New energy needs storage systems and stable policies

Generating more power from renewable sources is only a part of the solution to meet the world’s growing energy demand.

Having storage facilities, upgrading infrastructure to deliver that power to consumers, and providing a stable-policy blanket are just as essential, according to a panel of leading energy producers and investors at HSBC Global Investment Summit 2025.

Demand for electricity is getting a boost from factors including the rollout of electric vehicle charging stations and data centres that enable new technologies such as Artificial Intelligence. The focus on net zero emission goals and the energy transition is driving demand for renewables such as wind and solar for generating electricity.

The panel discussed how a lot of investment is required to go towards the transmission and distribution infrastructure, regardless of the source of generation. But not enough is seen as being done to build or upgrade the transmission and distribution facilities needed to utilise the capacity being added, with existing infrastructure being old and inefficient in some countries and regions.

They also talked about how the resulting grid congestion, where transmission capacity is insufficient to take the power generated to consumers, is creating inefficiencies in electricity grids.

Battery storage

Battery storage facilities are being seen as the key to address such inefficiencies and make better use of electricity generated from solar and wind facilities, which are not available on a 24/7 basis. The good news is that prices of battery storage are becoming competitive, similar to the pattern the world saw with solar panel prices in the past.

The panel discussed the importance of focusing on accelerating the scale up of wind, solar, and complementing that with battery storage. AI solutions integrated with battery storage and generation systems, which help to supply electricity round-the-clock to consumers, is the future of new energy.

In addition to improving the performance of the electricity grid, battery storage solutions also create energy security for consumers, and are being embedded in data centres, buildings, and air-conditioning systems.

Inclusive solutions

Renewables will likely grow faster than other solutions because they remain in great demand. Sustainable aviation fuel is one alternative that could help decarbonize the transportation sector. Green hydrogen is another.

Green hydrogen is a source of clean energy that is produced from the electrolysis of water, using electricity from green sources. Hydrogen’s flammability and high project costs make it an niche solution today, but if new technologies can find a cheaper way to produce it, green hydrogen can reach scale.

Even so, it is important to have an inclusive energy system, where nuclear power and even natural gas – an important transition fuel – are considered among alternatives for generation.

Hans Kobler, Founder and Managing Partner, Energy Impact Partners, stressed the importance of both new and existing technologies. He said the new energy and the fossil fuels industries were realising that they needed each other.

“You need the fossil fuels still to complement the technology companies from natural gas, to balance the peaks and valleys of the renewable development,” he said.

Policies and impact

The panel considered how energy policies globally, which are increasingly being driven by regional or local concerns, are leading to uncertainty. Stability in government and regulatory policies are important to attract investments.

The panel also discussed the impact from a change in US policies. The Trump administration recently lifted restrictions on drilling and export of fossil fuels while placing some curbs on wind power. That stance is fueling concerns that renewables could be crowded out in the future.

US policies are likely to have far-reaching implications, even in Asia. They not only influence financial decisions by investors in wind and solar ventures, but also have an indirect impact, in the form of higher interest rates.

That is because energy from fossil fuel sources is inflationary, and contributes to tighter monetary policies. For renewable energy companies, that means higher capital expenditure, which accounts for up to 90% of renewable energy costs.

Mr Kobler said he wished for governments to refrain from picking one technology over others, while providing provide stability.

“We have to plan for decades, not for the two- or four-year election cycle,” he said. “Give us stability, and the technology will make it happen.”

Even so, the large demand for green technologies meant that if New Energy companies faced challenges in the US, they were likely to be welcomed with funding in other regions, such as the Middle East or Japan.

“I think it’s a big opportunity for the rest of the world to become a hub, a driver” for green innovation, he said.