Monday, July 11, 2016

How will Singapore power the future? Experts discuss energy options

Jul 10, 2016

Experts at roundtable discussion chaired by The Sunday Times clue us in on our energy options
Warren Fernandez
Editor


Flick a switch, and the lights come on.

Turn a tap, and the water flows, pumped to the top of the tallest skyscraper.

Tap a remote, and the smart TV springs to life.

These are everyday realities, often taken for granted in Singapore.

They are made possible by readily available, generally reliable, and relatively affordable energy sources that power a modern economy.

The advent of new technologies, from robotics to 3D printing to electric vehicles, will increase the demand for energy, not just in Singapore but the world over.

As societies move up the development curve, more people will choose to buy computers, mobile phones and cars. Those trends, plus the projected growth in the world population to 10 billion, will see energy demand double by mid-century.

Amid all this is the urgent imperative to check greenhouse gas emissions which give rise to global warming, as nations agreed to do at the Paris climate summit in December.

The world, in short, will need a lot more energy, but with a lot less carbon dioxide (CO2) produced in the process.

Fail to achieve this, and the world faces serious economic and environmental problems in the years ahead. 

More energy with less CO2
Which is why any discussion about the Future Economy, in Singapore or elsewhere, rightly begins with exploring future sources of energy - just where the energy to power tomorrow's growth will come from, at what cost, and with what impact to the environment. So, the first ST Future Economy Roundtable held last month took up this issue.

Shell Singapore's country chairman Goh Swee Chen, who was one of the Roundtable panellists, sums up the challenge this way: "We're a very carbon-based economy and we need to recognise that as we continue to prosper, we will need more energy. And so, we are in an energy transition, one that gets us from the high CO2 emitters all the way to a lower CO2 emission solution.

"In order for us to get to a scenario where we can have better living in a healthier planet, governments, private companies and society all need to work together to allow us to have an environment where we can prosper and at the same time live in a world of lower CO2 emissions."

While recent headlines have been dominated by plunging oil prices, the past few years have seen high energy prices, she notes.

The result: a boon time for investments in alternative energy sources, from solar to shale gas. New technologies and economies of scale brought prices of these energy sources down dramatically, she adds.

In the United States, the discovery of huge reserves of shale gas and advances in techniques to extract it helped the US become an exporter of gas - with economic and geopolitical implications - which few imagined possible just a decade ago.

It was also this wider use of shale gas for power generation that enabled the US to achieve significant reductions in its CO2 emissions in recent years, as promised by President Barack Obama, more so than his push to promote renewable energy sources such as wind or solar. So, technological change in the energy sector can have major disruptive effects which are felt way beyond the industry itself.

In Singapore, for example, solar power has seen a major ramp-up in recent years, with efficiency rising and costs falling to the point where the cost of harnessing energy from the sun is now in line with that of more conventional sources.

The Energy Market Authority's director of industry development, Dr Alvin Yeo, points out that since 2010, Singapore has seen a 19-fold jump in solar-powered energy, helped by several government initiatives to give it a push.

"That's very encouraging and the question now is how the Government can work with business, as well as push some technologies, to make sure that we have more of these renewables in the energy mix in the future," he says.

One major player in the field, Mr Frank Phuan, co-founder and director of home-grown solar energy firm Sunseap Group, notes that more local and foreign firms are now seeking out his company for clean-energy solutions that are less pollutive. They do so not just to shave their energy bills, but also to check their carbon emissions.

Solar power, he adds, also allows them to hedge on energy spending, since low prices can be locked in for longer periods, unlike other sources which are more dependent on fluctuations in oil and gas prices.

The pressure on governments to deliver on pledges made to curb CO2 emissions, as well as companies recognising that they had best prepare for the eventuality that some form of price for emitting CO2 will be adopted, is driving this development, notes Ms Jessica Cheam, editor of Eco-Business, a website on green issues.

Carbon pricing aims to set a cost to polluters and create schemes to pay that cost - for instance, through "cap and trade" systems where they buy and sell carbon credits.

But while recognising that the government has been proactive in driving solar power adoption, Ms Cheam laments the lack of a similar push to promote electric vehicles.

Agreeing, Professor Subodh Mhaisalkar, executive director of the Nanyang Technological University's Energy Research Institute, points to recent advances in storage capacity of batteries, which not only give solar power a boost, but also make electric vehicles more viable.

Boosting energy efficiency - improving the way energy is used in homes, offices and factories - could also see big gains being made, he adds.

Leading the way in developing such clean energy solutions could be a new competitive advantage for Singapore, he continues, just as the Republic turned water from strategic disadvantage to economic opportunity.

This is especially significant since 70 per cent of the world's burgeoning population will live in cities by 2050, consuming 75 per cent of the world's energy and accounting for 80 per cent of the CO2 emitted.

"Singapore is an ideal mega-city in the tropics and if we can get a handle on how to reduce our CO2 emissions, the solutions that we develop could be exported to every part of the world," said Prof Mhaisalkar.




