%20(3).png)
Summary
Singapore ranks 27th on the world’s top contributors to carbon emissions per capita despite being merely 114th in population size, due to its massive reliance on fossil fuels (over 95%) for its consumption of 51.7 terawatt-hours of electricity per year.
75.2% of Singapore’s total energy consumption comes from commercial activity, which includes energy hogs like manufacturing, retail, and infocommunication technologies.
The government’s masterplan, Singapore Green Plan 2030, includes key goals such as quadrupling the use of renewable energy by 2025 to reduce carbon intensity.
The value of the renewable energy market has already been growing steadily at a compound annual growth rate (CAGR) of 2% from 2015 to 2019. Solar has grown the fastest by far, having multiplied energy production by 100 times from 2010 to 2020.
However, solar power still only represents less than 1% of the country’s total energy production; the government’s current goal is to raise this to 3% by 2030.
Key players in the space with the highest total capacity for solar projects includes Sunseap, SembCorp, and Keppel; many smaller players also provide turnkey solutions for homes and businesses.
The Monetary Authority of Singapore (MAS) has a budget of US $1.8 billion set aside for green investments, showing Singapore is going all in on its steady transition to decarbonization and sustainability.
A carbon credit trading platform, Climate Impact X (CIX) will be launched within 2021 in Singapore funded by SGX, Temasek, DBS and Standard Chartered, for capturing the demand of carbon offsetting in Southeast Asia.
Many of these initiatives and policies come off the coattails of Singapore’s carbon tax, set at $5 per ton of greenhouse gases, lighting the fire for investors and businesses to invest in going green.
Singapore is all in on its commitment to renewable energy and sustainability, and can be considered a trend-setter for other countries in Southeast Asia.
The Red Dot Marks the Spot
Singapore is a island nation in Southeast Asia known for many things, including its eclectic food, busy work culture, and highly modernized society, but one very notable trait of the country is just how physically small its land mass is. Its infamous nickname, the “Red Dot”, is a play at the country being so compact, it is usually marked with a tiny red spot on most world maps.
But for such a diminutive country, Singapore has a massive appetite for electricity. In 2019, the country gobbled through 51.7 terawatt-hours of electricity in total – that is comparable to countries like Portugal, which has almost double Singapore’s population.
Of course, all this energy consumption comes at a price – carbon emissions. Singapore contributes to 0.1% of global emissions, making it one of the top contributors in the world and ranking 27 out of 142 when emissions are broken down per capita.
So what exactly is driving Singapore’s crazed appetite for energy, and what is the country doing to make it more sustainable? Let us take a look.
A Modern, Power-Hungry Nation
According to a report from the Energy Market Authority of Singapore, the country’s energy consumption is largely driven by industrial sectors, which contribute to 41.5% of the country’s energy demand. The commerce and service sectors come next at 33.7%, followed by households at 14.9%. To yet again use a comparison, Singapore’s industrial sector alone consumes more energy than entire countries including North Korea, Cuba, and Lebanon. That’s a lot!
This consumption is clearly driven by commercial activity, and some of the biggest culprits include infocommunication networks and data infrastructure, retail, manufacturing, and the professional scientific sector. Digitalization is also expected to continue to drive Singapore’s energy consumption upwards, as the city pushes forward its Smart Nation initiative which it first announced in 2014 which will use technologies like big data, Internet-of-things, and cloud services – all of which are huge energy hogs. For perspective, Singapore’s data centers alone consume as much as 7% of the entire country’s total energy usage.
What Can Save Singapore’s Sustainability?
The key to Singapore’s future in decreasing carbon emissions lies in its use of renewable energy technologies. Currently, 95% of the country’s power runs on fossil fuels (natural gas), with other fossil fuels rounding out the mix.
Despite this, the outlook for Singapore’s renewable energy market is starting to look rather bright. The market has already been growing steadily with a compound annual growth rate of 2% from 2015 to 2019, and the Singapore Green Plan 2030 outlines that the country will quadruple its renewable energy usage by 2025. There is reason to believe this goal can be achieved, with solar power alone having seen its production multiply by 100 times in only 10 years, and the government plans to have 3% of its total energy usage powered using solar by 2030.
Solar’s Sunny Island Paradise
With the country clearly jumping head-first into renewable energy adoption over the coming years, this begs the question: what types of renewable energy would Singapore use? Unsurprisingly, given the sunny, tropical nature of the Red Dot, the answer lies in solar energy.
A report from Singapore’s National Environment Agency noted that the country’s yearly solar irradiation sits at 1,580 kilowatt-hour per square metre, which is a measure of how much power one square metre of solar panels can generate in a year. This is highly comparable to Japan, which currently sits as the world’s third biggest producer of solar power, with the land of the rising sun having an estimated yearly solar irradiation of 1,570 to 1,752 kilowatt-hour per square metre.
This is particularly important since many other sources of renewable energy are incredibly poor choices for Singapore. For example, the island lacks the fast-flowing rivers which can power hydroelectric dams in countries like China and Cambodia, and Singapore’s lack of land mass immediately disqualifies it from considering technologies like sustainably-grown biomass or wind turbines.
