November 24, 2020

Commentary: That low-carbon future for Singapore isn’t so far-fetched

8 min read

SINGAPORE: The question of whether Singapore can or, more interestingly, should strive toward low-carbon energy transition has been raised recently in climate debates.

In an opinion piece by The Straits Times titled Can Singapore really transit to a post-oil economy?, economists Dr Tilak Doshi and Professor Euston Quah responded to a CNA commentary by Yale-NUS climate data scientist Angel Hsu and attempted to make a case against what they call “an over-hasty transition to newer but less efficient technologies”.

READ: Commentary: Forget bamboo straws. Let’s name the elephants in the room of Singapore’s climate debate

The opinion piece made a strong statement: “Policies fashioned by green ideology will lead to Singapore collapsing economically first before it may drown in sea level rise”.

However, we find the narrative of green ideology posing risk for Singapore’s development rather unbalanced.

The authors argue that Singapore’s legacy as a major petrochemical and refining hub must be central to climate policy discussions, which is indeed undeniable. Oil refining, petrochemicals and specialty chemicals production is one of the key pillars of Singapore’s economy, contributing around 22 per cent of nominal gross domestic product in 2018.

READ: Commentary: Have Singaporeans been mollycoddled on climate change?

But a green economy does not preclude the petrochemical and refining industry altogether, and there are multiple scenarios of a low-carbon transition for Singapore.

For example, adopting technologies for carbon capture, storage and utilisation could cut carbon emissions of the petroleum refinery and chemical industries without significantly affecting economic output.

However, the technology’s cost and energy efficiency have to be improved first, which is why Singapore needs to focus on research and development in that area.

Jurong Island
File photo of infrastructure on Jurong Island. (Photo: AFP) 

It is fair to argue that pace of energy transition is critical – rapid transition might bring devastating consequences. But there are solid reasons to suggest that achieving a greener economy deserves to be an end-goal for Singapore.

A TRANSITION TOWARDS RENEWABLES IS ON THE HORIZON

One of the criticisms that the green energy transition received in the opinion piece concerned its slow pace.

But oil giant BP’s 2019 Energy Outlook suggests that renewable energy’s penetration into the global energy system is poised to be the quickest compared to any other fuel in history.

While oil and gas took around 40 to 50 years to rise from 1 per cent to 10 per cent in the global energy mix, renewables can take less than 25 years to achieve the same share.

READ:  Commentary: Big Oil talks a good low-carbon game but does little to back that up

Further data from BP and the US Department of Energy indicate that renewable energy would comprise around a third of global electricity generation by 2040. At the same time, in Southeast Asia, the share of renewables in electricity supply would be around 15 per cent in 2040.

Although that seems to be mild progress, a higher share of renewable electricity paves the way for deeper decarbonisation of Singapore. To really understand the island’s low-carbon transition, we must take a closer look at the ongoing moves toward a greener economy and the opportunities these afford.

HOW THE CLEAN ENERGY TRANSITION IS HAPPENING

At the recent Institute of Policy Studies Perspectives 2020 conference, Minister for Trade and Industry Chan Chun Sing said that Singapore is looking at a post-fossil fuel future given the global trends in decarbonisation.

He said however, that this was dependent on how fast Singapore is able to adopt the necessary technologies and address the shift in economic structure that decarbonisation would bring.

CCS at IPS Conference Jan 20, 2020
Minister for Trade and Industry Mr Chan Chun Sing speaking at the Institute of Policy Studies’ Singapore Perspectives Conference 2020 on Jan 20, 2020.

Last year, Mr Chan also announced that Singapore would develop “four switches”: Natural gas, solar power and energy storage, regional power grid and low-carbon energy options.

NATURAL GAS

Despite the growth in solar photovoltaic (PV) capacity, Singapore will continue to rely on natural gas over the next 50 years. Natural gas is the cleanest form of fossil fuels, at 50 per cent of carbon intensity of coal and 70 per cent that of oil.

Singapore, like all countries, is concerned about threats to energy security, such as supply disruptions and price increases.

READ: Commentary: Singapore’s rising natural gas ambitions face big challenges

Because we are still studying how much solar electricity Singapore’s grid can take while still ensuring stability and reliability of supply, natural gas is a compromise between more polluting fossil fuels and renewable energy.

SOLAR POWER AND STORAGE

Singapore’s total electricity generation capacity is around 1.9 times the peak system demand, according to the Energy Market Authority’s Singapore Energy Statistics 2019. 

Solar PVs contributed 174.3 MW, or 1.3 per cent of total electricity capacity in 2019 but more information on solar energy demand can help inform Singapore’s energy transition.

The lack of technical need for additional capacity, and a limited understanding of the percentage of solar energy in Singapore’s current energy mix could also be a reason for the inertia in adopting solar energy at a faster pace.

READ: Commentary: A sustainable future increasingly looks more Chinese

This shift towards solar energy should focus on both reducing peak demand and consuming less electricity all around. 

Greater transparency in data and better understanding of energy terminologies could be helpful for an assessment of how Singapore’s electricity mix could become greener.

Additionally, the traditionally vertically integrated power generation utilities were fully divested from Temasek Holdings in December 2008. 

But corporate ownership of utilities in Singapore could add to delays in decision-making on adoption of renewables, especially when Singapore’s Nationally Determined Contribution or climate pledge currently does not include a specific renewable energy target.

