Bernard Esselinckx on the roles that digitalisation and new technology will play in Southeast Asia’s energy transformation.
1. How is Senoko contributing to energy transformation in the region?
As one of Singapore’s oldest and largest power generation companies, providing almost one-fifth of the nation’s electricity, we believe we have a responsibility towards the wider energy industry and the community. Over the years, one of our key focus areas has been introducing technologies and initiatives that drive environmental sustainability in the power sector. We were the first genco in Singapore to use 100 per cent natural gas for power generation back in 1992 and the first to repower our plants in 1996.
We are currently pilot testing an initiative in the area of peer-to-peer (P2P) trading for renewable energy. The goal is to develop a next-generation energy-management mechanism for the smart grid that empowers consumers to trade renewable energy they produce and drives greater adoption of renewables. Having an open and transparent trading platform for renewable energy will also enable price discovery for locally produced renewable energy. On the supply side, we hope the resulting pricing transparency will encourage more investment in renewable infrastructure. In the longer term, the same P2P platform could also be expanded to trade other electricity related commodities or services other than just renewables.
2. What are the opportunities and challenges of integrating renewables into Southeast Asia’s energy mix?
Southeast Asia’s power market is experiencing a boom as rapid economic and demographic growth drives up the demand for electricity. One of the key challenges faced by countries in the region is meeting the growing energy demand in an affordable and timely manner while minimising the environmental impact without compromising on socio-economic goals.
Integration of renewables into the energy mix opens the door to a number of opportunities that address these objectives, beyond driving the region’s transition to a low-carbon future.
Southeast Asian countries are increasingly looking to diversify their energy mix to increase their energy security by enhancing resilience to supply shortages or interruptions, as well as reducing reliance on foreign supply. Some ASEAN countries are well-endowed in renewable energy resources from solar and wind to geothermal and hydropower, these countries have the opportunity to reduce their dependence on fossil fuels and enhance their energy security by integrating renewables into the energy mix. More importantly, for Southeast Asian countries that lack infrastructure for traditional power generation, we can provide energy access to rural and remote locations through microgrids integrating renewables.
However, Southeast Asia still faces a wide range of issues that impede renewable investment for some countries it is financial limitations and conflicting economic objectives; for others it is simply a lack of resources for renewable energy generation. This limits the development of critical infrastructure such as transmission capacity to distribute electricity from the often-faraway location of renewable energy generation to consumption centres.
Countries such as Singapore face their own set of infrastructure challenges brought about by land constraints and acute intermittency of solar photovoltaics (PVs) due to rapidly changing weather conditions. However, even in countries that have a relatively stable supply of solar energy, system operators still might have an inherent fear of renewables affecting grid stability. This could be due to limited understanding of how integrating renewables impacts the energy grid and the various renewable technologies that are available to assist this integration.
Southeast Asian countries will need to further strengthen their regulatory frameworks, infrastructure as well as educational initiatives to address these challenges and scale the growth of renewables at a rate that matches the increase in energy demand. With growing conscientiousness among companies pledging to green their energy supply and governments around the world ramping up their efforts to transition to a low-carbon future, we are moving in the right direction in the clean energy shift.
3. Can you tell us more about how digitalisation and technological advancements are driving greater energy efficiency and enhancing the customer experience?
When we speak of the transformation of the energy industry, technological advancements and digitalisation are at the centre of that dialogue, impacting the entire supply chain from generation to distribution to consumption.
One of the biggest contributions from technological developments over the past decade has been the energy efficiency gains in power generation. For instance, the combined cycle power plants that we use in Senoko Energy produces 50 per cent more electricity for the same amount of fuel than a traditional simple-cycle plant. Investment in emerging technologies will be critical to our transition to a low-carbon future. At Senoko Energy, our efforts have led to a 42 per cent reduction in our carbon emissions since 2000.
Moreover, the evolution of ‘smart’ energy systems has enabled suppliers to respond to fluctuations in demand more efficiently and reduced the need for wasteful excess capacity. On the demand side, the evolution of smart homes with smart metering systems and other intelligent technology has enabled significant energy savings brought about by automatic adjustment of energy supply according to the demand. Companies can also monitor and manage their energy use and carbon footprint data to develop more energy-efficient supply chains.
