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The Singapore government has committed to enhance the island nation’s green transition ambition to achieve net zero by 2050, a boost from Singapore’s previous goal set in 2020. The energy regulator in Singapore has concluded that net-zero 2050 is a realistic goal. Five government ministries in Singapore are spearheading an effort involving the entire nation to advance this national agenda.
Singapore is the 20th smallest country on the planet and has significant limitations when it comes to natural resources. Renewable energy sources like wind (both onshore and offshore), large-scale solar, and hydropower are not available to Singapore.
Singapore's energy sector has come a long way since its early days. Over the last 50 years, Singapore has moved from oil to natural gas as fuel for power generation, which today accounts for 95% of Singapore's electricity. While Singapore has achieved its 2020 solar target of 350MWp, Singapore is looking to achieve a new solar target of at least 2GWp by 2030 and an energy storage deployment target of at least 200MW beyond 2025. In addition, Singapore is looking to achieve its goal of 4GW of electricity imports by 2035.
To achieve its accelerated targets and given its geographical limitations, Singapore will need to undergo transformational changes. Singapore’s energy regulator has noted the following as being key to maximising Singapore’s chances to succeed:
Most of the above are new to Singapore, though they may be more developed and tested in other jurisdictions. In developing and implementing these strategies, the experience of other jurisdictions would be a valuable resource for Singapore. The knowledge and expertise of international energy transition and renewable energy players will play a key role in the changing energy landscape in Singapore.
Renewable Energy Imports
Singapore received its first renewable energy import from Laos in June this year under the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. This is on the back of a two-year PPA signed by Singapore’s Keppel Electric, a subsidiary of Keppel, a Singapore-based conglomerate, with Electricite du Laos, for the import of up to 100 MW of renewable hydropower from Laos.
Given Singapore’s goal of 4GW of electricity imports into Singapore by 2035, much more is anticipated to follow. To accelerate the development of renewable energy imports, regional power grids and infrastructure would be critical.
While this is a new concept for Singapore, such cross-border cooperation has been seen in other parts of the world over the past decade or so. For example, by 2016, Morocco had a 1,400 MW link with Spain as well as successful solar and wind energy programs in place, making importing clean power from Morocco feasible without requiring significant additional investment in transmission infrastructure. Contractual structuring, investment models and regulatory frameworks used in such jurisdictions would serve as useful references when implementing similar projects in Singapore.
Singapore sees hydrogen as a potential major alternative energy source, one which could supply up to half of the country’s power needs by 2050. Singapore has begun investing in hydrogen-ready infrastructure, including Singapore’s first hydrogen-ready power plant (being developed by Keppel and constructed by a Mitsubishi Power-Jurong Engineering consortium). The Singapore government has also committed to invest a further S$129 million into its low-carbon energy research programme, a top-up from the initial S$55 million that was awarded in October 2021. An EOI for a small-scale commercial project utilising ammonia for power generation will also be launched soon to assess the viability of ammonia as a hydrogen carrier (and also as a direct fuel).
The technology for the production, conversion, storage, transportation, import, and end use of low-carbon hydrogen in (and into) Singapore remains nascent, but looks set to evolve rapidly over the years to come. How fast hydrogen can be adopted as an alternative energy source in Singapore would depend on (amongst other things) the extent and quality of the R&D and financial investments injected into the development of such technology and hydrogen-ready infrastructure. The existence of a robust supply chain will also be critical.
We expect that this developing area would be an attractive one for international energy transition players across all parts of the low-carbon hydrogen supply chain. For more information on hydrogen projects, click here.
Solar and ESS
Singapore has seen some success so far in deploying highly efficient solar systems, but there is still room to maximise Singapore’s solar potential. Solar systems go hand in hand with ESS, which is generally regarded as a viable solution to address solar intermittency and ensure system reliability. The Energy Market Authority (EMA) recently appointed Sembcorp Industries to build, own and operate 200MW/200MWh of ESS to enhance the resilience of Singapore’s energy supply and power grid. When operational in November 2022, it will be the largest ESS deployment in Southeast Asia and one of the fastest of its size to be deployed.
Going forward, further R&D and investment into the technological development of solar panels and ESS would be critical in enabling solar power and ESS to become as cost-effective and efficient as possible.
The U.S. and EU are two of the regions with the highest solar capacities in the world, with billion-dollar solar-cum-storage projects (such as the Gemini Project) being developed and financed. International players with knowledge and familiarity with the technological, operational, legal, and regulatory issues involved in such large-scale solar-cum-storage projects would play a key role in Singapore’s growth in this sector.
New Low-Carbon Supply Technologies
Apart from hydrogen, possible new low-carbon energy supply sources for Singapore include geothermal energy and nuclear energy, and perhaps even biomethane and CCUS.
These technologies remain untested in Singapore, but not in other parts of the world. For example, the United States has studied CCUS in detail and has, since 2020, implemented specific incentives for CCUS. Singapore will look towards global investment and technological development trends in determining whether these technologies could succeed in Singapore.
Carbon Markets and Carbon Credits
A common issue that cuts across the above strategies and new technologies is cost―specifically, ensuring that the cost of producing low-carbon energy using these strategies and technologies is kept low so that the use of energy remains affordable. One way to address this is allowing the use of appropriately derived and certified carbon credits (including from other jurisdictions), coupled with a robust and credible carbon market.
Singapore has taken steps in this direction. Singapore has recently agreed to collaborate with Vietnam (another ASEAN country that has committed to achieving net zero by 2050) on the establishment of transferable carbon credits and other energy initiatives. This is Singapore’s first carbon credits agreement signed with another ASEAN country. The Singapore government has also announced that businesses subject to carbon tax in Singapore can, from 2024, offset a portion of their taxable emissions using high-quality, international carbon credits.
A new step towards Singapore’s net-zero 2050 goal is announced (seemingly) almost every other week, whether by the Singapore government or private sector player(s). With COP27 upcoming in November, where further details on new initiatives are anticipated, Singapore is ripe with opportunities for international energy transition players.