Solar panels Sembcorp
Solar panels on the rooftop of an HDB block in Singapore. (Photo: Sembcorp Industries)

However, recent initiatives by the Singapore Government inspire optimism for the future of solar PV on the island. 

The second “switch”, solar power, sets ambitious targets of reaching at least 2 gigawatt peak (GWp) of installed capacity by 2030, or around 4 per cent of current electricity demand.

Knowing that intermittency of generation is one of the key barriers to solar power development, the Singapore Government is planning to deploy energy storage capacity of 200 megawatts beyond 2025.

This way the power can be accumulated when the sun is shining and used later to minimise potential interruptions in electricity supply.

READ: Commentary: The future for Singapore’s energy burns bright

Among measures to achieve the solar target is the installation of decentralised solar power in residential sector.

A significant progress in that area was made by the SolarNova programme launched in 2014 by HDB and EDB of Singapore. 

Since its launch, the programme has installed solar panels on rooftops of about 2,000 HDB blocks, with the installation at additional 2,370 HDB blocks ongoing.

It is worth noting that large-scale solar power in Singapore achieved “grid parity” in 2013, meaning that the cost of solar electricity generation has become equal to or less than that of conventional energy.

Government-led energy storage deployment, falling costs for utility-scale battery storage and grid parity of solar energy build strong prospects for the solar power as commercially feasible and promising industry in Singapore.

A REGIONAL POWER GRID

The Government is also exploring the possibility of creating a regional power grid as the third switch. Creation of such a grid can open vast opportunities for renewable energy trade.

Power Station 01
File photo of a power station in Singapore. (Photo: Jeremy Long)

For instance, companies in Singapore could invest in regional renewable energy projects and use renewable energy certificates (RECs) to receive the same amount of electricity from the grid.

RECs are proof of electricity generation from renewable sources, and can be bought and sold by companies to achieve their green targets. In 2019, Singapore utility firm SP Group became the first authorised issuer of renewable energy certificates (REC) in the Asia Pacific.

HYDROGEN AND CARBON CAPTUREAND UTILISATION

Besides solar power, Singapore is also tapping into low-carbon energy alternatives, named a fourth switch.

Hydrogen as a clean fuel is gaining attention in Singapore’s energy agenda. Last year, the National Climate Change Secretariat, housed under the Strategy Group in the Prime Minister’s Office announced a tender for a feasibility study of hydrogen imports and downstream applications.

READ: Explainer: Why Asia’s biggest economies are backing hydrogen fuel cell cars

Development of hydrogen in Singapore’s energy system could allow to significantly reduce carbon emissions and boost production of valuable chemicals, provided that hydrogen is generated using renewable energy. Currently, the vast majority of hydrogen is generated using natural gas.

Another strategic opportunity pursued by the government is carbon capture and utilisation (CCU). 

Singapore has a number of stationary sources of carbon emissions including refineries, power plants and petrochemical facilities. Carbon capture technology traps the emitted carbon, which then can either be transported to a geographical storage or converted to other valuable products.

Lack of available storage sites in Singapore makes utilisation of captured carbon, for example to produce methanol or mineral aggregates, a meaningful option to reduce the island’s emissions and capitalise on its economic value.

Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu
Carbon dioxide storage tanks are seen at a cement plant and carbon capture facility in Wuhu, Anhui province, China September 11, 2019. Picture taken September 11, 2019. REUTERS/David Stanway

With access to hydrogen, carbon dioxide could be used to produce fuel and chemical feedstock, which can supply domestic needs or sold internationally. Carbon dioxide can also be utilised in production of construction materials.

WHAT CAN BE DONE NEXT?

Singapore should continue its commitment to decarbonising its economy outside of the energy generation sector.

Solar power, hydrogen, carbon capture and utilisation and other energy efficiency technologies have a strong potential to reduce Singapore’s emissions while contributing to its economy.

READ: Commentary: What if governments and firms measure the one thing that matters most – carbon productivity?

Energy security cannot be the last concern for Singapore given its heavy reliance on natural gas imports for power generation. Rising demand for liquefied natural gas (LNG), mostly driven by Asia, renders Singapore’s energy sector potentially vulnerable to volatility and price shocks.

By diversifying its energy mix, Singapore can reduce its dependence on imported LNG and strengthen its energy resilience.

Therefore, the focus should be on controlling the growth of natural gas consumption. It doesn’t matter how laudable Singapore’s solar targets are if the growth in energy consumption offsets renewable energy capacity additions. Singapore should strive toward meeting new energy demand through expansion of solar power deployment and energy efficiency measures.

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One critical way to facilitate that is setting a more ambitious Nationally Determined Contribution (NDC) for 2030.

At the Madrid COP25 climate conference last December, Singapore’s Minister for the Environment and Water Resources Masagos Zulkifli announced in his speech that Singapore will update its NDC and communicate a long-term low emissions strategy soon.

Singapore’s updated NDC should translate into more specific targets for long-term energy mix of Singapore. 

Having specific targets for solar and hydrogen will indeed send a market signal and galvanise action toward a greener future in Singapore.

Magzhan Sovetbek is a Research Associate at the Energy Studies Institute, National University of Singapore. Melissa Low is a Research Fellow at the Energy Studies Institute, National University of Singapore.