Wen Bin Lim joins Asian Power Awards 2021 judges’ line-up
KPMG Singapore’s power and utilities deal advisory lead foresees more growth and game-changers in the energy sector.
Wen Bin is a director in the KPMG deal advisory practice, and leads the power and utilities sector team. Having supported over $15b of energy financing and transactions across Europe, the Middle East, and Asia, he has extensive experience in assisting with financial feasibility, structuring, due diligence, and fund-raising activities for power and infrastructure projects.
As a judge in the Asian Power Awards 2021, Wen Bin brings a deep understanding of Southeast Asia’s renewable energy market, on top of company bankability and financing issues. He has worked with major banks, equity investors, and financial institutions in both equity and debt financing roles.
He sat down with us to discuss recent significant trends in the region’s energy sector, including lucrative areas worth investing in, the sector’s growth potential, and how the sector can respond to disruptions.
Which particular markets or sectors are your main focus? Can you share with us your work experience or any backstory that has contributed to your professional career?
As a renewable sector lead for the Asia Pacific, solar, wind and green hydrogen projects have become a key focus in my work, as renewable energy becomes increasingly mainstream in the region. I started my career in London as a power market analyst 14 years ago. I consider it a fortunate career move to have entered the energy sector then; there has never been a dull moment since with the ever-changing energy landscape. It is satisfying to see large infrastructure projects reach fruition–particularly those that cater to basic needs, such as an electricity supply. Contributing to energy affordability, supply security, and sustainability, have also been extremely rewarding.
What are some of your observations on the Asia Pacific's energy sector? Can you give some significant trends that have dominated the industry for the past year?
The push for sustainability and net zero has intensified to varying extents across countries in the Asia Pacific over the last 18 months. More global corporations, from big tech firms to major oil players, are stepping up. They are also taking on roles of influence to drive the energy transition agenda, even as they emphasise the need to decarbonise supply chains.
Cleaner energy resources, such as hydrogen, have also been increasingly embraced by large corporations. This is since sourcing the green agenda is gaining importance in companies’ international expansion plans and decisions. In that respect, countries will need to consider their response to these changing needs such as providing an enabling regulatory framework to encourage low-carbon solutions that meet consumers’ requirements is critical. Missing this opportunity may result in a loss of global competitiveness as the world moves towards net zero.
What are the most lucrative areas in the region's power sector that are worth investing in?
Risks and returns come together.
Long term infrastructure investors tend to seek low and stable returns. These come when technology is well understood, projects follow a proven bankable project structure with precedents, and there is an established pool of capital with deep liquidity.
Where higher returns are sought by investors, these are typically found in developing or pilot projects. For example, waste to energy, or for emerging innovations, such as green hydrogen.
Which energy sector has the biggest growth potential during and after the pandemic? What are the reasons behind them?
In the wake of the pandemic, demand for Corporate Power Purchase Agreements (PPA) (also known as commercial and industrial solar) has seen significant growth in the region. Corporate PPAs are used by companies to procure renewable energy and hedge against future price risk, while providing the renewable energy generator a stable long-term income to recover its investment cost. Corporate renewable PPAs have seen significant growth driven by convolution of economics due to the solar cost trends, increasingly established delivery value chain, and higher demand for green credits by corporations. There is also a deep capital pool from developers and lenders seeking to fund corporate PPA projects with credit-worthy off-takers.
What major disruptions are you expecting within the sector, particularly regarding energy transition and demands? How are you going to respond to those?
Asia has taken the fast train towards net-zero emissions with some countries pushing hard with changes and developments against climate change.
Along with this trend, we should expect energy supply disruptions with the bolstering of green technology capabilities in the sector, and an increased demand for clean technology innovations in this space. For instance, there’ll be a need for more energy storage options to manage what is known as ‘intermittency’ – where the energy system switches between stored renewable energy and live renewable energy to power machines and utilities. There may also be more decentralising of electricity generation to drive greater agility and cost-efficiencies for the power grid. We’re seeing early signs of these with commercial and private individuals selling their generated renewable energy back to the grid. These changes and others will necessitate a robust regulatory framework.
Another disruption we expect to see is the intensified electrification of the economy from transportation to the industrial sectors. This does not just mean electric vehicles but leveraging renewable sources to generate enough electricity sustainably to power energy-intensive businesses. This is since energy-intensive industrial facilities that continue to emit carbon will need to consider climate risk, sustainability, and emerging low carbon alternatives to remain competitive and relevant in the foreseeable future.
To this end, KPMG has been working closely with other countries to drive the green agenda. Globally, KPMG is a member of the World Economic Forum taskforce aimed at mobilising investment capital for emerging economies to build awareness on energy transition, identifying challenges, and developing recommendations to implement learning and bold ideas.