Neil McGregor of Sembcorp Industries shares his thoughts on the challenges of climate change and the energy transition, as well as how Sembcorp is meeting customer needs through digitalisation.
1. How can Asia and its governments navigate the energy transition?
Amid rising demand, tightening capacity and a pressing need to combat climate change, the energy transition of the 21st century is unprecedented in its scale and velocity. Energy policy based on pre-transition models are fast becoming obsolete. To prevent countries from stalling in the energy transition, policy-makers have to act now to build a sustainable future by recalibrating and harmonising governing frameworks.
Asia stands to take the lead in this new regulatory frontier, by developing forward-thinking energy policies to tackle these challenges. To achieve this, governments must adopt a strategic long-term view in their respective approaches to manage energy supply and demand in tandem. Supply-side measures include carbon pricing as well as a redesign of markets to support and promote the efficient use of available technology. Demand-side measures can comprise fiscal policy relaxation and affirmative action to support initiatives – including the mainstream introduction of electric vehicles; rapid adoption of energy-saving digital and smart technologies in the urban environment; as well as industrial waste reduction and resource conservation. Policy-makers should also look into convergence across sectors to reduce the likelihood of conflicting or contradicting strategies that may hinder the energy transition.
2. What are your views on how the energy industry can play its part to overcome the challenges and constraints of climate change?
While climate change is a universal problem, the energy sector currently contributes about 35 per cent to global greenhouse gas (GHG) emissions. Therefore, we play a critical role in being part of the answer. Sustainability must become central to everything we do as an industry. This requires companies to set clearly defined sustainability goals, outcomes and measurements, with transparent reporting to foster greater accountability among stakeholders. While guided by carbon pricing and offset mechanisms in making economic decisions, energy providers will need to refocus their business models to be customer-centric solution providers with sustainability at the core of their value proposition.
Ultimately, we have to weigh our business decisions against what is perhaps the most important bottom line – that we each have an obligation to the next generation to actively reduce our impact on the environment.
3. Distributed energy is gaining prominence in the energy revolution. How does this impact Sembcorp?
With the global trend towards decarbonisation, flexible distributed energy generation is growing in importance. The boom in renewables has further necessitated growth in distributed energy solutions, given their role in bridging supply gaps between intermittent renewables generation and conventional centralised thermal sources. In anticipation of this, Sembcorp is building capability in this area.
We are deepening our presence in the UK with Sembcorp Energy UK which is now the largest flexible distributed energy generator in the region, with a portfolio of over 40 generation projects in England and Wales. To complement this network, we are also one of Europe’s largest developers of battery storage. And in Singapore, we aim to further boost innovation in this field, having begun a pilot programme to test the use of energy storage systems in Singapore, in partnership with the Energy Market Authority. Sembcorp is also expanding our renewables fleet. We are one of the largest solar players in Singapore, and when combined with our wind farms in India and China, renewables comprise about a third of our total fleet capacity.
4. As energy companies continue to increase their investment in digital technologies, can you share how Sembcorp is building capabilities in this area?
Digitalisation is fundamentally changing the way we live, work and operate. In the face of disruption, companies must embrace change and innovate to stay ahead.
Sembcorp is actively building our digital capabilities around four themes: establishing a strong and secure information technology foundation; digitising our business; embedding innovation; as well as managing the digital journey and change. To this end, we are developing differentiated solutions to improve plant and business operations. For example, we use machine learning and Artificial Intelligence to operate as well as optimise our thermal and renewable assets in India and China. We also have our Solar Performance Monitoring Centre which remotely tracks real-time output of each rooftop installation across our solar projects in Singapore and Southeast Asia. The platform provides enhanced visibility of our solar projects enabling timely maintenance when needed, keeping them working at optimal levels.
These are just some of the many digital solutions that Sembcorp is developing. And to strengthen the pipeline of novel digital technologies that can be used in the energy sector, Sembcorp partners tertiary institutions, research institutes and governments to incubate cutting-edge advancements. I believe this can help us stay ahead of industry trends while developing integrated, and innovative solutions to better meet the needs of our customers.
5. What are your thoughts on the SIEW 2019 theme ‘Accelerating Energy Transformation’?
The science suggests that we have less than 10 years to curb carbon emissions and keep global temperature rise within 1.5 deg C, before humanity faces an irreversible climate crisis. I believe the theme for SIEW 2019 is especially germane. It speaks of the urgent need for energy players to act now by prioritising green solutions, while there is still a window of opportunity.
Accelerating energy transformation will further require us to find synergy in partnerships with energy stakeholders at a regional and global level. I think it is especially significant that dialogue is happening here. This is because Singapore has the right infrastructure and policies in place to integrate energy solutions that could be scaled elsewhere. The depth of expertise here also allows the incubation of new technologies that could help drive transformation in the sector. For these reasons, Sembcorp is proud to support platforms like SIEW which bring energy issues to the fore. Healthy discourse and a meeting of minds with fellow energy professionals, policymakers and industry players, will be key to generating solutions to create a sustainable future for all.
About Neil McGregor, Group President & CEO, Sembcorp Industries
Neil McGregor is Group President & CEO of Sembcorp Industries. He is a member of the board’s Executive Committee and Technology Advisory Panel. He also sits on the board of Sembcorp Marine, a listed subsidiary of Sembcorp Industries, as a non-executive director.
Mr McGregor brings to Sembcorp a wealth of experience from a career spanning business, operations and investment in the energy as well as infrastructure sectors across Europe, USA, Asia and Oceania. Since joining Sembcorp, Mr McGregor has been instrumental in spearheading the company’s strategy to become an integrated energy and urban player. Under his leadership, Sembcorp also launched a climate change policy which identified substantive targets to reduce emissions intensity and grow renewables capacity for its global energy business.
Mr McGregor previously served as CEO of several companies in India and Singapore, including Singapore LNG Corporation and PowerSeraya Group. Prior to joining Sembcorp, Mr McGregor was the Head of Temasek International’s Energy and Resources Group, Head of Australia and New Zealand, as well as Senior Managing Director of its Enterprise Development Group.
He is a fellow of the Singapore Institute of Directors.
Mr McGregor holds a BEng (Honours) from the University of Auckland and an MBA in International Finance from the University of Otago in New Zealand. He also completed the Advanced Management Programme at INSEAD, France.