Bankers need grit to navigate the shifting energy landscape: DBS’ Kelvin Wong

HAVING grit and being curious about emerging trends in the world can help banks navigate the ever-changing energy landscape, said Kelvin Wong, DBS’ managing director and head of energy, renewables and infrastructure.

Over the years, he has witnessed the evolution of the energy and infrastructure sectors.

Some decades ago, oil prices were below US$20 a barrel and solar panels were almost 40 times more expensive than today. But now, solar energy is cost-competitive, and using green molecules as an alternative energy source are conversations industry players bring to the table.

“I think without grit, it’s very hard to keep track and constantly keep abreast of what’s happening every day around the world,” said Wong.

“Without a growth mindset, it is really hard to absorb all these changes and want to learn more,” he added. “Change is really the only constant – in banking, as well as in energy.”

Here are some excerpts from his conversation with The Business Times:

How did you end up here?

I entered the energy sector by accident. Bucking the trend of starting a career in investment banking, I applied to the Energy Market Authority when it was established in April 2001.

Back then, Singapore was trying to deregulate the energy market, and I was part of the team that set rules, including import restrictions of electricity.

What really captivated me was the many facets and the fast-changing pace of the energy sector.

After the market deregulated in 2003, I moved on to be an energy consultant, focusing on business and corporate finance advisory within the energy space.

But that was still not enough for me. I wanted to be a capital provider, so in 2006, I joined the banking industry, and have been with DBS since 2016.

What are the key trends you see within your area?

No one talks about renewables the way they used to years ago. Industry players are increasingly concerned about storage and grid capacities.

There’s a need for countries, particularly in Asia, to look at the transmission grid. This is because renewable sources, such as wind and solar, will not always provide a consistent energy output.

Augmenting the grid and pairing it with long-duration storage solutions have become essential as renewables grow in the energy mix.

Renewable energy depends on natural conditions such as sunlight and wind, which can vary greatly, creating “intermittency” – times when renewables can’t meet demand or produce excess energy.

Grid augmentation ensures that power generated during high-demand times or in surplus can be directed where needed or stored for later use.

Traditional grids, however, were built around centralised, consistent power sources and often struggle with renewable fluctuations.

Upgrading grids to be “smarter” and more adaptive allows quicker response to supply changes. Long-duration storage solutions, such as advanced batteries, absorb surplus energy to release when renewable output dips, at night, for instance.

How does this affect your role? 

Our opinions on the industry and how it’s changing will affect our views on where we want to put money, in terms of lending, how we advise our clients, and ultimately, what our risk appetite is.

For example, as a bank, should you finance early-stage projects and take on risks?

The only way to make those informed decisions is by being in close contact with various industry players, and being involved in international organisations or partnerships, such as the International Energy Agency, to know what’s happening outside of Asia.

The team also keeps tabs on what is happening, not just in Asia, but also in Europe, the US, Australia and the Middle East. We believe many trends happening in those markets will come to our shores really soon.

For example, in Western Europe, there are many projects about carbon capture, usage and storage, as well as green hydrogen and green ammonia. We tend to see revenue or risk models evolve from these markets before they get transposed to Asia.