REC in Asia-Pacific: 76% Price Drop Expected by 2050

REC prices are expected to drop by 76% by 2050 in the Asia-Pacific region, falling from 46 to 11 USD/MWh, due to the massive increase in renewable energy generation in the region, according to a report by Wood Mackenzie.

Partagez:

The Asia-Pacific region could experience a significant drop in REC prices by 2050. According to a new study by Wood Mackenzie, these prices are expected to drop by 76%, falling from 46 USD/MWh to just 11 USD/MWh. This trend is attributed to an oversupply of REC resulting from the strong growth in renewable energy production, which is expected to quadruple over the same period.

The study, titled “Price outlook for Renewable Energy Certificates in Asia,” analyzed the effects of this increase on REC prices in six key markets in the Asia-Pacific region: Taiwan, South Korea, Australia, India, China, and Japan. The report indicates that the share of renewable energy in the energy mix of the six markets is expected to increase from 14% in 2023 to 55% by 2050.

Impact of Energy Production on REC

In parallel, the costs of producing electricity from solar and onshore wind projects are expected to decrease by at least 40% on average over the same period. This reduction in costs will make REC cheaper, as the need to subsidize projects through these certificates will become less critical. “REC play a crucial role in supporting new investments in renewable energy by providing incentive mechanisms and enabling end-users to purchase green energy credits,” said Ken Lee, Head of Asia-Pacific Power Research at Wood Mackenzie.

Oversupply of REC

Wood Mackenzie estimates that the supply of REC will continue to exceed demand until 2050, leading to continuous pressure on prices. The report specifies that the decline in fossil fuel energy production will also slow mandatory REC demand in some regional markets, as REC requirements are often imposed on fossil fuel producers.

According to Ken Lee, the total excess REC supply in five of the six markets, excluding China, is expected to increase from 13 TWh in 2023 to 241 TWh by 2050. By comparison, China represents a unique case where state policies will increase REC purchase requirements, which could stabilize prices in the country.

REC Price Evolution by Market

Currently, Taiwan and South Korea have the highest REC prices in the region. However, these prices are expected to fall by at least 70% by 2050, due to increased REC supply and reduced renewable energy production costs. Overall, average REC prices in the six markets analyzed are expected to fall from 46 USD/MWh in 2023 to just 11 USD/MWh by 2050.

A Contrasting Situation in China and Japan

In China, Wood Mackenzie’s report anticipates an increase in REC prices starting in the late 2020s. Government measures aimed at strengthening REC purchase requirements for the energy and industrial sectors should reduce the excess supply, thereby stabilizing prices.

In Japan, REC prices (between 4 and 5 USD/MWh in 2023) are not sufficient to economically support the development of new solar or wind projects. Project developers will need to turn to other mechanisms such as feed-in tariff (FiT) or corporate power purchase agreements (PPA) to ensure the profitability of their projects.

