Clean Tech Like Carbon Capture, Hydrogen Can Scale Up With State Support, Blended Finance: Panel

At the roundtable discussion on Asia’s energy future on Oct 30, panellists discussed solutions needed to increase the deployment of novel energy technologies in South-east Asia.

SINGAPORE - Strong regulation, regional cooperation, and blended finance mechanisms are among the solutions needed to increase the deployment of novel energy technologies in South-east Asia, said panellists at the Singapore International Energy Week on Oct 30.

Such technologies include carbon capture, utilisation and storage (CCUS) as well as hydrogen. They are gaining prominence across ASEAN as countries seek to reduce emissions from their power sectors at a time when energy demand from the developing bloc is expected to rise.

Mr Craig Stewart, senior vice-president for international exploration and production and CCUS at Indonesian oil and gas firm MedcoEnergi, said CCUS technology is well established but costly.

CCUS technology can take planet-warming carbon dioxide (CO2) out of the atmosphere for storage underground or for conversion into other useful materials such as fertilisers and biofuels.

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Such projects can be realised if upfront costs for such projects are funded by the government, as they are in places like Europe, Mr Stewart said during a roundtable discussion on Asia’s energy future moderated by The Straits Times correspondent Shabana Begum.

He added: “The technical solutions are there, but the cost is high. The next questions about the commercial case here are who would do these projects and who is going to pay for them?”

Mr Kelvin Wong, managing director and global head of energy, renewables and infrastructure at DBS Bank, said strong regulatory frameworks are also important in helping to scale novel technologies.

He noted that renewable energy such as solar energy used to be costly and less widespread, although government policies helped to kick-start growth.

According to a report by the International Renewable Energy Agency (IRENA), total installed costs of solar panels have fallen by 86 per cent from 2010 to 2023.

“Whenever there is a new kind of technology, there’s always a need for strong government intervention, both on the policy front as well as to make the revenue models actually work,” Mr Wong said.

One way to help transition to clean energy technologies is through blended finance, he added.

Blended finance initiatives that involve concessional capital with higher risk tolerance or even the willingness to accept losses, such as philanthropic or governmental funding, could lower the barrier to entry for investors to get involved in such projects.

Another emerging technology is hydrogen. This refers to a fuel that produces no planet-warming CO2 when burnt.

The use of green hydrogen is also still costly, said Mr Beni Suryadi, senior manager for ASEAN Plan of Action for Energy Cooperation and Strategic Partnerships at the ASEAN Centre for Energy.

Green hydrogen is made from renewable sources like solar energy, but most of the hydrogen today is produced from fossil fuels, making it “grey” hydrogen.

But this is where government regulation can come in to send a signal about the importance of green hydrogen. Mr Suryadi said the demand for this fuel is projected to grow significantly and is becoming part of “realistic energy planning” among many countries in ASEAN.

Even though the region is also tapping renewable energy, the use of green hydrogen is especially relevant for sectors like steel and ammonia because of their reliance on high temperatures, which can be reached only through burning fuels.

Another new energy form for the region is biomethane.

On Oct 27, Minister-in-charge of Energy and Science & Technology Tan See Leng said Singapore is exploring the use of biomethane, also known as renewable gas.

Biomethane is chemically identical to fossil-derived methane – the main component of natural gas, which Singapore currently relies on for more than 95 per cent of its energy needs.

Biomethane is produced by upgrading biogas – a process that removes carbon dioxide and other contaminants – from organic waste or residues like agricultural and food waste.

It is considered to have a lower carbon footprint because the carbon it produces when burned is part of a natural carbon cycle that would have been released into the atmosphere anyway through the process of decomposition.

Biomethane is already used as an energy source in Europe, with most of the fuel coming from the agricultural sector.

Another panellist, Mr He Yiyong, founder and director for biogas firm Straits Bio-LNG, said the potential for biomethane production in South-east Asia is “severely underestimated.”

This is because there are places in Malaysia, Sumatra and Indonesia where methane gas is released through the processing of wastewater generated from palm oil production, among others, so the fuel only needs to be captured.

Moreover, South-east Asia has plenty of biomass – which is an organic material for biomethane – as plants grow year-round with concentrated feedstock supply from dense plantations, he added.

The panellists also touched on the need for strong cooperation and coordinated policies between countries to leverage clean energy and emerging technologies.

For example, to help realise the ASEAN power grid, cooperation is needed to boost cross-border energy trade since energy market structures differ from country to country across the region, said DBS’ Mr Wong.

Australia could also be a partner in helping South-east Asia advance renewable energy uptake, said Ms Lynda Hayden, who leads the Regional Partnerships Branch in the Australian government’s Department of Climate Change, Energy, the Environment and Water.

“We have a lot of learnings that we can share and that’s where cooperation comes in hand, and that is the low-hanging fruit – cooperation to advance renewable uptake in the region,” she said.

On Oct 28, Singapore’s Energy Market Authority (EMA) and its Australian counterpart Australian Energy Regulator (AER) signed a memorandum of understanding to strengthen regulatory exchanges and energy cooperation, including exchanging greater knowledge on low-carbon technologies.