The following is a C and a podcast. We've had a little break, but welcome back to the climate conversations. I'm Jamie Hope. Natural gas prices have tripled since the start of this year, in large part fueled by demand from Asian economies emerging from lockdown. And here in Singapore, given our dependence on natural gas imports for electricity generation, the consequence is that electricity costs will surge. Already, the
government has warned and advised households to conserve electricity. But as our society shifts towards greater electrification, think cars, 5G devices, datacentres, energy demand and costs will only rise. How can we balance needs with our commitments to reduce carbon emissions? How long do we wait before alternative energy sources are reliable? And what does this all mean for the man on the street who may find his electricity bills going up?
With me to discuss this is Lim Han Kwang, CEO of General and group head for Retail Regulation and renewables at Whitesell Power Soraya Denticles parent company. He's an 18 year veteran in the local energy industry. Welcome Hong Kong.
Hey, hi. Thanks, Jimmy.
I'm going to jump straight into the first question and, you know, talk about the industry. Given your experience, you've been doing it nearly 20 years now. Start by giving us a broad sort of overview of what our overall national energy and electricity ecosystem looks like now in terms of infrastructure, in terms of players that talk about sustainability compared to, say, 10 years ago. Right. And what has
changed in the last two years since the pandemic? And what trends are you seeing in terms of consumption price, things like that?
The Singapore energy sector has come a long way in. He has actually moved from Orbis to achieve natural gas over the last few years. Actually, from 2.0 to to now in India evolve significantly, and now majority of the power is actually generated by a very efficient gas cycle. 90 percent of the coal is actually generated by these inefficient machine. You look at the mix that we have seen in Singapore over the last few years, I think
that's largely due to climate change. The government has no one to actually bring in more green power into the space. So in the last few years, actually, we are seeing more and more solar installations putting into the system as we are speaking now, about 4500 reconnect that solar PV in the system that accounts for about 240 megawatts. If you while you look at just the installed capacity, it's
about five percent of our peak demand of 7000. But the more actual electronic that's being generated after netting off as the internal consumption and due to the intermittency of the solar panel, you do a contribution to the generation in total is actually less than one percent. To achieve this,
a of wind power that's available in the market. The government is quite clear that you want to continue to lower the carbon emission, and we have actually set ourselves some targets that hopefully by zero trees, you will want to make sure that solar installation actually heat 2000 megawatt bill recently. We are also looking at importing power from
the neighboring country. We have seen countries that allow even for militia by trying to import power from them to actually increase more renewable power injecting into our group.
Now you know that the interesting about about you and you have two hats, so to speak, your generator as well as a retailer, right? How does this model affect the way that you work? Does it make it more efficient in bringing such new alternative options for all customers onto the table? What kind of efficiencies are you seeing?
She calls Jen Taylor. I believe we are all retailers that's backed by power generation company. She brings about a lot efficiency because we are able to control the amount of electricity that we generate, able to control the cause, and therefore, with all the efficiency throughout the company to the end to end process, actually, we are able to provide very affordable as well as competitive price for our consumer.
Going back to April 2018, that's when EMC, our Energy Market Authority, began moves to launch this new open electricity market. And by 2019, the year after, all of us can now choose from different retailers looking at it from the consumer perspective, aside from choosing a plan that fits our budget and needs of households. I learned that companies like yours now offers carbon offsets. This thing called the power eco add on. Explain how this contributes to your overall
strategy and how to it take a bean has. Do customers really know about this or are they really attracted to it?
Jimmy, it's good that you're aware of what you see in Singapore lately. You're in the market was open one eight and are actually about 12 or year because we can be told it could be. So being divestiture? So it's very important for us to stay ahead of the curve by understanding what our customers actually require and keep it up. And we look at the trend and we know that consumers are getting more and more conscious about how they can actually help the environment. And that's why
we came out with the power eco only product. While customer we understand or not every customer may be prepared to buy a 100 percent green. We may want to choose the green contribution level that suits the affordability before the choose the plan. So we then we came out with these how we go on with the customers, any power plan before we get to choose whether they would like to have 25 percent, 50 percent, 75 percent, 100 percent of green contribution in the electricity plan. So it
sounds like a public key concept to you. So that's exactly how we came up with the ideas.
OK, explain to me how it works. If I choose 100 percent, what does it mean?
