25-7-2024 (SINGAPORE) As the global community pivots toward cleaner energy sources to combat climate change and meet ambitious net-zero emissions targets, Singapore finds itself grappling with a critical question – its energy bet on hydrogen. The city-state is pinning much of its hopes on hydrogen production to rein in emissions, but a heated debate rages over the type of hydrogen it should prioritize.
At the heart of this quandary lies Singapore’s heavy reliance on natural gas for its power sector, accounting for a staggering 95% of the fuel required to generate electricity. Renewables, on the other hand, contribute a mere 3% to the nation’s energy mix. While gas was once considered a “clean fuel,” mounting research now paints a different picture, revealing its substantial carbon footprint and associated health risks.
The damages extend beyond direct emissions, as the gas value chain – from extraction to production, transportation, and end-use – is plagued by methane leakage issues. Methane, a potent greenhouse gas with over 25 times the heat-trapping capacity of carbon dioxide, according to the U.S. Environmental Protection Agency, exacerbates the climate crisis.
In a bid to offset its over-reliance on gas, Singapore unveiled its National Hydrogen Strategy in 2022, positioning low-carbon hydrogen usage as a “major decarbonization pathway” to achieve net-zero carbon emissions by 2050. However, the strategy’s ambiguity surrounding the term “clean hydrogen” has sparked criticism from analysts and environmental groups, both domestically and internationally.
The crux of the matter lies in the distinction between green and blue hydrogen. Green hydrogen, produced through renewable energy sources, emits no carbon dioxide, while blue hydrogen, derived from fossil fuels, primarily gas, carries a significant emissions burden. Singapore is exploring carbon capture and storage (CCS) technology to address blue hydrogen production emissions, but this approach is increasingly viewed as a false solution to climate change mitigation.
CCS projects, designed to capture and store carbon dioxide underground for hundreds or thousands of years, face numerous challenges, including energy intensity, unreliable project execution, cost overruns, and the risk of leakage, posing significant environmental threats.
As such, Singapore should prioritize green hydrogen while limiting future blue hydrogen production and imports. However, the path to green hydrogen is paved with challenges, including its prohibitive cost, currently ranging from $3 to $6 per kilogram, according to a report from GEP.com. This figure accounts for the capital cost of electrolyzers, utilization factors, renewable energy procurement costs, and grid connection expenses.
Moreover, Singapore’s limited land mass of 709 square kilometers, low wind speeds, and high urban density restrict its ability to generate sufficient green hydrogen domestically. Alternative energy sources like hydropower, wave energy, and tidal power are also unfeasible due to geographical and infrastructural constraints.
The way forward lies in forging strategic partnerships with neighboring countries to secure clean energy supply deals. In a promising development, Sembcorp Utilities, a subsidiary of Singapore’s Sembcorp, and PetroVietnam Technical Services Corporation agreed last August to explore opportunities for developing offshore wind farms in Vietnam to export power to Singapore.
Additionally, Singapore’s Energy Market Authority granted conditional approvals in September to five companies to import 2 gigawatts of low-carbon electricity from Indonesia, paving the way for potential solar power plant and battery energy storage system projects, with operations potentially commencing as early as 2027.
Importing cleanly produced power from regional neighbors not only aids Singapore in meeting its decarbonization goals but also incentivizes and funds the expansion of renewable energy sectors in exporting countries. This collaborative approach presents a win-win situation for all participants, enabling the region to transition away from its over-reliance on coal and gas-fired power generation towards cleaner energy sources.
