Risk Analysis on Low-Carbon, Cutting-Edge Technology Deployment in Asia

Tomoko Murakami, Kenji Kimura, Kenichi Onishi, Hiromasa Funato, Wataru Sugino, Mitsuaki Ota, Hiroshi Akie and Phoumin Han

No 2025-RPR-25 in Books from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: ASEAN’s rising energy demand and commitment to carbon neutrality call for the rapid deployment of low-carbon, cutting-edge technologies. This joint study by ERIA and the Institute of Energy Economics, Japan (IEEJ) provides a risk-based assessment of renewable and clean energy projects across the region – including floating solar PV, offshore wind, hydropower, biomass, geothermal, hydrogen, battery storage, and grid infrastructure. Unlike conventional analyses that focus on market potential and opportunities, this research examines business risks and lessons drawn from both successful and failed projects. The findings reveal that while policy engagement and memoranda of understanding can create momentum, they are rarely sufficient to ensure project completion. Success depends on timely licensing approvals, robust project preparation and siting, resilient supply chains, and credible off-take arrangements. Financing institutions emerge as decisive actors. Their stringent project assessments may deter weak proposals but also promote stronger risk allocation, ensuring that risks are carried by the parties best equipped to manage them. By contrast, project failures are most commonly linked to fragile supplier networks, regulatory bottlenecks, and unreliable financial partners. The study’s policy recommendations call for: - Streamlining regulatory and licensing processes to shorten project lead times; - Diversifying and securing supply chains to mitigate external shocks; and - Attracting financially sound off-takers to enhance investor confidence. Moreover, greater transparency in project progress, backed by national incentives and international co-operation, can help build trust and accelerate investment. These measures are essential to advancing ASEAN’s low-carbon transition, strengthening energy resilience, and achieving long-term regional energy security.

Date: 2025
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