Should the honor actually force on? What we call a carbon neutral electricity plan, meaning that while the electricity that's being supplied to you continues to be drawn from the grid and the generator from the gas fired machine in the system, what we do is that we will actually, which is either carbon credit or renewable energy. So from green projects not using a full offset or Singapore to actually help to offset your carbon emission for the electricity that you are using.
What's the incentive for me? I mean, obviously, let's say I'm entirely green conscious and I want to do as much as I can, and I have the financial capacity to do it right. What's going to sort of make me go for 100 percent versus, let's say, the 50 percent? What's your value proposition to me?
That's what I a single. If you really want to have green electricity, what can you really do, right? So I think one of them, of course, if you have a rooftop house because you just like our own solar installation, I think that's actually one very quickly when you install your own solar panel and then you get supplied with green power. Alternatively, if you don't have a pot of your own light, you can actually try to see whether anybody has a rooftop solar into a green energy by daylight.
You see that. But then if all these options are not available, the best we know in the market for you to do your part for the environment, actually to choose the carbon neutral electricity where you actually make payment for the carbon credits or renewable energy source to support green projects to offset the emission of electricity consumption that
you're using. So if you asked me whether you would like to do 100 percent or to, you do 50 percent honesty, I think that's why we launched the eco option. You actually get to choose what you want. For example, I just give you some numbers that you decided to go for carbon credits and you got 50 percent. That will cost you about comedy based on a carbon price about 80 cents per month, 80 cents.
In addition to, let's say, does it depend on how much electricity you use?
Yes, I think these could be phased out based on the Singapore average consumption of 100 kilowatt hour till you think about it is that it is a more for a month or 50 percent while using carbon credit to be something that suits your budget. Why not write? The math is quite simple, but you just so you be sleepy. A typical household. Maybe you just pay another one dollar 60 cents. So depending on your budget, I would say that it's really free for you to decide.
Yes, interesting. How do I get reassured that if I pay the $1 60 cents, it goes to the right places? And do I have a choice in where it goes to where the credits are paid into?
At this point, you don't get to choose where you get. I should give you a choice whether you want to buy carbon credits or you going to buy the new energy system and could actually make sure that we produce all our carbon credits or the renewable energy source. So it is a big fight, but internationally recognized standards. For example, for our carbon credits, we actually purchase carbon credits only from jet that has met the standard called the very fight.
This administered by a company called Beaver Independent Party that explain these ideas and all project that has passed the verified carbon standard will go through a robust independent verification process, and any carbon credits issued by them is being tracked on the registry to ensure that emission reductions are not copied, and similarly, that we procure renewable energy. So we are
buying them from projects that fulfill the extended. So I will say that by us buying from a reputable or credible source, I think that should give you the assurance that your money has actually gone to support the green projects.
It's good to hear so that the key thing for me now. How has the take up in the U.S., Singaporeans being vaguely interested in paying a little bit more? Well, it's being a little bit more green.
We launch it around August, doing the National Day period. I would say the initial response. I would say I'm quite satisfied. We actually see about 10 times more new customers signing up for this compared to a period where I just offer no option but just 100 percent green or do people. What is even more encouraging that I also see some of my existing renewable customer who are not green actually choosing be political on when they renewed
my stimulus. I will say that is encouraging. View that it takes time as consumers become more aware of the climate change and what to do with the pot. I believe this on. We'll continue to gain traction.
Do you think in the longer term, the action where the real influence is going to be may not be in households then, but the bigger electricity's are consumers. It could be corporate, it could be industry. Are you guys looking in that direction or you sort of balancing your approaches between households and larger consumers?
This carbon neutral electricity can actually be offered to both residential S.O.S. the commercial. So we have started by introducing it to the residential customer and definitely offering such so-called carbon neutral electricity is something that we are also in the works to provide to our commercial industrial customer base bill.
I'm going to take this sort of another little bit of a bigger picture and talk about something that's really happening now. We see what's happening in Europe, for example, right where natural gas prices have been going up. Minister Gan Kim Yong now has said that electricity prices here are bound to rise as well, telling people to be
careful about how they use electricity. As you see all these sort of developments happening, do you think these sort of external events, these price shocks give us more impetus to look at even more alternatives beyond energy imports. And what do you do? Does this have any impact on your efforts both rolling out on this, as well as things like this power eco add on and try to push people to create a little bit more for the green option.
