The new 4C’s pushing the renewable energy market: Covid, climate, commodities, conflict

THE challenges the world has witnessed over the last 2 years has, interestingly, been a positive push for the renewable energy market.

The Covid-19 pandemic, climate change, commodities inflation, as well as the conflict in Ukraine — dubbed by a group of panellists as the 4C’s of the present age — have in fact accelerated the growth of this emerging sector.

The use of the term is a play on a well-known Singaporean phrase known as the 5C’s, which stands for cash, car, credit card, condominium, and country club membership, and is often used to poke fun at Singaporeans’ aspirations for material possessions.

Speaking at a panel on renewable energy on Tuesday (Jun 7), Russell Tham, who is head of Temasek’s strategic development, said that the energy problems several countries face right now is a “minor speed bump”. The acceleration in the growth of renewable energy should resume if countries redesign their energy strategy after getting through this current crisis.

“I don’t think Covid held us back, almost kind of accelerated momentum. You can make a case that fiscal and monetary conditions were even more conducive, thanks to quantitative easing and the rates, so that you can see huge amount of capital deployed,” said Tham, who was speaking at the first day of a 3-day sustainability conference called Ecosperity, organised by state investment company Temasek.

With power costs pushing through the roof in Europe, that has led to a change in mindset on energy prices, and led to a boom in demand for solar energy and energy storage, said Alfred Wang, who is also one of the panellists and the co-founder and chief executive of Alpha-ESS, a start-up focusing on energy storage solutions.

The global energy crunch would also be an accelerator for the use of hydrogen as an alternate source of energy, said Alicia Eastman, the co-founder of green hydrogen developer InterContinental Energy, who was a panellist on another discussion about the potential of hydrogen.

“It just reminds people of the uncertainty of such a crucial element for most industries or households. So I think that with renewables and low-carbon or clean options that are dispatchable and can be stored easily, like hydrogen and ammonia, I think that that offers a lot more opportunity for people and countries,” she added.

Despite the market for renewable energy sources growing, panellists said that there are still hurdles to cross.

“The limitation is not market demand right now. It is the installation capacity and delivery of (renewable energy solutions),” said Wang.

For one, most government’s electrical grid are not friendly for renewable energy.

What is required is for grids to not only be friendly to renewable energy sources, but to also be connected to an energy storage system, said Wang.

Unlike traditional energy sources derived from the burning of fuel which can be modulated based on the demand for electricity, the generation of solar and wind energy fluctuates. A mismatch between demand and supply of electricity can cause tremendous stress on a grid, not designed for intermittent supply.

Tham pointed out that grids have been designed to be unidirectional, where the electrical load is coming from a stable source.

While there is recognition that the grid needs to be redesigned and there is a lot of work going into that, the challenge arises from the fact that grids are highly regulated.

“They are a utility-type business model, and yet we are expecting the grid to go through a massive transformation. So creating the environment to allow innovation on the grid without disrupting the grid is a very critical policy position that most governments would need to pay a lot of attention to,” said Tham.

While both Tham and Wang agreed that there is ample financing for renewable energy solutions, Wang said that banks are still not familiar with battery technologies and will raise questions about its durability, which are similar questions raised 15 years ago about solar panels.