Commentary: Is Singapore banking too much on emerging tech in reaching net zero by 2050?

SINGAPORE: Singapore’s net-zero transition will depend on emerging technologies, which won’t come without unknowns.

This week, the Energy Market Authority (EMA) released the Energy 2050 Committee Report, setting out strategies to help the power generation sector get to net zero by or around 2050. The headline message was that it is “technically viable for the Singapore power sector to achieve net-zero emissions while maintaining energy security and affordability”.

Although not an official policy document, it is reasonable to assume that the report offers a robust indication of the priorities and pathways which Singapore will pursue.

Technology plays a central role, as there is considerable commitment to a mix of emerging technologies, which we can loosely classify as being a mix of “hard” and “soft” solutions.

Hard technologies include hydrogen, geothermal energy, carbon capture and nuclear power, while soft technologies include wider use of digital technologies like artificial intelligence, machine learning and advanced modelling. 

The important roles of regional and international power and carbon trading are also highlighted. Such market structures have an impact on how clean energy solutions can develop.

The report outlines three transition scenarios for Singapore: The “clean energy renaissance”, the “climate action bloc” and the “emergent technology trailblazer”. Each projects a varying energy mix by 2050, depending on geopolitical and technological developments.

Central to each scenario is the fostering and deploying of new technologies and increasing the diversity of energy supply to help enhance Singapore’s energy security. Each scenario makes room for increased electricity imports and growth of the hydrogen economy, while two include a commitment to nuclear energy.

There is a lengthy discussion around the adoption of smart power grids, which could help optimise infrastructure design and energy use.

Overall, the report presents a very different energy landscape than what we have today, where 95 per cent of Singapore’s energy comes from natural gas, a fossil fuel. The question naturally arises as to whether the transition strategies discussed in the report are banking too heavily on emerging technology, to get to net zero by or around 2050.

RISKS IN BANKING ON EMERGING ENERGY SOLUTIONS

The Energy 2050 Report has been developed with caution in mind. It classifies three critical uncertainties that could make the transition hard, even impossible, to achieve by 2050.

These help us understand why Singapore’s timeline for achieving net-zero emissions has progressed from “as soon as viable in the second half of the century” to “by or around mid-century”, reflecting a clear desire to target 2050 while still providing some flexibility.

The first critical uncertainty concerns the hard technologies – referred to in the report as low-carbon energy technologies. Across the scenarios, hydrogen – an energy source created by splitting water with an electrical current – contributes anywhere from 10 per cent to 60 per cent of the power supply.

While there is considerable promise in hydrogen for power generation, as of today, global supply chains for it are unclear and prices have not stabilised. Hydrogen is still a nascent technology, and the costs of production are currently too high to be commercially attractive.

But there is strong momentum in hydrogen production technologies, making now a ripe time to commit. According to the International Energy Agency, the cost of producing hydrogen from renewable electricity could fall by 30 per cent by 2030, as renewables become cheaper and hydrogen production scales up.

The report notes that “it is not certain when and where low-carbon hydrogen will be produced at scale efficiently and how it can be transported to Singapore in a secure and cost-effective manner”. It even recognises that in the early stages, it may be necessary for hydrogen to be produced from fossil fuels to ensure affordability.

This may at first seem undesirable, since the cleanest version of hydrogen would use renewable energy in the production process rather than fossil fuels. The compromise would however allow for early investment into necessary hydrogen-related infrastructure.

Other low-carbon energy sources are discussed too, also having unclear timing for market readiness. Geothermal energy – energy generated from naturally occurring heat trapped in the ground – is one such alternative source.

Precisely what the potential within Singapore is, is unclear. Singapore has a very modest landmass to draw upon. The EMA has initiated an exploratory study into the geothermal potential for Singapore, and results are expected to emerge by the end of 2022.

Geothermal energy, similar to solar energy, may have an important role, but will not deliver the scale of energy to meet national needs. Nuclear power is the other major low-carbon alternative presented as a possible option within some of the scenarios.

In addition to uncertainties around emerging nuclear technologies, there are potentially complex regulatory and regional integration issues that may need navigating.

UNCERTAINTY OVER DIGITAL TECHNOLOGY AND INTERNATIONAL MARKETS

The second critical uncertainty concerns the readiness of digital technologies. Large quantities of data need to be captured, monitored, and carefully analysed for the distribution of energy resources and effective uses of smart energy grids.

Data centres are enabling infrastructure where necessary data is stored and analysed. But the industry has been subject to a moratorium in recent years due to its high energy requirements, with the Government signalling it will be selective about building new data centres in the future.

The third critical uncertainty surrounds regional and international coordination for power and carbon markets. For many years, there have been discussions of an ASEAN power grid.

Such a grid could allow for more options for low-carbon power generation: Our neighbours with more potential for renewable energy could produce green electricity to export to Singapore. 

But this is not happening at a large scale yet, since countries within the region still need to decarbonise their power systems, creating a lot of pressure to keep domestically produced clean electricity in the country where it is generated.

Sun Cable’s Australia-Asia PowerLink, an undersea cable that will transport solar energy from Darwin to Singapore via Indonesia, is an example where wider international grid connectivity could be feasible. The project could supply up to 15 per cent of Singapore’s electricity needs.

What is also unclear is how international carbon markets may operate. Currently, there are no universal rules that define what is tradeable, where and how. There are efforts to develop agreed global principles, but they will take time to develop.

Developments in global carbon market designs will influence the design and effectiveness of local carbon pricing mechanisms.

WILL 30 YEARS TO REACH NET ZERO BE ENOUGH?

Net zero in the power sector will not be achieved without a comprehensive approach. While there are aspects of the transition that can be solved by investment, some obstacles cannot be overcome with money alone.

Efforts have been underway within Singapore and elsewhere to promote behavioural change and reduce demand for the energy we use. There have been some successes and some failures.

Singapore still heavily relies on natural gas for power generation, offering both opportunities and challenges. The opportunity lies in upgrading infrastructure that can work with new fuels such as hydrogen.

The challenge is that this infrastructure development will take time. We have roughly 30 years, and that should be more than enough. Carbon capture, geothermal and nuclear are relatively mature, while hydrogen is fast becoming commercially viable.

The next few years are a useful window of time to develop the necessary infrastructure, which will then be ready for use when costs become much more attractive.

There are uncertainties with the emerging technologies Singapore is banking on to decarbonise its energy sector, but these are openly recognised. This does not mean we will be able to alleviate them, but at least we face them with eyes wide open.

At the same time, reaching net zero with the limited time we have necessitates bold changes in technology, modes of business and lifestyles. Ambition in the presence of uncertainty is a prerequisite to being on the right pathway.

David C Broadstock is a Senior Research Fellow and the Head of the Energy Economics Division at the Energy Studies Institute.