  • Populaires ​
Algeria and Angola strengthen energy cooperation at US–Africa summit
Plenitude and Modine launch 1.585 MWp solar power plant in Italy
China and the United States improve their energy performance in an unstable global context
Renewable energy: access improving, but financing still insufficient for Africa
Voluntary carbon market attracts $3 billion to industrial biomass sector
South Korea reduces its dependence on fossil fuels below 50%
In April 2025, fossil fuels represented 49.5% of South Korea's electricity mix, dropping below the symbolic threshold of 50% for the first time, primarily due to a historic decline in coal-generated electricity production.
US Senate adopts tax neutrality for advanced biofuels
The US Senate Finance Committee modifies the '45Z' tax credit to standardize the tax treatment of renewable fuels, thereby encouraging advanced biofuel production starting October 2025.
UK urged to accelerate electricity price reforms
The UK's Climate Change Committee is urging the government to quickly reduce electricity costs to facilitate the adoption of heat pumps and electric vehicles, judged too slow to achieve the set climate targets.
Brussels expands subsidies for low-carbon technologies and nuclear power
The European Commission will extend until the end of 2030 an expanded state-aid framework, allowing capitals to fund low-carbon technologies and nuclear power to preserve competitiveness against China and the United States.
Japan Faces Major Electricity Shortfall of 89 GW by 2050
Japan's grid operator forecasts an energy shortfall of up to 89 GW by 2050 due to rising demand from semiconductor manufacturing, electric vehicles, and artificial intelligence technologies.
EU Approves Targeted Energy Aid for Europe’s Heavy Industries
Energy-intensive European industries will be eligible for temporary state aid to mitigate high electricity prices, according to a new regulatory framework proposed by the European Commission under the "Clean Industrial Deal."
Mauritius launches international tender for floating power plant
Mauritius seeks international investors to swiftly build a floating power plant of around 100 MW, aiming to secure the national energy supply by January 2026 and address current production shortfalls.
Spain and Portugal Strengthen Networks Following April Blackout
Madrid announces immediate energy storage measures while Lisbon secures its electrical grid, responding to the historic outage that affected the entire Iberian Peninsula in late April.
Indonesia Commits 190 Billion USD to Expand Energy Capacity by 2034
Indonesia has unveiled its new national energy plan, projecting an increase of 69.5 GW in electricity capacity over ten years, largely funded by independent producers, to address rapidly rising domestic demand.
France: Moratorium on renewables; warning about immediate industrial impact
French Minister Agnès Pannier-Runacher condemns the parliamentary moratorium on new renewable energy installations, warning of the potential loss of 150,000 industrial jobs and increased energy dependence on foreign countries.
New European Battery Regulation Disrupts Europe’s Industrial Sector
The European battery regulation, fully effective from August 18, significantly alters industrial requirements related to electric cars and bicycles, imposing strict rules on recycling, supply chains, and transparency for companies.
European Parliament urges Brussels to act on energy grids
The European Parliament calls on the Commission to strengthen energy infrastructure and accelerate the implementation of the Clean Industrial Deal to enhance the continent's energy flexibility and security amid increased market volatility.
Europe Commits Major Investments to Electricity Grids and the Clean Industrial Deal
The European Commission unveils an ambitious plan to modernize electricity grids and introduces the Clean Industrial Deal, mobilizing hundreds of billions of euros to strengthen the continent's industrial and energy autonomy.
Wood Mackenzie highlights advantage of regulated utilities amid data centre boom
In the United States, regulated electric grid operators hold a decisive advantage in connecting new data centres to the grid, now representing 134 GW of projects, according to a Wood Mackenzie report published on June 19.
France sets renewable energy target of 200 TWh by 2030
The French National Assembly approves a specific target of 200 TWh renewable electricity production by 2030 within a legislative text extensively debated about the future national energy mix.
United States: emissions stagnate in 2024, uncertainty under Trump administration
In 2024, US CO₂ emissions remain stable at 5.1bn tonnes, as the Trump administration prepares hydrocarbon-friendly energy policies, raising questions about the future evolution of the American market.
France: Anticipated Energy Decree, National Assembly Denounces Democratic Risk
The early publication of France's energy decree triggers strong parliamentary reactions, as the government aims to rapidly secure investments in nuclear and other energy sectors.
Spain Blackout: Analysis of Causes and European Financing Plan Approved
Seven weeks after the major Iberian power outage, Spain identifies technical network failures, while the European Investment Bank approves major funding to strengthen the interconnection with France.
European Union Sets Precise Timeline for Russian Gas Import Ban
The European Union has announced a detailed schedule aiming to definitively halt Russian gas imports by the end of 2027, anticipating internal legal and commercial challenges to overcome.
Madagascar invests in thermal power plant to counter chronic power cuts
Madagascar plans the imminent opening of a 105 MW thermal power plant to swiftly stabilise its electricity grid, severely affected in major urban areas, while simultaneously developing renewable energy projects.

LEGAL

FOSSILS

POLICY

RENEWABLE

PLUS

© XMARKET PUBLISHING

Welcome

Your subscription

Included in this subscription:

COMMUNICATE ON ENERGYNEWS