Singapore is rolling up its sleeves for the energy transition, says HSBC’s ESG Research team, with new standards for upcoming power plants with emissions intensity and hydrogen readiness requirements.
The Energy Market Authority (EMA) released on Oct 26 new emission performance standards for new and repowered fossil fuel-fired power plants.
Plants will be required to run within an emission intensity limit and also have technical capabilities for hydrogen when they begin commercial operations.
HSBC’s Polo Heung, Heidi Tang and Chan Wai-Shin think Singapore is now moving from a “target-setting phase” to an “implementation phase” of decarbonisation.
Singapore is also anchoring its role as a regional leader of energy transition, as the standards could guide other Asean countries to establish and adopt emission limits for their power sectors, they add in a Nov 8 note.
EMA’s new standards require all new and repowered electricity generation units in Singapore to limit their emission intensities below 0.355 tonnes of carbon dioxide equivalent per megawatt-hour (tCO2e/MWh), or under an equivalent emission allowance cap.
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The new intensity limit will improve emission efficiency by at least 15% of the existing grid-connected power units, which have an operating margin grid emission factor of 0.417 tCO2e/MWh in 2022, say Heung, Tang and Chan, who are all based in Hong Kong.
Although generally positive and standing out in Asia, the limits still slightly lag behind international peers, such as the US and Canada, add the analysts. Singapore’s standards are, therefore, catching up to the international level.
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Ready for hydrogen
In addition to emission intensity limits, EMA requires all new and repowered units to be ready with the technical capability to combust at least 30% volume hydrogen-blend with natural gas.
This does not mean that new electricity plants must use hydrogen in their fuel mix, says HSBC’s analysts. “Still, we think it is a solid move towards Singapore’s target of supplying up to a half of its energy demand using hydrogen by 2050. Also, we think it implies potential hydrogen combustion requirements in the future, and thus will facilitate hydrogen development and investments both domestically and overseas.”
Considering the significant share of fossil fuels in Asean power mix and the young age of electricity generation units, the transition from fossil fuels to clean energy will take time, they add.
The Asean Centre for Energy suggests that emissions standards for fossil fuel power stations will contribute to decarbonisation in Asean during the transitional period. Such standards could benchmark the performance of existing units and encourage efficiency enhancement at the unit level.
“We think Singapore is setting an example for other Asean member states to establish and adopt their own standards. Moreover, fossil fuel phase-out and phase-down is expected to be widely discussed at COP28 later this year, which is likely to put pressure on Asean countries to reduce their fossil fuel reliance,” says HSBC.
The 2023 United Nations Climate Change Conference or Conference of the Parties of the UNFCCC, or COP28, will be held from Nov 30 to Dec 12, at the Expo City, Dubai.
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Heung and Tang are associates from HSBC’s ESG Research team, while Chan heads HSBC’s ESG Research and its Climate Change Centre.
Infographics: HSBC
