What does it take to stage a rebrand for a 160-year-old company? National piped town gas provider City Gas has opted to start with a name change: Since December last year, the company has gone by City Energy to reflect its pivot to green energy solutions.
To put the company’s legacy into perspective, City Gas — founded as Singapore Gas Company in 1861 — first lit gas lamps on the island’s streets in 1864.
Now a subsidiary of the Keppel Infrastructure Trust, City Energy produces and distributes piped town gas to more than 870,000 residents, commercial and industrial customers in the city-state.
“At this juncture, the country is rightfully trying to decarbonise. As the national piped gas company, we see this [pivot] as an important contribution to the national effort,” says its CEO Perry Ong in a recent interview with The Edge Singapore.
The company’s plans for an energy transition is a multi-year undertaking for City Energy. It is now exploring the use of low-carbon energy solutions like green hydrogen to strengthen its core energy offerings.
Unlike fossil fuels, green hydrogen does not emit carbon dioxide during production or combustion.
See also: Sembcorp and NYSE-listed Bloom Energy to bring low-carbon solutions to Singapore
With City Energy’s existing pipelines stretching across the island, Ong sees a “highly promising” opportunity in distributing green hydrogen. “Today, City Energy is probably the largest carrier of hydrogen molecules, because town gas itself is 50% hydrogen. So, we are already delivering hydrogen on a daily basis to hundreds of thousands of homes and businesses.”
Town gas is mostly made of hydrogen and methane. Unlike natural gas, town gas is man-made. There are two separate gas pipeline networks in Singapore: Town gas is mainly used for cooking and heating by residential and commercial customers, while natural gas is mainly used for electricity generation and industrial feedstock.
See also: Unlocking opportunities in Asean while managing governance and compliance risks
Rather than getting our hydrogen from natural gas, we are exploring the possibility of using green hydrogen as a replacement in town gas.
Exploring possibilities
The switch to green hydrogen could be a natural fit for City Energy, says Ong, who joined City Energy in October 2020 from NTUC Foodfare Cooperative, where he was CEO since 2008.
He adds: “Rather than getting our hydrogen from natural gas, we are exploring the possibility of using green hydrogen as a replacement in town gas. If this aspiration is successful, it can bring a very exciting future for the company.”
Still, the technology is still in its infancy. “The cost is so high, but eventually, given time, all this will improve — that’s the hypothesis,” says Ong.
Last June, a multi-ministry effort that included the Economic Development Board (EDB) and the Energy Market Authority (EMA) issued a joint press release on their study of hydrogen imports in Singapore.
They found that hydrogen is an appropriate energy carrier that could diversify Singapore’s fuel mix towards low-carbon options for electricity generation and heavy transportation.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
However, it is challenging for Singapore to produce green hydrogen at scale and thus, the city-state would need to explore importing hydrogen via shipping or piping from neighbouring countries.
Last December, City Energy signed a memorandum of understanding (MOU) together with Australia’s largest natural gas producer Woodside Energy, Keppel Data Centres, Osaka Gas Singapore and City-OG Gas Energy Services to study the feasibility of a long-term supply chain of liquid hydrogen from Western Australia to Singapore.
Hydrogen can be liquefied by cooling it to below negative 253°C. The study is expected to continue until mid-2022, when the parties will decide on the next phase of their collaboration.
Finance Minister Lawrence Wong announced at Budget 2022 that the city-state’s carbon tax rate will reach between $50 and $80 per tonne by 2030, or 16 times the current rate.
Ong welcomes this move: “The hike is a good demonstration of Singapore’s government’s strong intention to nudge energy producers and energy users in the right direction. It will definitely make businesses reconsider whether they want to continue with existing energy sources.”
Push for reneweables
He also believes this will not affect Singapore’s appeal to multinational corporations. “I think the attractiveness of Singapore as a good place to do business in Asia will remain unchanged.”
Instead, companies will have to rethink their equipment, especially if they are not running on renewable energy.
This energy transition process is not going to be smooth sailing. Energy is a volatile [industry].
With a carbon tax rate that will spike from $5 per tonne now to $25 per tonne in 2024, “the facts speak for themselves”, says Ong.
“Given the fact that they may need some time to plan for it, to adjust their energy consumption, the time is now to start planning and test bedding,” he adds, conceding that the decade ahead will be challenging.
“This energy transition process is not going to be smooth sailing. Energy is a volatile [industry]. Whenever there is a global event, like what’s happening in Russia, there may be imperfections in the demand and supply, which cause market volatility.”
Read the full cover story
See: Walking the energy tightrope: Can Singapore achieve both energy security and net-zero?
See also: War in Ukraine accelerating push towards renewables
See also: Surbana Jurong's master plan for climate change
He continues: “[We must] definitely press on to be more sustainable. But to manage volatility, making sure that there is a sufficient energy source at all times and managing the cost — those become important.”
“In the next five years, City Energy will probably make a lot more headway to offer a comprehensive, holistic package of products and services to help homes and businesses decarbonise.”
Photos: Albert Chua / The Edge Singapore
