Making inroads into a low-carbon economy
Regional cooperation and enhanced connective infrastructure will be key to the energy transition and unlocking the potential of renewable energy sources from various countries.
SINGAPORE is making headway on its “netzero emissions by 2050” target through multiple pathways.
Besides utilising imported natural gas, the cleanest fossil fuel, for 95 per cent of its power generation, and aggressively growing domestic solar photovoltaic (PV) deployment to actively decarbonise its power sector, the Energy Market Authority (EMA) of Singapore is also focused on two other pathways towards decarbonisation: low-carbon hydrogen and low-carbon electricity imports.
The country is planning for low-carbon hydrogen and its derivatives to meet up to 50 per cent of the nation’s projected electricity demand by 2050. Low-carbon hydrogen has been widely embraced by some 40 countries as a key decarbonisation strategy. Besides the power sector, hydrogen is especially important for hard-toabate sectors, such as steel, energy, chemicals, aviation and shipping.
Governments around the world that have announced their hydrogen strategy are focused on catalysing their low-carbon hydrogen economy through technology advancements, creating industrial clusters and supply chains for domestic and exports markets, and providing incentives, with the US Inflation Reduction Act being the largest hydrogen subsidy package.
However, more can be done by policymakers, especially in Asia, to improve the economic feasibility and bank-ability of commercial-scale low-carbon hydrogen projects. This can be in the form of industrial policies and regulations to mandate certain hydrogen quotas and support mechanisms to overcome cost barriers, regulatory uncertainties and spur offtake commitments; another could be funding for part of the upfront capital-intensive hydrogen common infrastructure.
To this end, soon after Singapore announced its National Hydrogen Strategy in October 2022, EMA issued a joint call, with the Maritime Port Authority (MPA), for ammonia power generation and bunkering solutions in December 2022. This has attracted strong interest; at the Singapore International Energy Week 2023 in end-october, it was announced that a shortlist of six consortiums had advanced to the next stage.
The private sector has also moved in tandem with the government’s efforts to tap low-carbon hydrogen as a viable alternative. Singapore took a significant stride in decarbonising the power sector earlier in July this year, with the ground-breaking of its first hydrogen-ready co-generation plant, the Keppel Sakra Cogen facility.
Developed by Keppel, the Keppel Sakra Cogen facility is a 600 MW best-in-class, advanced combined cycle gas turbine (CCGT) power plant. It has been engineered to be able to operate with 30 per cent hydrogen mix by volume and can shift to run entirely on hydrogen. It will also be the most cutting-edge and energy-efficient power plant in Singapore, capable of superior performance, such as higher operation flexibility and lower emission intensity. This will abate 220,000 tonnes of carbon dioxide a year, as compared to Singapore’s average operating efficiency for equivalent power generated. When completed in 2026, it will be operated by Keppel. Such carbon dioxide savings translate to taking about 47,000 internal combustion engine cars off the road a year.
Electricity demand is forecast to grow 3 per cent to 5 per cent over the next five years. This, coupled with ageing CCGTS nearing end of life, it is expected that there will be more new investments in hydrogen power plants in Singapore in the coming years. It is therefore imperative to develop a reliable supply of hydrogen that is scalable and cost-competitive, in order to transition the energy mix for power generation.
To this end, Keppel has commenced numerous feasibility studies on low-carbon hydrogen and hydrogen-derived fuels, such as low-carbon ammonia, with international partners in Australia, North America, and Asia, since 2021.
Crossing borders
In May 2023, Keppel joined the Central Queensland hydrogen (CQ-H2) project consortium to develop a large-scale green hydrogen project in Australia and signed a memorandum of understanding with Incitec Pivot, a global leader in industrial chemicals and fertiliser manufacturing, on developing an industrial-scale green ammonia production facility in Australia.
Envisioned to produce 800 tonnes of renewable hydrogen a day, CQ-H2 is one of Australia’s largest green hydrogen projects and aims to produce renewable hydrogen that can be used domestically and exported overseas to countries such as Singapore and Japan. Renewable hydrogen exported to Singapore could be used to produce green ammonia.
The CQ-H2 project has commenced front-end engineering design and the parties are working with the Queensland government on the essential end-to-end infrastructure and transportation requirements, as well as permits and licences approvals to facilitate production and export.
Ammonia is an energy-efficient carrier of hydrogen that is already being shipped today as an industrial chemical. Besides being easily disassociated, or “cracked”, to produce hydrogen, ammonia can also be combusted directly as a low-emission fuel and lends itself as a promising bunker fuel for the maritime sector. Major shipbuilders are developing ammonia-fuelled gas carriers and container ships as well as liquid hydrogen carriers. MPA is planning trials of new zero- or low-emission fuels bunkering, and has put in place rigorous measures to ensure safety and manage risks.
Meanwhile, EMA is on track to import 4 GW of low-carbon electricity from across borders, or around 30 per cent of Singapore’s
energy supply, by 2035.
As the first renewable energy importer into Singapore, Keppel has imported over 270 GWH of renewable energy, commencing on Jun 23, 2022, via the Lao Pdr-thailand-malaysia-singapore Power Integration Project (LTMS-PIP). Aside from being the first multilateral cross-border electric trade involving four Asean countries, LTMS-PIP serves as a pathfinder towards realising the broader Asean Power Grid vision of multilateral electricity trading among neighbouring countries in the region.
Building on the experience of the LTMSPIP, Keppel submitted a proposal to EMA for the long-term import and sales of 1 GW of low-carbon electricity from Cambodia into Singapore, and was granted conditional approval in March 2023 based on technical and commercial grounds.
Keppel’s large-scale electricity import is expected to be an aggregation of low-carbon electricity generated from various renewable energy sources in Cambodia and Lao PDR, which will provide greater flexibility and energy resilience. The import from Cambodia is expected to commence post-2030, subject to the requisite approvals from the relevant authorities.
More recently, in September 2023, Keppel received conditional approval from EMA for the long-term import and sale of 300 MW of low-carbon electricity from renewable energy sources in Indonesia to Singapore. The electricity is planned to be supplied from more than 2 GW of installed solar PV, and integrated with utility-scale battery energy storage systems for roundthe-clock stable and reliable energy supply.
Keppel is part of a Green Corridor consortium exploring the development of a common large-capacity subsea cable system for the transmission of electricity from the Riau Islands, Indonesia, to Singapore. The plan is for the electricity import from Indonesia to commence by end-2027, with the relevant regulatory approvals.
Regional cooperation and enhanced connective infrastructure will be key to the energy transition and unlocking the potential of the vast and varied sources of renewable energy from various countries. These projects will help to propel the growth of renewables, accelerate technologies to scale up, drive economic development, and enhance energy security for the region. They will also create more job opportunities, better quality of living and clearer pathways to net-zero goals.
The development of cross-border energy trade and markets requires long-term planning taking into account regulatory approvals and commercial agreements, as well as development of infrastructure for power grids, transportation, pipelines and storage, including sources of funding and financing. Singapore has taken concrete steps, with the support of the industry, and is working in tandem with countries around the region to make the vision of transforming the region into a low-carbon energy hub a win-win for all stakeholders and the planet.