The Heat in Singapore’s Solar Industry
Competition is heating up in Singapore’s solar energy market, given the combination of a high market value yet clear opportunity for more growth.
The current leader in the Singapore solar race is Sunseap Group, with over 400 megawatts-peak in solar projects deployed so far. Close behind is SembCorp Cogen, which has over 360 megawatts-peak in solar projects. The rest of the industry consists of smaller players vying for projects among both the residential and commercial sectors, including the likes of Eigen Energy, CleanTech Energy, and more.
Pay-as-you-go energy packages (also called PPA: power purchase agreements) are also starting to pop up among energy providers in Singapore, with some packages, like those offered by Sunseap Energy, having part of the electricity provided coming from solar power. Currently, the market share of electricity in Singapore is highly concentrated on companies that entirely use fossil fuels, but Sunseap Energy has a small but surprising stake of 0.4% of the market right now, making it the largest player in Singapore’s energy market that is primarily focused on solar technologies.
Market Share by Electricity Sales
1. SP Services Ltd, 20.4%
2. Tuas Power Supply Ltd, 15.1%
6. SembCorp Power Ltd,12.8%
12. Sunseap Energy Ltd, 0.4%
Source: Energy Market Authority
Read also
Singapore’s Sustainability Plan in Action
The stage has been set, and we have identified three key stages Singapore will embark on to continue developing its adoption of renewable energy and decarbonization efforts.
Stage 1: Research. Singapore has a pool of highly-educated talent in science, engineering, and technology, thanks to its local universities. Most recently, the National University of Singapore and Nanyang Technological University announced a $23 million program to research cooling systems for data centers to increase energy efficiency and reduce their carbon footprint. This is particularly important since cooling systems for data centers in tropical climates like Singapore make up as much as 40% of each data center’s energy usage. Singapore’s leveraging of its in-house talent in the STEM fields will give it the competitive advantage it needs to drive decarbonization goals and adopt a more energy-efficient Singapore, powered by innovative renewable energy technologies.
Stage 2: Invest in green financing. Singapore is already a financial hub in the Asia-Pacific region, but with recent reports of trillions of dollars pouring into green financing, Singapore is starting to get in on the action too. The Monetary Authority of Singapore has set aside US $1.8 billion for green investments for what it calls a “climate-resilient portfolio”, focusing on investing in businesses and innovators that prioritize sustainability and decarbonization in order to mitigate the risk of negative environmental impact.
Stage 3: Scale. Singapore is one of the most affluent nations in Southeast Asia, and this buying power is what has allowed its government, businesses, and citizens to adopt solar energy with such a high growth rate. Though there is definitely a long way to go, there are already talks about scaling solar energy production to over 2 gigawatts-peak by 2030 (enough to power 350,000 Singaporean households), in order to reach decarbonization targets for the Singapore Green Plan 2030. Some steps to reach that goal have included innovations including a recently completed floating solar farm by Sunseap Group, which is one of the largest in the world and boasts the ability to offset 4,000 tons of carbon dioxide per year.
Singapore is also leveraging its strong commercial sector, status as a financial hub, and government-industry relationships to build new solutions that can tackle climate problems in a big way. The most recent example of this can be seen in Climate Impact X, a carbon exchange platform spearheaded by the Monetary Authority of Singapore and funded by DBS Bank, Temasek, Standard Chartered and the Singapore Exchange (SGX). This platform will allow businesses and investors to buy and sell carbon that businesses will be able to “spend”, with unused carbon credits being able to be sold for profit.
This is a novel form of investment that is only starting to gain traction in Asia, and comes off the coattails of the carbon tax of $5 per ton of greenhouse gases introduced by the Singapore government in 2019 to make corporations pay for additional greenhouse gas emissions that result from their business activities. This therefore incentivizes more careful monitoring and allocation of carbon emissions, and also pushes businesses to go carbon neutral through the adoption of carbon credits, renewable energy, or more energy-efficient equipment.
Conclusion: All in on Renewables and Sustainability
Singapore is a huge contributor to rising carbon levels in the world, especially given its relatively small physical land mass and total population. As it continues to scale up its digital initiatives to become a Smart City, networking and data infrastructure will also balloon and guzzle large amounts of energy, making it crucial for the country to take steps to meet its sustainability commitments.
Fortunately, through the use of its economic, social, and technological policies, Singapore has started to put its money where its mouth is, going all in on its sustainability targets in a manner that makes economic, social, and environmental sense. Our hope is for Singapore to grow in its ambition and commitments to building a clean economy, and we foresee the country being a hub for green financing, innovator in renewable energy adoption, and role model for governmental policy for the rest of Southeast Asia to follow in our global journey to build a better world.
About REANGLE
Our mission is to bridge the gap between deserving talent and opportunities, particularly for digital and green businesses in the Asia-Pacific region. Contact REANGLE for digital talent development, business development and transformation, or consulting for green companies at info@reangle.co.
Comments