Related Story: Future fuel options
Jul 10, 2016


SOLAR

Solar cells harness light and heat from the sun and convert them into energy. Solar power has been touted as the most promising source of renewable energy for Singapore.

However, it accounts for less than 1 per cent of the electricity consumed here, due to high costs and land constraints in installing solar panels. The Government aims to make it 5 per cent by 2020.

Take its SolarNova programme, which aims to increase solar demand across government agencies. Under the scheme, the Housing Board has committed to a target of 220MW, by generating power through solar panels at 5,500 blocks. 

WIND

The movement of wind through special turbines generates electricity. Wind power generation in Singapore faces difficulties of space constraints and low wind speeds.

While commercial wind turbines operate at wind speeds of above 4.5m per second, the average in Singapore is only about 2m per second.

But Nanyang Technological University (NTU) researchers are working on turbine designs that could tap wind energy in Singapore's climate, and be installed along the coastline or on islands such as Pulau Semakau. 

FUEL CELLS

Fuel cells convert the chemical energy of a type of fuel, typically hydrogen, into electricity, generating heat and water in the process.

It is more expensive than oil and gas, due to the high cost of extracting and purifying hydrogen, but its emissions are far cleaner.

JTC Corp's CleanTech One building is powered by a fuel cell plant. NTU researchers are also exploring how the technology can be used to fuel drones. 

ELECTRIC VEHICLES

These run on rechargeable batteries and release no tail-pipe air pollutants.

There are only about 120 electric and plug-in hybrid vehicles here today, but NTU researchers believe they could make up as much as 30 per cent to 50 per cent of Singapore's motor population by 2050. This could cut vehicle pollution by as much as 30 per cent.

Early this month, the authorities appointed BlueSG, a subsidiary of French electric car-sharing operator Bollore Group, to run a fleet of 1,000 cars by 2020 under a national electric car- sharing programme. 

WASTE TO ENERGY

This converts solid waste into energy via combustion, reducing the volume of waste along the way.

Singapore has four waste-to- energy plants - Tuas, Senoko, Tuas South and Keppel Seghers Tuas - as well as the Semakau Landfill. Another is being built by Hyflux and Mitsubishi Heavy Industries in Tuas.

MICROGRIDS 

A microgrid is a self-contained power system of solar panels and batteries. Small-scale and able to sustain itself, it can provide electricity to remote areas.

The Energy Market Authority is piloting a microgrid test-bed at the jetty area of Pulau Ubin. 

SMART CITIES AND ENERGY EFFICIENCY

A smart city is a vision of urban development which uses big data and other advances in technology to improve the quality of life for residents.

In Singapore, the Govern- ment's Smart Nation Programme Office oversees the smart city push. The goal is to be more energy-efficient by reducing the heat generated by the environment, such as by cutting down on congestion or building naturally cooler homes.



Related Story II: Get set for the solar-powered, cheaper-battery revolution

Renewable energy, driver-less cars, and the possibility of a carbon tax. These topics take centre stage at a roundtable discussion about energy in the future economy, moderated by Straits Times Editor Warren Fernández.
THE PANELLISTS
GOH SWEE CHEN, Shell Singapore chairman
ALVIN YEO, Energy Market Authority’s director of industry development
SUBODH MHAISALKAR, executive director of Energy Research Institute@NTU
FRANK PHUAN, Sunseap co-founder and director
JESSICA CHEAM, Eco-Business founder and editor

Jul 10, 2016

Rising energy demand and pressure to reduce CO2 emissions will drive innovation

Q. Let's take up the point on how energy might be a disruptor. We've seen oil prices plunge over the past months and now they are hovering around US$50. We've seen the emergence of shale gas over the past decade, bringing new energy supplies to the market, and serving as a disruptor to the whole energy industry. So the energy sector is facing disruption, with major implications for other sectors, too. What is the impact on Singapore, today and in the future?

GOH SWEE CHEN When we look at the last five to 10 years, when the price of crude was accelerating, going above US$150, that was when the most number of innovations came through in our industry.
At that high price, it did encourage investments. The industry saw investments in renewables treble and in many cases rise more than five to six times. And the investment in these technologies has actually driven down prices of renewables. So the industry has seen that the cost of solar energy has gone down more than 60 per cent. Since 2011, the price of electricity per kilowatt hour from wind has decreased, and it's about as much as from gas. In fact, the cost of energy from solar sources is now lower than from gas.
So, in our view, in order to live in a world where we need to provide more energy but with lower CO2 emissions, we need to think about energy sources as being on a transition pathway. The transition from coal to oil to gas, renewables, and nuclear as well, is something the world needs to grapple with.

SUBODH MHAISALKAR There have been significant new investments in energy innovation. The investment in renewables in 2013 was higher than investments in fossil fuels. So, from that perspective, 2013 was a game-changer.
I'm very optimistic that this will continue, regardless of oil prices, for two reasons. First, renewables are really the simplest answer in terms of electrification of remote areas. The second reason is the realisation that this would be a start for addressing the low CO2 future.

