Asia is considered a new and exciting arena for renewable energy development, with a combination of growing population and high growth economies in countries such as India and China creating strong demand for energy now and strong growth in the future.

India and China are amongst the world’s fastest growing (top 5) new renewable energy development countries in the world. Both countries governments have provided strong fiscal and legislative incentives to the industry in their respective countries which has led to a surge in development over the past 5 years. The demand for wind power in China is underpinned by an ambitious 20% renewable energy target set for 2020. Ernst & Young Country Attractiveness Index for wind developers ranks China as 4th best in the World, well ahead of Australia in 12th position. India, with 355 kWh per capita electricity consumption in 2000 has one of the lowest electricity consumption levels in the world, in part due to unreliable supply, lack of generation, and inadequate distribution networks. The Government of India (GoI) in its mission “Power for all by 2012”, estimated that Indian installed generation capacity should be 200,000 MW by the end of its Eleventh Five Year Plan in 2012 compared to 115,545 MW as of March 31, 2005. The wind power programme in India was initiated in 1983-84. From the programme’s inception, the GoI has promoted a market-oriented strategy, which has led to commercial development of technology. The broad based national programme includes wind resource assessment activities, research and development support, implementation of demonstration projects to create awareness, opening up of new sites, involvement of utilities and industry, growth of infrastructure capability and capacity for manufacture, installation, operation and maintenance of equipment and policy support. Individual states in India have set individual state targets which have contributed to the strong growth in renewable energy and especially wind energy due to its cost competitiveness.

China has a well developed small hydro power industry with an installed capacity of over 19 GW, and the annual electric output to 64 TWh as at 2000, China’s rural electrification programme aims to continue to install 1 GW per year of small hydro capacity. The topography of Nepal is ideal for micro-hydro power, with high hills, scattered settlements and more than 6,000 rivers crossing the country. It is estimated that the economically viable microhydro potential in Nepal is about 42 MW. Vietnam has around 500 installations of microhydro systems in the 100 kW to 1 MW range, representing 10 MW of a potential 200 MW (or 5 per cent). There are also estimated to be 3000 possible sites for micro hydro plants (rated up to 100 kW). Approximately 400 small hydro stations (1 to 10 MW) have been constructed, with a total capacity of 70 MW, representing only about 3 per cent of the potential in the country. India, Taiwan, and Sri lanka also have significant resource potential for further development of microhydro schemes backed by strong government fiscal and legislative policies to encourage renewable energy development in their respective countries.

Although some barriers to foreign investment exist for foreign companies in each of these countries, the overwhelming need for foreign investment in these new and developing industries has led to the ability to derive investments in each country so as to precipitate foreign investment in renewable energy.