cost and low-risk renewables sector and highlights the enormous risks for investors of long-term gas plant investments at this time.

In comparison to low-cost and clean renewable energy, linking the energy grid to unstable and high gas prices puts users off in a worst-case scenario.

The opportunities for renewable energy in Japan, South Korea and Vietnam are vast and more cost competitive than gas.

New solar and onshore wind power developments in Japan, South Korea and Vietnam are either already cheap, or will be cheaper overall investments than new gas units by 2025. new gas

Given the typical planning and construction time frame of at least four years, any unit that can go ahead with development amidst strong competition from low-cost renewable energy may face limited time from day one to go ahead. Is.

The Russian invasion of Ukraine has destroyed the notion that gas is a reliable transition ‘bridge’ fuel. Since the start of the war, the world has seen global energy markets disrupted, with rising concerns of record price volatility, a deep energy supply crisis curbing energy demand not seen since the 1970s.

Fuel cost is essentially the largest single cost item for gas-powered power stations. Gas prices are subject to fluctuations in the international commodity market, which can result in significant changes in costs from year to year.

Such price moves could be the difference between whether or not to be competitive for operating gas-fired power generation capacity.

Volatile fuel prices, which ultimately lead to higher consumer electricity prices, should make the case for continued investment for such assets less attractive than for renewable energy, which requires almost zero marginal cost to operate. .