[SINGAPORE] Singapore could become a model for energy transition in the region, if constraints around renewable energy spur the city-state to innovate in terms of deploying capital and business models, panellists at a sustainability dialogue said.
“This is a very demanding place to do this because there’s not a lot of… space to go ahead and do large-scale renewables,” said Nat Bullard, co-founder and chief strategy officer of Halcyon, an artificial intelligence-assisted platform for climate-related information.
“You have to have your innovations come in, in other ways, to think about how you’re going to decarbonise,” he added. “Using that constraint as an advantage and as a model is, to me, something I hope to see more of.”
Bullard was speaking at the second edition of the Sustainability Impact Dialogue jointly organised by The Business Times and UOB, under the theme of “Navigating Sustainability Forward: Unlocking Opportunities in Green Energy Transition”.
He was responding to a question from the moderator, Melissa Moi, head of sustainable business at UOB, on how Singapore is positioned in the demand-and-supply shifts undergirding the energy transition.
Compared with the US, where plans are reshaped with administration changes and new schemes become overly politicised, Singapore has a huge advantage – from a policy perspective – in how climate-related issues are “quite apolitical”, said Bullard.
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Another edge Singapore has is the ability to make decisions on capital allocation over a longer time period, as well as long-term planning.
“Being able to see multi-decade master plans for energy and infrastructure in Singapore is a very helpful way to allow people to think ahead,” he added.
Fellow panellist Yoon Young Kim, cluster president for Singapore and Brunei at Schneider Electric, echoed these views.
He noted that the government has created a suite of incentives around sustainability, and this has helped to attract companies with the relevant expertise to conduct research and development in the city-state.
“We are able to export all this technology and financial resources, as well as knowledge expertise, to neighbouring countries, and I think the association with the neighbouring countries as well helps us to make this relationship stronger,” he said.
He added that this a good trade, as countries in the region have more abundant resources, while Singapore has a higher concentration of expertise.
“The important element of this relationship is collaboration. I cannot imagine that, in any part of the world, in this energy transition, you can go alone.”
Rise of China
At the same time, Bullard pointed out that if there is a country that can do all of this on its own, it is China. This is in terms of its capital market allocation, government policy and industrial capability.
“I would argue that China is moving rapidly through the… story arc of automobility that Japan went through in the 60s, 70s and 80s, and perhaps even more so,” said Bullard. “China has a bigger market position in automobiles as an export share of the global market than Japan ever did, and it’s only going up.”
He added that while the US has had the “urge to strike new trade deals with everyone that are essentially meant to sideline China in some way”, he “would argue that they’ve just created so much consistent uncertainty that the one thing that is certain is that the Chinese capability is there”.
That is “probably (more) robust and consistent than anything”, he said.
Asked where Singapore is in the energy transition, Yoon said there is a need to think about striking a balance and thinking about ways to be more energy-efficient, even as energy demand doubles in the next 15 to 20 years.
“One side of the energy transition is about the source of energy and how we can be using more renewable energy. But on the other hand, it’s about how you consume less and that means energy efficiency because… if you are using more and constantly more, you have to produce more.”
Managing the energy transition
To be sure, this is not unique to Singapore. Global energy demand has yet to peak and the emissions trajectory has not improved, Bullard noted, with the world consuming more fossil fuels than ever.
“We have a major change in the politics and the political economy of thinking about a lot of what’s happening in the energy transition, and the challenge is that we have to maintain both of these things as true at once,” he said.
“We’re out of the kind of 2021, 2022 way of thinking that was ‘more of this means less of that’, or that we’re going to reach a point where there will be a great rotation towards things that are entirely clean, and it will come at the expense of things that are on the more carbon-intensive side of the energy ledger,” he added.
“The reality is that both of these things are happening at once.”
The ratio of deployed capital on zero-carbon assets to carbon-intensive ones is 2:1, he noted.
“We have to be very clear about the actual status of things independent of what narrative you want, but also think very clearly about what happens if we continue current decarbonisation trends further – and what happens if companies, governments and financial institutions make decisions more in favour of one side than the other,” he said.
Bullard also noted that some economies, including the US and Australia, have had the ability to somewhat decouple their economic activity from their growth in fossil fuel consumption and emissions.
South-east Asia, however, has been bucking this trend in the last two decades, with one output of economic growth depending on one input of energy.
This, Bullard said, is a real challenge “because there’s a lot of economic growth left to be done here”, including further industrialisation and motorisation.
“It is, though, if you look at all of the other economies that have made these transitions, an opportunity to do that as well.”
During the question-and-answer segment, an audience member asked the panellists what they thought of the 2050 net-zero goals laid out in the Paris Agreement, and whether the world is reaching them.
Yoon said this question has been posed often to Singapore’s Minister for Sustainability and the Environment Grace Fu, who has stressed that this is a journey one cannot do in one go, or on and off.
“And of course, if you try to do it later, it might be even more costly,” Yoon said.
Noting that Schneider has been recognised as one of the world’s most sustainable companies, he said: “It’s not that we started a few years ago – actually it was two decades.” He added: “The important thing is to see your timeline progress every year, and of course, monitor that. The thing is, every step counts.”
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