How will the energy sector evolve in a post-pandemic world? Tan Cheng Guan shares his views on the sustainable energy developments that are taking shape, and the pivotal role of energy players in driving new innovations to tackle decarbonisation.
1. Sembcorp has been in the energy and utilities business for 25 years now. What are some of the key milestones in the business and the lessons learnt in the transition to a low-carbon future?
Over the past 25 years, Sembcorp has been privileged to be an integral part of the energy and utilities landscape in Singapore, and the region.
Before the term “sustainability” became a buzzword, we had already achieved several milestones that laid a good foundation for our transition to a low-carbon future. These include the start of our utilities business on Jurong Island (JI) where we provided centralised utilities services to our customers to manage their energy, water and waste needs. We were able to create value through economies of scale such as increasing energy efficiency, treating and recycling wastewater and recovering energy from waste to promote a circular economy on JI, including better land utilisation. We also went on to develop Singapore’s first cogeneration plant fuelled by piped natural gas from Indonesia’s West Natuna.
These early milestones helped to catalyse the transformation of Singapore’s energy landscape as local power plants gradually switched from fuel-oil to the more efficient natural gas. Natural gas is now widely regarded as the transition fuel for a renewables-based future.
Over the years we have made further strides by expanding into the renewables business. We now have a renewable energy portfolio of over 2,600MW across Singapore, India and China. A couple of months ago, our solar business in Singapore began the development of one of the world’s largest floating solar farms at Tengeh Reservoir with PUB, Singapore’s national water agency. In August, we became the first developer in India to complete and commission full wind capacity of 800MW from the first three Solar Energy Corporation of India (SECI) tenders.
Through the years, our guiding principle has been to provide highly efficient solutions that could help our customers better manage their energy, water and waste resources so as to reduce their costs and impact to the environment. As end-users increasingly demand for greener energy and more sustainable solutions, we hope our offerings will help in accelerating their transition to a low-carbon energy future.
2. What can we do to lower the barrier to a low-carbon energy future?
We need solutions that lower the barrier to a low-carbon energy future by meeting the “people-planet-profit” triple bottom line.
There are already several promising developments on the horizon including hydrogen fuel, battery storage, advanced nuclear as well as carbon capture and storage. However, limits in technology, costs or scalability mean these are not yet ready for mass adoption. Beyond these, there remains an urgent need for disruptive energy innovations, especially when it comes to addressing gaps in commercially available solutions for other industries, including heavy industry and transport, to decarbonise.
Such solutions also need to be made cost-effective and accessible for both developed and developing nations. Governments, companies, researchers and investors must work together to build capacity and demand - as was the case for renewables where policy and investment led to improved technology, better efficiency and lower prices for even wider adoption.
3. How different do you think the energy sector will be in a post-pandemic norm compared to the pre-crisis period?
It has become evident that the body of thought and discussion on the importance of sustainable development has grown, and this increasing awareness will serve to accelerate clean-energy adoption.
The energy sector has been experiencing marked changes with the transition towards a low-carbon energy future well before the pandemic. I believe the impact of the crisis should lead us to accelerate this global energy transition as nations focus on energy resilience and sustainable development.
Technology will be the key enabler to drive sustainable development through lowering of costs. When we look back at the Global Financial Crisis during 2007-2008, China and a few countries had allocated a significant portion of their stimulus package to sustainable energy development which resulted in more R&D and investments into this sector. Today we see the benefits in which solar and wind have already reached grid parity.
I hope that with growing demand, collaboration and investment to fast track innovation, we will see technological breakthroughs in battery storage, hydrogen, waste-to-resource among others, enabling more sustainable solutions. If successful, these innovations can also lead to new business opportunities and job creation for added economic benefit.
4. Beyond clean energy production, there has been increasing attention on waste management as another essential pillar in achieving a sustainable, low-carbon energy future. What can we do to solve the waste conundrum?
The journey towards a low-carbon energy future is complex and requires us to take a broader systems view of the carbon life cycle across all value chains, including waste management.
There are myriad ways of waste management from open dumping to recycling to converting waste into energy. What is easy to ignore is that improper waste management often has a knock-on effect, leading to secondary pollution. This is a dirty problem that needs to be solved.
Fortunately, there is a growing cadre of technologies available to enable better, smarter solutions. These range from the use of different types of waste as feedstock to make chemical and fuels, to blockchain technology to track the movement of waste for better accountability, to data analytics to facilitate more efficient waste collection and plant operations.
Technology alone is just one part of the equation. Practical policies are just as essential to create viable commercial frameworks to drive the adoption of such solutions. These could include mandated recycling for certain waste streams, clear laws on packaging material or national guidelines on waste prevention, treatment and disposal.
What is clear is that waste management will continue to need more structured regulatory frameworks, standards, as well as policies to encourage commercial investments into such technologies and infrastructure.
5. With many traditional oil and gas players making headway in renewables and electricity generation, will there be room in the market to accommodate the smaller players or are we likely to see consolidation in this space? What would the evolving role of energy players be?
The global trends of industrialisation, urbanisation and electrification will continue to drive demand for energy players of all sizes. The key to success is not in size, but innovation.
As the demand for green solutions continues to rise, there remains an urgent need for disruptive and cost-effective energy innovations to tackle decarbonisation.
Players will need to develop their own niche – whether it is through technology or the delivery of services – so that together, the industry can cater to a wider range of customers and their needs. This is how we can drive faster adoption of renewables and a faster transition towards a more sustainable energy future.
At Sembcorp, we see ourselves as long-term partners with our customers. As we evolve with them and their needs, we have grown capabilities in providing innovative and integrated solutions, focused on a holistic approach to resource management of energy, water and waste. Today, we continue to leverage synergies across our businesses to provide integrated solutions to our customers across different sectors and investing in innovative partnerships to explore new technologies for green energy.
About Tan Cheng Guan, Head of Renewables & Environment, Sembcorp Industries
Mr Tan is the Head of Sembcorp’s Renewables & Environment business, including its renewable energy, water as well as waste-to-resource businesses, and drives the growth of these businesses globally. He is also the chairman of Sembcorp’s Climate Change Working Committee responsible for the company’s performance against climate-related metrics and targets.
He brings with him broad experience in engineering, strategy, business and project development for the utilities industry. Prior to joining Sembcorp, Mr Tan spent 12 years in engineering and project management for the oil and gas sector at Brown & Root Far East, where he was based in London, Kuala Lumpur and Miri. He also spent three years in Shanghai as Managing Director of Vopak China, overseeing the growth and operations of Vopak’s businesses in the country. While at Sembcorp, Mr Tan pioneered the early development of the Group's Utilities business on Jurong Island and subsequently led the business' expansion into China, India, the UK, the Middle East, Myanmar and Bangladesh. He also drove Sembcorp’s acquisition of renewable energy businesses in China and India, as well as the acquisition of Cascal's international municipal water business.
Mr Tan holds a Bachelor of Civil Engineering (Honours) from the University of Liverpool, UK and completed the Advanced Management Program at Harvard Business School, USA.