ALVIN YEO Could I take up a point that Swee Chen made... In Singapore today, 95 per cent of our electricity is produced from natural gas. And that is expected to continue over the medium term. But interestingly, we have seen solar jump by 19-fold since 2010 to reach about 70 megawatts peak.
That's very encouraging and the question, again, is how does the Government work with businesses, as well as push some technologies, to make sure that in the future we have more of this renewables-mix?
So, for example, what the Government has done is to streamline the connection process to the grid to seven days. That's a major move. And, we have seen how Frank managed to bring together 800 different sites to power up Apple's operations in Singapore. That's a great example of innovation.

FRANK PHUAN Having been in the solar industry for the last 20 years, I have seen three waves of change. The first wave was that of feed-in tariffs, when government incentives were given to push the investments of renewables like solar, which usually has a high upfront cost.
The second wave has been the grid-parity wave. Grid parity means that we are operating at a point where the cost of producing renewable energy is on a par with your energy tariff. In some cases, renewable energy is even cheaper. For example, in Singapore, when our company offers to sell electricity to potential customers we actually offer discounts (on existing utility charges). So the very fact that we can offer a discount and allow customers to get savings is an economic benefit.
The third wave stems from what happened in Paris during the COP21 (climate change summit), which called for carbon reduction. So everybody, especially a lot of US multinational corporations, are now aligned in terms of carbon reduction. They come to our company, requesting carbon-free energy solutions. Apple, for example, made such a decision. It has been followed by many other US companies. I think local listed companies, because of sustainability reporting, will follow suit. When the third wave comes, it will be so huge that we will see supply falling behind demand for renewables.

Q. So when do you see this third wave coming?

JESSICA CHEAM It's already here.

PHUAN Yes. In the last six months, since the commitment made to COP21, we have seen a lot of companies approaching us for clean energy solutions that they don't mind paying a premium for. This has never happened in Singapore. Most of the time a typical Singaporean company will ask you, "How much savings do I get?" And if there are no savings, that's a no-go.
But nowadays, companies do approach us and say, "I don't mind paying a premium as long as it allows me to reduce carbon, as well as treat it like an energy hedge over a long period of time."

CHEAM I think the growing momentum behind the Paris Agreement, which Frank mentioned, has everyone talking about CO2 price. They know it's coming in some form. It might be as in China, where they have a cap-and-trade system, or it might be like in Europe, where they have a fixed carbon price. But whatever it is, businesses realise that in this business environment, if you do not price in the carbon risk, if you do not price in climate-related risks, your business model might not be feasible. And so that's driving the investments.
Governments are also cognisant of that fact. That they are parties to the UN Paris Agreement also means they now have a responsibility.
In some countries, governments play a stronger role than others. In Singapore, the Government is very persuasive, and that's good, because the Government sets the legislative framework and it also sets the incentives for businesses to adopt these energy solutions.
In this respect, in some areas, the Government is doing better than others. I would say in solar, it has been taking the lead in recent years. But in other areas, like electric vehicles, they have been a little slow.

Q. Why is that?

MHAISALKAR Going for solar is really a no-brainer. But what needs to be realised is that for any solution with renewables, it has to be coupled with energy storage.
What has happened in the past five years with energy storage is you've seen up to 50 per cent reduction in the costs of batteries. So if you look at battery pricing, we are now down to about $350 per kilowatt hour. The forecast is over the next five years, that $350 per kilowatt hour is likely to come down to $200. So that will have a two-fold impact. The first impact is it will be even easier to couple the energy storage with solar, which is already price-competitive.
The second impact it will have will be on electric vehicles. It is forecast that within the next five to 10 years, the electric vehicles will be more or less on a par with internal combustion engine vehicles. So from this perspective, I think we are really in for quite a revolution in terms of what would be possible in terms of CO2 reduction by use of electric vehicles. If you convert practically all of our buses and 60 to 80 per cent of our taxis to electric vehicles, it would reduce our CO2 emissions by up to 30 per cent.

Q. So why do you think electric vehicles are not getting as big a push?

MHAISALKAR Solar has taken off because it's made business sense. With electric vehicles it has not made business sense so far. For several reasons. The first reason is the cost of batteries, which we see coming down tremendously.
The second reason is it still needs six to eight hours to charge an electric car. So that revolution is also coming. Fast charge solutions from a battery perspective are coming.
The third aspect of it is availability of charging stations. And that is also changing. All of these factors are converging to a solution. Last factor, perhaps, one would just argue is the range. On a full charge, a car like a BMWi3 would give you 140km in a place like Singapore. For the most part it's good enough. But the next-generation vehicles would give you 200km to 250km in terms of range.

Q. In a city like Singapore, this would make eminent sense?

MHAISALKAR Absolutely...

PHUAN The availability of the charging points is an issue. Also, from the grid perspective, if everybody owns an electrical car, and everybody goes home and charges their cars at the same time, the consumption curve of Singapore would look very different.

Q. But you could use differential pricing to manage that?

PHUAN Yes, I think we are on the verge, but it will take a little bit of a push from the Government.


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