Singapore’s Energy Decarbonisation Must Be Pragmatic

Tan Wooi Leong
Managing Director, Energy & Industrial, Surbana Jurong

In the last year, Singapore has made great strides in committing to a carbon-free future. Led by the ambitious Singapore Green Plan 2030 and Singapore’s Energy 2050 Plan, we’ve seen decarbonisation intiatives kick off in sectors important to Singapore’s story and economic journey: in the maritime sector with MPA’s 2050 decarbonisation blueprint and with the public sector targeting Net Zero by 2045. As we move to realise these bold goals, however, it remains important to retain a strong strain of old-fashioned Singaporean prudence. Pragmatism—balancing our ideals for a sustainable future with the realities of our uncertain present—must be the fulcrum upon which we balance the lever of energy decarbonisation.

Decarbonisation still a priority

In 2022, the government floated a wide array of game-changing sustainability measures—from progressive carbon taxes and coastal flood protection to electric vehicle rebates and green finance. Budget 2023 prioritised support for Singaporeans and businesses in the face of a heightened cost of living and major economic headwinds. But it has not shaken Singapore’s commitment to decarbonisation, yet it throws light on the larger world Singapore must exist in and interact with: clouded by the murky waters of conflict, economic instability, and geopolitical competition. But as the Chinese proverb reminds us, muddy waters make for better fishing. There is certainly still great potential in pursuing decarbonisation, but the approach must be cautious and not compulsive. It must be driven by national and public interest.

In Singapore, access to electricity is often taken for granted, but there is a carefully managed background of energy pricing, sourcing, and storage that allows us to wake up, turn on the lights, and enjoy hot water every morning without a second thought. Many less developed nations struggle with this background and have neither universal electricity access nor relief from paralysing blackouts that halt normal life and throttle economic development and public services. Energy management and infrastructure can be a difficult maze to navigate even in the best of times, with many juggled variables to account for. With the war raging on in Ukraine and global energy and commodity prices leaping up, these are far from the best of times.

Energy decarbonisation is not immune to hiccups and speed bumps. The difficulties faced by the proposed solar power cable from Australia to Singapore are proof of this.

In reality, there is a basic gap for long-term decarbonisation: nations that have abundant renewable energy capture potential are often different from and far away from nations that have great renewable energy demand, such as Singapore.

Getting conventional energy such as oil and gas from point A to B is already a journey fraught with risk and market swings; moving renewable energy between countries is even more so. The intermittent and seasonal nature of renewable power generation combined with limited international transmission avenues makes closing this gap between renewable energy suppliers and consumers harder still. The differences, both significant and subtle, in power grids between even neighbouring nations, let alone far-flung ones, complicates this further. A pragmatic approach will need to mitigate these if we hope to achieve energy decarbonisation targets in Singapore and beyond.

Energy transition strategies key to decarbonisation

Pragmatism can sometimes be a big word for skeptics of energy decarbonisation to hide behind. What does it instead mean to embrace pragmatism on the journey to net zero? We can imagine a relay race, where runners cannot dash ahead without receiving a baton from the previous runner. Successful energy decarbonisation is the last runner in the relay race currently being run against climate change. It has the all-important task of crossing the finishing line. But it cannot move an inch until it has been relayed the baton.

There are two aspects of pragmatic energy decarbonisation we can draw from this picture: first, the understated importance of transitions; second, how critical it is to keep our runner in the race until the baton has been passed.

Transitional energy decarbonisation is often seen to as a means to an end but is also an end unto itself: it is the passing of the baton in the relay race. The transition from climate-damaging fossil fuels and energy, such as oil and coal, to climate-friendly ones, such as renewables and nuclear, is not one step or ten but a continuous spectrum. One that moves from using relatively simple, scale-economised, time-tested technology and processes to separate energy from nature (coal mining, oil drilling) to technically complex and risky new implements that seek to draw from nature and not scar it (photovoltaic panels, green hydrogen).

As we move along this transitional spectrum towards technology-intensive energy, the energy hubs of today may not be the hubs of tomorrow. In the past, energy exporters were those that happened to possess deposits in their territory. As the future of energy is tied to technological advancement—better, more efficient solar panels and batteries, new generations of nuclear power and hydrogen technology—circumstantial natural deposits become less important than a country’s technological and engineering prowess.

Greater, more fierce competition can be expected as upstart hubs jostle to establish themselves and established hubs preserve their advantage. Singapore will need to enter the fray and invest in transitional fuels as well: we cannot turn our back on them and wait to adopt the final winner. Those hubs that establish dominance in one transitional technology can then benefit from existing expertise and infrastructure to advance to the next technological milestone. The existing frictions in global geopolitics and trade relations may possibly be compounded further, and energy security may not be as straightforward.

Energy from oil, for example, is relatively light on closely guarded intellectual property since the value is in the commodity and not the extractive technology. The reversal of this dynamic with cheap power from sophisticated, capital-intensive, patented renewable capture technology may lead to new and unforeseen threats to Singapore’s energy security.

This brings us to the second aspect of pragmatic energy decarbonisation: keeping our baton-holding runner in the race until they’ve done their job.

That Singapore is developed enough today to enjoy a vast range of net zero energy options—from solar to hydrogen—is in large part due to the consistent energy security and high-quality industrialisation that our early dependence on hydrocarbons has passed on to us. As new twists and turns in global energy markets and energy transitions rock the boat, it is paramount that we keep our current runner going strong until it has done its part. We must ensure that it supports our economy and society until we can confidently transition to the next runner. It must stay in the race to finally reach the last runner and trigger the last dash to total energy decarbonisation.

The accumulated competence Singapore has built in being a world leader in refining, offshore platforms, and shipping places it in a prime spot to advise and nudge the oil & gas industry into a greener future. Squandering that spot to make a statement by flatly cutting these industries off, however well-intentioned that may be, puts not only Singapore but indeed the industry and the world on the backfoot when it comes to accelerating oil & gas decarbonisation. It prevents the baton being passed on effectively and weakens net zero efforts, as we have seen with the return of several countries to coal-fired power generation.

In the delicate interplay between national interest and international sustainability, Singaporean energy decarbonisation must always remember that harmony and counterpoint work together. And that the energy security needs of our growing and leading city state must take precedence.

Energy is perpetually material, even if we sometimes forget this as it courses through our daily lives intangibly. It must be captured or extracted, traded, stored, shipped, converted into molecules or electrons, and only then finally transmitted to our homes or vehicles. And in an unstable world rife with competition over limited, material energy resources, pragmatism will light our way to a decarbonised, net zero future.

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Tan Wooi Leong
Email: [email protected]

Tan Wooi Leong is Managing Director of Surbana Jurong Energy & Industrial & Functional ASEAN Head for Power & Energy.