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Singapore well-positioned to build a sustainable, smart-energy future

Demand- and supply-side factors provide the impetus to push for the development of the smart-energy ecosystem. Add in a government that has a clear idea of what it will take.

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Booths showcasing the clean-energy projects by companies registered with the EcoLabs Centre of Innovation. EcoLabs, a collaboration among Nanyang Technological University, Enterprise Singapore and the Sustainable Energy Association of Singapore, helps small and medium-sized enterprises (SMEs) and start-ups develop and commercialise their clean-energy business ideas.

ENERGY is ubiquitous - the largely unseen force powering individuals, businesses and economies in myriad ways. Digital technologies too, are now deeply embedded in everyday life.

Where the two meet is also where the most exciting possibilities for today's global power sector arise. Singapore - given its push to be a Smart Nation powered by digital innovation - is well placed to realise these possibilities, and shape its own energy future.

Globally, the energy sector is undergoing significant transformation.

Demand, particularly in Asia, continues to surge as economies grow and populations swell. On the supply side, price volatility persists with oil production upheavals, even as renewable energy sources make up a growing slice of the global power pie.

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Meanwhile, stricter emissions requirements, the liberalisation of energy markets and the variability of renewable energy supply present challenges to energy market players and policy-makers. To keep the lights on and gears whirring, operations and business models alike have had to evolve into more complex, flexible forms.

How digital technologies factor into this global transformation is multi-faceted. The impact of the digital economy, data centres, electric vehicles and other developments on net demand remains uncertain. But artificial intelligence (AI) and the Internet of Things (IoT) certainly have the potential to disrupt the ways in which power is generated, distributed and consumed.

Wielded well, these tools could make energy systems more intelligent, efficient, reliable and sustainable. By the International Energy Agency's estimates, digitalisation could save the power sector some US$80 billion (or 5 per cent of global power generation costs) a year by cutting operation and maintenance costs, boosting power plant and network efficiency, and reducing downtime.

WHERE SINGAPORE STANDS

The energy world is like a symphony that needs to be well-orchestrated. What Singapore has going for it is a government with a strong understanding of top-level architecture and design, and the synergies needed for info-sharing and inter-operability. That stands it in good stead to lead the way in digitalising the energy sector.

Like many others globally, Singapore has long faced the age-old energy trilemma - managing trade-offs among energy security, economic competitiveness and environmental sustainability.

Over the years, it has built an energy system with relatively clean and efficient power generation and a grid that is among the world's most reliable (with an average system interruption time of less than a minute a customer a year).

Beyond that, its liberalised electricity market - the first in Asia - serves to drive efficiency, innovation and competitive prices.

Unlike many other countries, however, Singapore relies heavily on imported fuels - 95 per cent of electricity here comes from burning natural gas. This heightens its need to optimise energy use and pursue efficiency. Singapore's energy system is also small and compact, making it especially susceptible to demand and supply fluctuations. This adds to the challenge of balancing electricity needs in real-time. Continually adding capacity to cater for ever-higher, but occasional, peaks would be too costly.

Moving to an intelligent energy system addresses these unique issues. Deploying advanced sensors, predictive data analytics and AI would boost the efficiency of power plants and smooth out demand and supply for a more flexible system.

Digitalisation also addresses challenges arising from worldwide trends.

Demand for renewable energy has soared with falling technology costs, the drive to tackle climate change and Singapore's own need to diversify energy sources.

Solar energy is Singapore's most viable renewable option, but remains weather-dependent. So, digital technologies such as advanced batteries and data analytics are needed to temper that intermittency and keep power supply reliable. Digitalisation is thus key to enabling Singapore to fully exploit its solar potential.

It is also needed in response to increasingly sophisticated business consumers. Apple, for instance, has already met its goal of powering all operations worldwide on clean energy. Other global corporations will follow suit, and a global business hub like Singapore should stand ready to respond.

Then, there is the inexorable march globally towards greater electric vehicles (EV) usage. Singapore's government has committed to a 100 per cent cleaner energy public bus fleet of electric or hybrid vehicles by 2040.

The foundation for a national EV charging network is being laid, and 2,000 charging points are being installed island-wide under the electric car-sharing programme BlueSG, a fifth of which will be for public use.

More EVs would accentuate peaks and troughs in demand - imagine the added morning peak-hour load on Singapore's grid, should a multitude of EVs across office carparks plug in simultaneously. But think also of the scope for digital technologies to shine.

SINGAPORE'S SMART-ENERGY FUTURE

Smart charging technologies, coupled with battery storage in buildings and vehicles, could shift charging to periods when electricity demand is low and supply abundant; vehicle-to-grid systems could allow stored energy in vehicles to be sold to building owners.

Indeed, the Energy Market Authority has begun to partner companies in the adoption of energy storage systems. Once nascent initiatives like these take off, the daily rhythms of life for individuals, households and companies could change dramatically.

Homes could use smart-meter technology and thermostats to decide when best to run the dryer or charge an EV, or whether to use energy from battery or grid.

Building owners could use light, temperature and crowd sensors, or granular weather forecasting, which predicts conditions in a building's immediate vicinity, to tweak air-conditioning usage - balancing comfort with electricity savings. They could even participate directly in energy trading, if intelligent energy systems can be linked to blockchain or peer-to-peer trading systems.

Or, a manufacturer's machines might pull data on anticipated workloads, predicted yield from rooftop solar panels, stored energy in batteries and the EVs charging in its building - and use AI to automate decisions on whether to purchase energy at a certain price.

Singapore has every incentive to persist in open dialogue with leading digital technology companies, and encourage the best to tap the Energy Market Authority's existing regulatory sandbox to trial cutting-edge innovations. As with all innovation, setbacks are inevitable and transformation takes time, so ongoing efforts to build collaboration platforms for government agencies, energy-market participants and digital technology companies will require perseverance.

If size is a limitation for Singapore when it comes to harnessing renewable energy, it is equally an advantage in its march towards a smart energy future. With nimbleness and a willingness to be a test-bed for digital technologies, Singapore could be a "living lab" attracting game-changing energy solutions.

Not only could these ultimately transform this city's landscape, they could even position Singapore as a leader in green urban solutions as the world speeds towards a smarter energy future.

  • Toh Seong Wah is the CEO of Energy Market Company, which operates Singapore's wholesale electricity market. Zhang Lei is the founder and CEO of Envision Group, an energy technology company.