Balancing Opportunities and Challenges as Fossil Fuels Fade and New Technologies Emerge
SINGAPORE: The energy transition in Singapore is set to face both considerable challenges and opportunities, as the country pushes forward with its goal of reaching net zero emissions. The key to this journey lies in the power sector, which is responsible for 40 per cent of Singapore’s emissions and will likely see growth in the coming years. This is particularly significant given Singapore’s energy-intensive, export-oriented economy.
The global energy landscape has experienced rapid changes over the past 30 years, and experts predict that the next three decades will be even more disruptive. Just as previous market leaders in sectors such as finance and technology have been displaced by new players, the energy sector is set to undergo radical transformations. This shift presents both a challenge for existing companies and an opportunity for new ones to thrive.
The Energy 2050 Committee has identified several key strategies for Singapore’s energy future. To achieve net zero, the power sector will need to transition away from fossil fuels, with renewable energy imports and hydrogen playing central roles. Singapore’s grid already boasts one of the lowest carbon intensities in Asia, largely due to its use of natural gas. However, moving to net zero will require a full pivot from fossil fuels, especially since the country’s limited geographic size restricts its ability to rely solely on solar and wind power.
Renewable energy imports present a compelling solution. Southeast Asia has abundant renewable resources that could meet the region’s future energy needs. By tapping into these resources, Singapore can ensure a stable energy supply while contributing to regional net zero goals. Furthermore, Singapore’s expertise in financing and technology could foster economic growth through investments in the renewable energy sector, benefiting neighbouring countries as well.
Hydrogen is another promising alternative. Though the global green hydrogen industry is still in its infancy, there is strong momentum towards its development. By 2050, hydrogen could be a crucial part of Singapore’s power generation strategy, provided the necessary infrastructure, regulatory frameworks, and business partnerships are established early.
Beyond power generation, there are vast opportunities for businesses to engage in the energy transition. From local solar projects and grid upgrades to energy efficiency improvements and emerging technologies like geothermal, nuclear, and carbon capture, the potential for growth is immense. The transition to a low-carbon economy is expected to create new business opportunities for startups and established companies alike, particularly those looking to expand regionally or globally.
For Singapore, the road to net zero may be challenging, but it offers exciting prospects for innovation and leadership in the energy sector.
