A shift from coal-fired power to clean energy will be a focus for utility providers in Asia in 2022, according to S&P Global ratings.
In a new report, the agency has predicted increased spending on renewables infrastructure to accelerate the transition.
“We see momentum gaining over the next one to three years to transition away from coal,” said S&P Global Ratings credit analyst Abhishek Dangra.
“Environmental, social and governance factors will drive investments and can significantly alter the business mix and financial profiles of rated entities.”
The agency says that in China, for example, the country’s ‘Big Five’ utility majors will likely invest to meet the country’s carbon targets earlier.
This means more spending not just on renewables like wind and solar, but also on other types of cleaner fuel types.
“Large-scale nuclear plants in China, and liquified natural gas terminals with gas projects will also act as a bridge in the drive for energy transition,” said S&P credit analyst Apple Li.
The agency says the long-term reduction of coal-fired power remains on track in China.
It expects the share of coal in the electricity-generation mix to decline to 45% by 2030, from over 70% in 2005.