Singapore Must Devise New Initiatives to Replace Its Natural Gas Overreliance


Singapore Must Devise New Initiatives to Replace Its Natural Gas Overreliance

Singapore is pressing ahead with a national hydrogen strategy to replace its overreliance on natural gas-fired power generation. But that strategy appears to be centred on “low carbon” hydrogen, which is still a carbon emitter, instead of green hydrogen, which produces no GHG emissions.

10 January 2023 – by Tim Daiss   Comments (0)

Singapore is heavily reliant on natural gas and is an anomaly among its neighbours in the region. The Association of Southeast Asian Nations (ASEAN) member state has one of the world’s most developed economies. It has a GDP per capita of nearly USD 107,000 but a population of only 5.9 million. Meanwhile, it has a land mass of just 714 sq km.

In comparison, Indonesia, ASEAN’s largest country and economy, has a landmass of some 1,917 million sq km with a population of around 270 million. It has a GDP per capita of USD 16,353. On average, the 10-member ASEAN group has a GDP per capita of USD 32,472.

However, unlike its other ASEAN members, particularly IndonesiaVietnam and the Philippines, Singapore has no scalable renewable options. These countries offer ripe conditions for both solar and wind power development. However, Singapore simply doesn’t have the land for large solar or wind farms, or fast-flowing rivers for hydroelectric power.

Singapore’s Natural Gas Reliance

As such, Singapore relies heavily on natural gas-fired electricity generation to meet its electricity needs. Currently, natural gas makes up about 95% of Singapore’s energy mix. The power sector accounts for almost 40% of Singapore’s overall carbon emissions, the vast majority of which is generated from natural gas.

The city-state qualifies that usage by pointing out that gas is the “cleanest fossil fuel”. However, given that gas, when used for power generation, emits at least 50% of the carbon emissions as coal, the dirtiest burning fossil fuel, there’s substantial room for improvement. Singapore, as such, has been oversimplifying the role that gas plays in its power sector and the harmful greenhouse gas emissions it creates.

Singapore is starting to take a multi-pronged approach to the problem. In October, it revamped its climate change mitigation goals, raising its target to achieve net-zero emissions by 2050. This represents Singapore’s first commitment to a specific date for its carbon-neutral goals.

Its carbon dioxide emissions targets will peak in 2030 when they reach 60 million tonnes. The figure is a 5 million-tonne reduction from the previous goals it had set.

Singapore’s Net-zero Strategies

Carbon Tax

Earlier in 2022, Singapore announced it would raise its carbon tax from SGD 5 per tonne of CO2 equivalent to SGD 50 to SGD 80 (or USD 35 to 55) by 2030. The government will apply the carbon tax broadly, covering about 80% of its emissions.

National Hydrogen Strategy

Singapore also announced a National Hydrogen Strategy. This will provide a roadmap of how hydrogen can support its decarbonisation efforts. It will also map out the steps needed to prepare it for a hydrogen future.

Deputy Prime Minister and Minister for Finance Lawrence Wong said in October during the Singapore International Energy Week that hydrogen could supply up to half of Singapore’s power needs by 2050alongside domestic renewable energy sources and electricity imports.

He also sees “low-carbon hydrogen” as an “increasingly promising” solution. “While the technology and supply chains are still nascent, momentum has picked up substantially in recent years,” he says.

It should be noted that Wong is not necessarily referring to green hydrogen, developed by using renewable energy (usually solar power and wind) and emitting no carbon emissions.

Low-carbon hydrogen usually refers to producing the fuel with limited emissions. It can include using natural gas, which produces emissions. Even if carbon capture and storage (CCS) technology, a largely unproven technology, is used, there may still be emissions.

It also includes producing hydrogen using biomass and, occasionally, steam. The difference may seem slight, but that difference determines whether the fuel emits harmful GHG emissions.

Wong added that Singaporeans may have access to electricity generated from low-carbon technologies like hydrogen from 2027 without giving more detail.

Singapore Has to Look Beyond Its Borders

Going forward, Singapore needs to become more entrepreneurial when looking outside its borders to develop green hydrogen supply chains. The city-state could examine green hydrogen import strategies with neighbours in the region that are pressing ahead in their own respective green hydrogen development, including Australia.

Admittedly, those green hydrogen import supply chains don’t exist yet, but Singapore could help spearhead and even help finance those endeavours, thus helping itself towards achieving net-zero in 2050. However, relying on natural gas for power generation and then replacing it with low-carbon hydrogen that still emits emissions is not the best way forward.

by Tim Daiss

Tim has been working in energy markets in the Asia-Pacific region for more than ten years. He was trained as an LNG and oil markets analyst and writer then switched to working in sustainable energy, including solar and wind power project financing and due diligence. He’s performed regulatory, geopolitical and market due diligence for energy projects in Vietnam, Thailand and Indonesia. He’s also worked as a consultant/advisor for US, UK and Singapore-based energy consultancies including Wood Mackenzie, Enerdata, S&P Global, KBR, Critical Resource, and others. He is the Chief Marketing Officer (CMO) for US-based lithium-sulfur EV battery start-up Bemp Research Corp.

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