We all recognize that Singapore, a country where we do not have a lot of natural resources, so even for a power plant is generated by natural gas and electric, it's important the price of all these to all with you are definitely affected by the global price movement or demand supply. So I think we still fight that increase in price is unavoidable if the global price of the
materials are increasing as well. This is not actually the real US from the direction that we should continue to try to achieve and or what that net zero by two zero five zero should that the temperature do not increase by one point by adding We need to stay on course. You look at what you go on, actually, does it fluctuate with the so-called fuel cost switching, even though the underlying electricity could be higher? But actually the cost to produce the carbon credits also is not changing
yet because these are not theoretical. So I would think that the incremental cost to you to be increased to remain the same. If I look at the current price the retailers is offering to the residential, even after you on the pelikula, I think it's still cheaper than directly to, but interest to go green should continue to in a lot traction moving forward.
Yeah, I'm therefore going to ask you the next question that you put on your wiki also right ahead. And talk a little bit more about the alternatives there for in renewables. You know, our government has announced the nice part of the Singapore Green Plan, working on four switches of supply natural gas as we've been talking about solar regional power grids and emerging low carbon alternatives as part of the overall national transition. Obviously, it's not going to
be easy. A huge part of it is going to be infrastructural, sitting from where you are, what are the biggest sort of obstacles or challenges for a country like Singapore in terms of infrastructure going ahead and being able to tap on all these four in parallel and sort of being able to switch from one priority to the other? Because as we have seen, yes, natural gas is perhaps
one of the cleanest and most efficient energies. But if you're going to move away from that as well to other things, a solar regional power grid, what are the challenges that we need to look at as we head towards 2030 and beyond? You think
so? You're right. The way we look at it, we've got a big decision on how we want the energy story or Singapore to be like, we actually need to look at tree. I spoke the environmental sustainability, affordability and reliability component. I think these are what we typically call the Trailhead model that any policymaker will have to actually consider when they want to look into how to get the right mix of public to Singapore for the fall.
Suggest if you look at the right. I think solar energy definitely will continue to be the most promising renewable energy source in Singapore, and we've all targeted weeks to gigawatt peak. I think to go up it will be the maximum, hopefully, that we could actually get from the so-called land and the buildable space in Singapore so that you sell would not be able to do all the requirements and more. You know, solar power fluctuate depending on whether it's not just about sunlight. And so you can
actually meet the sustainability by introducing solar energy. But the intermittency created by the solar is something that we also need to look out for. So next, stepping in the regional policy today, I think it's only one connection we might share. But actually, that connection was never meant for commercial purposes to get access to more sustainable energy sources that otherwise would not be available in Singapore. And we definitely need to wait and see how we get renewable
power to single. And of course, the biggest challenge is how do we bring it in? So I think that is where in terms of course, who will want to invest in submarine cables to bring power into Singapore would definitely be a key consideration if we want to make that happen. Similarly, importing coal has its own drawbacks. Well, yeah, of course. For example, if a submarine cable is dull due to outage, it could take many months to repair and do in dispute. So what happened to support as
part of false pictures? I can't see that natural gas this one of the street, because I think the natural gas will continue to play a very important role in Singapore market. Why do I even leave all that? You pull aside just solar? I don't think we would be able to get enough to supply 100 percent single fossil gas fired that she will continue to provide what I
call the beast. All these gas fired, which she can also be converted to what we call fast, that we should help to address that intermittency issue caused by the solar installations in Singapore, some of the older coal mines. They could also be repurposed to provide backup facility for the public so that this machine to actually be run
when there is a major outage of that. So the pollution is actually emerging technology things that the government is exploring the use of hydrogen to pull up the generator and carbon capture. But based on what we see, all these new technologies do have a long way to go. Maybe after two zero three five would be something where all this technology will be able to explore. So for now, the deployment of solar power import and continued usage of the gas emission would be the right strategy for quite.
You mentioned Laos early on in the conversation, and obviously the potential that people see in I draw from places like Louth explained the complications and the sort of infrastructural challenges as well. If we are going to look into options such as that, obviously when you talk about underground submarine cables, yes, people talk about Australia and solar, but it is something relatively close by to our neighbourhood, Laos.
