Major geopolitical events, shortage of energy availability and greater energy market volatility are some of the factors that have contributed to the global energy crisis. As countries pursue their emissions goals, how can the LNG and hydrogen markets tackle issues faced by the energy industry? Jonathan Lee reports.
There has been a change in mood for the energy industry this year, as rising geopolitical conflicts and underinvestment in the energy supply chain have created an energy crisis felt by many.
In her Opening Keynote Address, Minister of State, Ministry of Culture, Community and Youth & Ministry of Trade and Industry, Low Yen Ling, highlighted some of the key challenges in the Liquefied Natural Gas (LNG) and hydrogen gas markets. She also spoke about what the Singapore Government, businesses and individuals can do to help in the current energy crisis.
Challenges faced by the LNG and hydrogen gas markets
As countries accelerate their energy transitions, hydrogen is being touted as the next frontier in achieving net zero goals. However, hydrogen has its challenges and natural gas will remain an important transition fuel.
A key challenge faced by hydrogen is that it is not as dense as traditional fossil fuels. Renewables like wind, solar and hydro that can be used for hydrogen production are intermittent and subject to weather conditions. Lastly, not all countries have access to renewable energy, for instance, Singapore which is land-scarce and has limited resources to tap on.
“Natural gas will continue to play an important role in enabling reliable supply of electricity even while low-carbon fuels are being pursued,” said Ms Low. As natural gas remains as one of the cleanest fossil fuels, she emphasised that it will be the transitional fuel for switching from coal and oil. She added that gas-fired power plants can be more responsive and serve as a reliable backup. Hence, it is important not to neglect natural gas developments.
The transition to hydrogen would require investment risks as hydrogen-compatible power plants and hydrogen network infrastructure are big-ticket items. As hydrogen technology is still nascent, investors face the risk of newer and better technology that will make current ones obsolete. On the flipside, this also reduces investments in natural gas infrastructure as there may be fear of asset stranding or new regulatory measures that would cause such investments to be unviable.
Advancing the green energy transformation
Ms Low also shared some of the actions that the Singapore Government, businesses and individuals can take to advance the transition to green energy. The Singapore Government can assist to guide a country’s energy transition with clear direction and policy, with market conditions and demand outlook to smoothen the process. This will help the industry and businesses be better informed to make timely investment decisions and strengthen supply chains.
Businesses and individuals can be part of reducing current natural gas emissions by taking part in the Global Methane Pledge. This targets to reduce global methane emissions by at least 30% from 2020 levels by 2030.
Consumers also have the purchasing power and choice to go green and create demand. This would send a signal to power generation companies to sell clean energy and push ahead for the transition.
Singapore’s approach to the clean energy transition
Ms Low highlighted that Singapore will be focusing on two approaches: enhancing cooperation with international partners, and increasing the efficiency of power plants.
For the former, Singapore and Japan have signed a Memorandum of Cooperation at SIEW 2022. The agreement will enhance both countries’ cooperation and investment in the natural gas value chain, including the use of LNG as a transition fuel.
In the case of the latter, Ms Low announced the launch of an upcoming consultation. This will engage the industry on emissions standards for new and repowered fossil fuel-fired generation units, targeted for 2023.
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