From a customer experience perspective, digitalisation has changed the dynamics and expectations of the utility provider-customer relationship. In a time where customer-centricity is a key strategy to stay competitive and profitable, digital technologies have enabled utility providers to provide a seamless customer experience and build deeper engagement through digital channels. For instance, at Senoko Energy, we have introduced a mobile application for our customers, which enables them to monitor their energy consumption at half-hour intervals and compare it against national benchmarks and trends. Not only do such tools provide a better customer experience but they empower customers to manage their energy consumption better.
Beyond consumer engagement, a game-changer in customer experience is big data analytics, which can equip us with valuable insights on customer preferences – from price to type of energy consumed to behavioural patterns – which can then be used to shape future offerings. Predictive data analytics have also improved our predictive maintenance capabilities, allowing us to anticipate outages before they happen, in turn ensuring the security and reliability of electricity supply for our customers. It also allows energy providers to be more cost effective, and these cost savings are then passed down to the customers.
4. How do you see the greater electrification of buildings, transport and industry impacting the utilities sector?
The growing trend of electrification of buildings, transport and industry will be a key component of electricity demand for utilities in the future and will put them in a strong load growth position. Electrification presents a huge opportunity for utilities to identify new revenue streams for their business in a low-carbon future. They may also be in a better position to meet customer demands at lower total system costs due to improvements in load factors and better optimisation of resources.
We foresee new business opportunities for the sector, with utilities taking on a greater role in the electricity network infrastructure in the future. For instance, utilities could look at owning or servicing batteries, and investing in the expansion of electric vehicle charging infrastructure. We also expect the electrification trend to drive greater collaboration between the utilities sector and other industries such as battery manufacturers and technology firms to enhance capabilities in new energy services.
Another key trend for utilities to look out for is the impact of technological advancements on the increasing electrification across sectors. For example, emerging technologies such as vehicle-to-grid technology hold the potential to help utilities better manage grid peak fluctuations. Digitalisation is also an enabler for electrification, allowing connected devices to communicate with the grid for smarter energy management. We expect utilities to play an important role in the adoption of these technologies as well as benefit from better management of the power flow.
Having said that, the ongoing transformation comes with its set of challenges for the utilities sector. Utilities will need to make significant investments into distribution capacity and grid strengthening to avoid overloading. They are also likely to face increased competition from non-traditional industry players such as electric car manufacturers. It is imperative that the utilities sector is future-ready to address these challenges and leverage the opportunities presented by electrification.
5. The theme for SIEW 2019 is Accelerating Energy Transformation. What do you look forward to discussing at SIEW this year?
The energy industry is in a state of flux with multiple external influences driving unprecedented evolution of the sector. With growing energy demand, technological advancements, and most importantly, the urgent need to meet climate change commitments, we can expect this transformation to ramp up over the coming years.
SIEW is the ideal platform for us as industry players to collaborate with other industry players, governments, researchers and academics on how we can address these external influences while sustaining the energy industry from a business perspective. I am looking forward to discussing best practices, knowledge and developments in the smart energy space, which I believe is set to be the future of our industry, and how we as industry players can support this evolution for better energy management as well as environmental sustainability.
I am also looking forward to discussing how the public and private sectors can collaborate to develop a green growth ecosystem and grow the green economy - from ensuring energy efficiency across all sectors to exploring alternative energy sources to developing low carbon technologies. At the same time, it is a great opportunity for government and energy leaders to come together and discuss how the market structure needs to evolve to support the increased penetration of renewables while ensuring industry sustainability.
About Bernard Esselinckx, CEO and Group President, Senoko Energy
Bernard joined Senoko in June 2017 as Chief Executive Officer. A Senior Executive with over 20 years of experience at both a strategic and operational level with energy infrastructure, manufacturing (B2B & B2C) and service businesses in Latin America, Europe, Middle East and Asia, Bernard has deep experience in consulting, business development, project management and P&L management. He has a proven track record in assembling and leading multidisciplinary teams that developed, acquired, built and/or improved $7bn+ worth of independent power project (IPP) in both PPA and merchant markets. He is passionate about leading the zero-carbon energy transition and building a more sustainable future.
Senoko Energy is one of the largest vertically integrated energy utilities in Singapore. It has the largest licensed electricity generation capacity (2,807 MW) and retails to almost 16 per cent of the contestable electricity market in Singapore.