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An opinion editorial by Ms Cindy Lim, CEO of Keppel’s Infrastructure Division which was first published in the Business Times.
Since the Paris Agreement was adopted under the United Nations Framework Convention on Climate Change in 2015, the world has made significant strides in its commitment to climate action and renewable energy growth. Large emitters like the EU, the UK, and Japan have committed to ambitious net-zero emissions targets by 2050, while China is aiming for carbon neutrality by 2060. However, despite these pledges, we still face the risk of global warming reaching between 2°C and 4°C by the end of the century, leading to catastrophic consequences such as higher sea levels, the loss of biodiversity, and extreme weather events.
To avoid such a scenario, a global step shift towards low-carbon economies is urgently needed, with cooperation and accountability at its core. Industries, particularly those heavily dependent on fossil fuels, will need to find solutions to avoid the potential “carbon lock-in” which would delay the transition to cleaner energy alternatives.
Decarbonisation at the Source
Electricity generation is the largest contributor to global emissions, accounting for over 40% of the world’s energy-related emissions in 2022, according to the International Energy Agency. Coal-fired power plants (CFPPs) are in turn responsible for three-quarters of total power sector emissions worldwide. Southeast Asia, home to the fourth-largest and one of the youngest fleets of CFPPs with an average age of less than 15 years, faces a unique challenge in the race to decarbonise.
In response, Keppel, in collaboration with ACEN and GenZero, is leading a transformative project in Batangas, the Philippines, to retire a coal-fired plant and replace it with a clean energy facility. This project aims to set a precedent for the early retirement of coal plants across Southeast Asia by utilising high-quality Transition Credits to facilitate the pivot to cleaner energy.
Keppel signed a Memorandum of Understanding with ACEN and GenZero to jointly explore the origination and utilisation of Transition Credits to accelerate the retirement of coal-fired power plant in the Philippines and replace it with a clean energy despatch facility. The signing was witnessed by Ms Grace Fu, Minister for Sustainability and the Environment of Singapore (middle, right) and Ms Maria Antonia Yulo-Loyzaga, DENR secretary of the Philippines (middle, left). Southeast Asia is also rich in renewable energy resources, offering the potential for accelerated transitions. The ASEAN Power Grid, focused on multilateral power trade, exemplifies regional collaboration to enhance energy security and grid resilience. The successful Lao PDR-Thailand-Malaysia-Singapore Power Integration Project in 2022 marked a significant step toward cross-border renewable energy cooperation, with Keppel importing up to 100 MW of hydropower from Laos into Singapore. This sets the stage for the expansion of renewable energy exchanges across the region.
Leveraging Clean Energy Innovations
Technological innovation is another crucial pillar in driving the low-carbon transition. Hydrogen, carbon capture and storage (CCS), and next-generation alternative clean energy sources all hold promise. Hydrogen, in particular, stands out as a zero-emission solution for hard-to-abate sectors like power generation and steel production.
Keppel is working with international partners on several promising hydrogen initiatives including the Central Queensland hydrogen (CQ-H2) project, which is one of Australia’s largest green hydrogen developments that aims to produce 2,500 MW of renewable hydrogen for both domestic use and export. Keppel is also exploring an industrial-scale green ammonia facility in Australia with Incitec Pivot Limited and the development of a green ammonia supply chain in India in partnership with Greenko.
In Singapore, Keppel is collaborating with ExxonMobil to explore low-carbon ammonia for use in commercial and industrial applications. These efforts align with Singapore’s first hydrogen-compatible 600 MW cogeneration power plant, Keppel Sakra Cogen Plant, which will begin operations in early 2026. In addition, Keppel is involved in designing low- or zero-carbon ammonia solutions for power generation and bunkering on Jurong Island.
The Keppel Sakra Cogen Plant will generate significantly less CO2 than that of Singapore’s average operating efficiency for the equivalent power generated using natural gas. Closing the Financing Gap
Despite the urgency of climate action, financial support remains inadequate, particularly for developing countries. The goal set by developed nations to provide US$100 billion annually to help fund climate action in developing countries has not been fully met. Meeting the Paris Agreement’s targets will require investments estimated between US$2.4 trillion and US$4.6 trillion annually.