With such a huge source of renewables. What goes into us tapping into that from the power generation perspective,
you could think about losses that you need electrically between Lao pilot, but he shouldn't. Singapore, we are physically connected to what is actually something that we need to on. You have to pass through all the different networks. You've got to move on laws to support it. You have to go through. Pilot body should be coordination of how
the electron can actually be pushed from Laos. All the way to Singapore will be something that we have never done it, but something that we have to definitely look out for. The second thing is that will be south easy, but we also have the assault. So whether each of the country has the access capacity to try to speed because most of the country would have planned for your country, for your own you. There is also another area that people have to actually, you know, there, whether that would
be the spare capacity or these electronic transmitters. I think that's why even Singapore has decided to start in a very modest manner by just trying a 100 megawatt mini to iron out the operational coordination required to bring power from Singapore first. Before we see whether there is a possibility that Peter Wheeler,
I'm going to give a little bit a bit more about you guys now vital, Soraya. You introduce me to interesting term a Taylor. Obviously, you're a generator as well as we talk about what Singapore is doing nationally. Talk about as well what local power supply such as yourself have done and must do more to minimise your own carbon footprint. Explain, for example, your power plants how much more can be gained in terms of efficiency that you think is still out there to be gained.
Wipe your pulse. The she has about 1500 megawatt of gas. So I think with the plans that these are operating at optimal efficiencies, so you ask me, is there more efficiency that could be squeezed out? I would say yes, but it would be actually significant. What is important for us is that we see that there is a need to actually work on changing our portfolio mix 100 percent
gas by it to include some power. We've all parented quite like the Whitetail Group itself is exploring whether they could develop large scale solar installations in addition to the transmission grid and actually sell this clean power to Singapore. And of course, when the power you inject it into the Singapore grip, that's where the retailer they buy sell tentacle will take over to actually start, to sell the electricity and to actually beat the electricity into the wholesale.
So I think that is how we see ourselves being able to transform who actually and so more green to our portfolio.
Talk about the national effort, though. Let me get your take. I'm sure you guys had significant conversations with the government when they were formulating policies around the carbon tax in discussions going forward now, and they've talked about raising that. What's your perspective on that in your conversations with the government as it explores raising that tax a little bit more
if you ask any company? Of course we do and will come with higher tax, but we understand through the composition. We understand that in order to encourage it to achieve our sustainability target I need the carbon tax is something that we definitely cannot avoid. So we are working with the government to actually see how we can actually moderate the increase in carbon tax. Hopefully, we will come in a way that is something that we can still pay for even.
The interesting thing is this I would imagine that the carbon tax now is at a low enough level that generators and suppliers such as yourself can in a way absorb it. Do you think as it gets higher, therefore, it will at some point get passed down to the consumer, which probably is meant to be right so that they can manage their own electricity usage as well, knowing that
the carbon tax has been factored into the price? Do you think that it will get to a point where consumers become more aware that as it gets higher, it will get passed down to them?
That will be the case. It is impossible for the generators to go if you any of these carbon tax. So maybe I see the opportunity to actually mix maybe greener power that is actually not subject to carbon tax to be more affordable, so important for us. You continue to change our portfolio, us say we have a mixture of a gas fire as well as renewable energy, natural gas fired plants is quite clean technology, but we can't just overnight displace that because they are still very important
to ensure that we liability lock system. So I think we need to deal with the fact that we need to have a mixture of natural gas, which is subject to the carbon tax and clean energy, the global carbon tax. That is the cost that the consumer would have to pay us moving towards a greener environment.
Maybe a last question now and then try to get back into a little bit bigger picture, too. In Singapore's overall efforts like going green, other initiatives are moving to electric cars, electric buses. You see things, even datacentres are becoming a big part of it. All these are big electricity users, right? Obviously. So on the one hand, we see that demand is obviously going to rise going forward for electricity. But on the other hand, we have to
wait for technology. We're going to be for infrastructural changes to happen when you see all these things happening. What does Wiki Power Soraya think in keeping up with such increasing demand, but also making sure that increases are manageable at the same time and also green at the same time? Isn't it a bit of juggling three or four balls at the same time
because the system demand will be increasing before these increasing need for electricity from datacentre or electric vehicle, right? Also further reinforced that there is a need for all the natural gas companies to continue to operate in the market to actually provide the baseload where I think I see
that the increase in demand. We definitely need to bring in more power will be the most obvious way to bring in additional power to the system so that actually we can meet the system demand while actually being green solely slowly greening the power industry. But zero other than just looking at physical infection into the treatment, we can also try to breathe more of this carbon offsetting recusal,
carbon credit or even video at the. That's help to offset the overall carbon emissions in Singapore.
Well, thank you very much. Thank you, James, and thanks for listening to the climate conversations. Stay up to date on CNN's coverage of climate change on CNN Asia. You can also find this in other CNN podcasts on our website and on iTunes and Spotify. The team behind this podcast are Christina Robert Misselling and Erin Lowe. I'm Jamie Hall until next week.