INTERVIEW: Market-oriented approaches key to unlocking healthy growth in renewables - Univers

Countries across Asia have experienced rapid growth in renewable energy capacity in recent years, and it is essential to leverage market-oriented approaches -- rather than relying solely on mandates or subsidies -- to support healthy, long-term growth, Edward Zhao, global vice president of the Asia Renewable Business Unit at Univers, said.

Univers is a Singapore-headquartered international company specializing in digital technologies and products for renewable energy assets. It currently manages over 788 GW of energy assets globally, ranking first among its peers.

Zhao, in a recent interview with Platts, part of S&P Global Commodity Insights, emphasized the importance of market-based incentives to accelerate the adoption of renewable energy and battery energy storage systems.

ASEAN's synergy

Zhao highlighted that ASEAN countries have begun fostering synergy to develop a common regional power market -- similar to the collaboration seen among European nations.

"Of course, in terms of infrastructure, you cannot compare them because Europe has taken many years to build up the infrastructure for grids. But the good thing is, in ASEAN, even though we have some challenges, in general, I think it is growing. There is demand in all countries. And everybody sees that if they isolate themselves, they will face a bigger challenge," he said.

"With Singapore leading this initiative by the green electricity import program, that gave a very good push from the demand perspective," he added.

Zhao pointed out that building a regional market could face technical and regulatory challenges, noting that power grids across ASEAN countries have varying technical specifications and are at different stages of development.

"Singapore has the most developed and advanced grid infrastructure in the region. Malaysia, Thailand and Indonesia have relatively mature systems that are continuing to evolve. Meanwhile, countries such as Cambodia, parts of the Philippines, Myanmar and Laos are still in the earlier phases of grid development," he said.

Zhao added that it is up to each country's regulators and their advisory teams to determine whether and how to facilitate cross-border trading of renewable power.

"But using market methods has always been the best way," he said.

China's transformation

In 2025, China launched a systematic reform to introduce more market-oriented measures into its power markets, including reforming the guaranteed purchase mechanism for renewable electricity and halting mandatory targets for installing BESS capacities.

Zhao highlighted that China's renewable and BESS sectors are moving toward more market-oriented approaches, with commercial decisions increasingly driven by pricing signals rather than mandates or subsidies.

While short-term uncertainty around electricity pricing -- especially due to varying mechanisms across provinces -- can present challenges, he said the broader direction is clear: the market is becoming more open and competitive, encouraging investments to flow where they make the most sense.

In this environment, investors are now treating BESS assets as commercial assets and developing strategies to maximize their returns in the power markets, he added.

BESS evolution

Zhao said that, contrary to past perceptions, BESS is no longer a highly expensive or economically unviable technology. He noted that costs have dropped significantly and that there is a growing number of large-scale BESS projects in China, Europe and the Middle East.

"The costs of BESS have dramatically dropped. It is not a 5% or 10% reduction. It is probably close to a 20% reduction every half year in terms of the storage hardware," he said.

Zhao added that Saudi Arabia and the UAE have become emerging markets for large-scale BESS deployment.

"In Saudi Arabia, they have 12.5 GWh of BESS for a single project. Another instance is in the UAE; there is a project with 19 GWh of BESS capacity, one of the largest solar and BESS projects in the world," he said.

A renewable ecosystem

Zhao said that Univers offers products supporting the management of the entire renewable ecosystem, including renewable and BESS electricity supply management, consumption management at load centers and micro-grid management connecting electricity suppliers and consumers.

For power market participants, Univers provides trading terminal software that helps customers manage trading strategies -- such as supply and demand forecasting, optimizing BESS charge and discharge schedules and closely monitoring and controlling both commercial activities and the physical status of energy assets in fast-paced power markets.

Zhao said that Univers has developed an AI agent to support BESS asset trading, with a pilot project underway in a province in eastern China, which has significant power demand and a dynamic market.

"It is achieving a good result, but we still need to continue training this AI agent," he said.

Zhao added that having these smart trading and asset management systems in place would support various use cases.

For instance, Univers' systems can help reduce the intermittency of renewable electricity inputs during hydrogen production through electrolysis while also assisting the electric vehicle sector in managing the volatility of charging demand driven by the growing global adoption of EVs.