To address the funding shortfall, de-risking mechanisms must be implemented to provide stability and predictability, which are essential for long-term investments. Policy, regulatory, technological, market and environmental risks must be mitigated to enhance the bankability of projects.
As a global asset manager and operator, Keppel is uniquely positioned to bridge the gap between the need for large-scale energy transition investments and the limitations of bank and government balance sheets. Leveraging its deep domain expertise and extensive operating capabilities, Keppel can develop tailored private funds, real assets and credit solutions that meet the varied risk-return profiles of investors and unlock substantial sources of funding for sustainable projects and businesses.
A recent example was Keppel’s collaboration with the Asian Development Bank and Enterprise Singapore to explore US$800 million worth of energy transition and sustainability projects in Asia and the Pacific from 2025 to 2030. This initiative, which includes blended finance, aims to mobilise private investments to build a pipeline of high-quality infrastructure assets.
Scaling up Proven Solutions
To meet global climate goals, we must also accelerate the deployment of proven, mature technologies but in smarter and more efficient ways. One often overlooked area is energy efficiency. Standardising and aggregating smaller-scale projects can make them easier to replicate and scale. Keppel’s Energy-as-a-Service (EaaS) offering, launched in 2021, aims to drive the widespread adoption of energy-efficient solutions, such as distributed solar photovoltaics and electric mobility, by allowing customers to access these technologies without significant upfront investment.
Keppel’s EaaS solution is already gaining traction with major commercial and industrial clients in advanced manufacturing and the built environment. In Singapore, Keppel has secured contracts for groundbreaking projects, including the country’s largest single-site rooftop solar installation of 43MWp at Changi Airport and a 20-year contract to provide centralised cooling systems for over 3,500 households in Tengah Town. Keppel is also implementing Southeast Asia’s largest public EV fast-charging hub at Jalan Papan in Singapore, with up to 80 charging points. Successful in-roads have also been made in Thailand, Vietnam and China in the past year.
Harnessing the Power of Artificial Intelligence
The swift expansion of Keppel’s EaaS offering rides on the application of Artificial Intelligence (AI), which is a transformative force for various industries. While AI is inherently energy-intensive to develop and deploy, it also has great potential to revolutionise the energy landscape. Keppel’s Operations Nerve Centre (ONC) at Changi is an example of how AI and machine learning can be deployed to enhance energy resiliency and efficiency in the delivery of EaaS.
Keppel’s ONC serves as a mission critical nucleus that leverages AI and machine learning to provide round-the-clock performance monitoring of the Company’s cooling and energy systems.
The ONC functions as a centralised hub for Keppel’s cooling and energy systems. The facility utilises real-time data, predictive analytics, and machine learning-driven algorithms to manage and optimise the performance of Keppel’s energy assets and services across Singapore. The ONC also leverages AI to detect anomalies within the energy systems and distribution networks before they escalate into costly failures. This predictive capability reduces both unplanned downtime and the risk of outages, bolstering overall system reliability.
As the global push for the energy transition intensifies, AI and smart grids are emerging as critical technologies for integrating renewable energy sources with the grid, ensuring energy efficiency and enhancing the overall resilience of energy systems.
The Time is Now
Combatting climate change is an enormous challenge. While we often talk about the search for a “silver bullet,” in the context of climate change, there isn’t a “green bullet” or a single, effortless solution. It will require significant coordinated efforts by multiple stakeholders spanning technologies, financing and policy frameworks.
The need for collaboration between governments, industries, and financial institutions has never been more critical. Therefore, platforms, such as the annual Singapore International Energy Week, are important as they enable various stakeholders to share their views on the various challenges they face and collectively overcome them. With initiatives like those led by Keppel, combined with collective global action, a step shift to a low-carbon future is within reach. The time for bold, decisive action is now.
This article was first published in the Business Times on 22 October 2024.
