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BW Businessworld

How Singapore Can Serve As A Regional Hydrogen Hub

Singapore has proven its status as a regional trading hub in petroleum and maritime shipping-based services and with partnerships with countries like India it has the potential to repeat the feat with Hydrogen

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In September, the inaugural India-Singapore Ministerial Roundtable (ISMR) was held in New Delhi, attended by Singapore's Deputy Prime Minister Lawrence Wong and other cabinet ministers. The Indian delegation was represented by Union finance minister Nirmala Sitharaman, external affairs minister S Jaishankar and commerce minister Piyush Goyal.

Both countries recognised several new areas of development and cooperation, such as food and energy security, green technology, particularly green hydrogen, digital connectivity, and skill development. 

While there is a lot of convergence of interests between the two in these areas, energy cooperation, especially on green hydrogen, has a lot of potential, and India can benefit from it as it goes ahead with its energy transition.

Media reports stated that India would explore the development of a hydrogen hub with Singapore, which would pertain to the production of cheaper renewable energy for manufacturing green hydrogen, electrolyser manufacturing and hydrogen storage technologies.

Both countries have ambitious targets to tackle climate change as laid out at last year's COP26 in Glasgow and renewable energy deployment forms the core of these efforts. Singapore is harnessing and tapping its 'Four Switches' model to transform its energy supply through natural gas, solar, regional power grids, and emerging low-carbon alternatives.

It generates about 95 per cent of its energy using natural gas, targets 2 gigawatts of peak solar power by 2030 and is exploring ways to import large-scale low-carbon electricity.

On emerging low-carbon alternatives, a spokesperson of Singapore's Ministry of Trade and Industry (MTI) told BW Businessworld, "We are also keeping a keen eye on low-carbon alternatives, such as hydrogen and geothermal energy. We foresee low-carbon hydrogen playing a key role in decarbonising Singapore's power grid, as it emits significantly lower emissions than natural gas."

Singapore's government has invested USD 38 million to support 12 research projects on low-carbon energy solutions.

While it has made strong efforts towards adopting renewables into its energy mix, the non-availability of vast land tracts means that they cannot be feasible in the long run, making the production at scale of green hydrogen domestically difficult.

Even though we are making progress on the solar front, domestic solar generation will not be enough to meet all our energy needs, the spokesperson said.

Sharad Somani, Partner, Head of Infrastructure Advisory, KPMG in Singapore, in a note, mentioned similar limitations.

"While the envisaged green energy import from neighbouring countries can be critical in decarbonising our grid, it may not be able to sustain green hydrogen production in Singapore," Somani noted.

However, he added that Singapore could leverage its strategic geographical position and established logistics hub status to become a storage, trading, and transportation hub for low-carbon hydrogen.

Media reports also stated that India plans to propose to utilise Singapore's maritime expertise for green hydrogen transportation.

India's Niti Aayog, in a June 2022 report titled, 'Harnessing Green Hydrogen,' noted that the prospect for pipeline trade to major ports and energy trading hubs in the region like Singapore exists if end-use sectors such as shipping and the airline industry increase their use of hydrogen.

"Hydrogen can help decarbonise hard-to-abate sectors such as sea and air transportation. MTI is working with various agencies and industry partners to support research efforts in hydrogen and to develop a strategy and supporting ecosystem for the deployment of hydrogen in Singapore," the spokesperson said.

Singapore has proven its status as a regional trading hub in sectors like petroleum and maritime shipping-based services. In June 2022, it also commenced the regional Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP).

"It is the first cross-border power trading project that Singapore embarks on to import low-carbon electricity. Such efforts will support not only Singapore's but the region's decarbonisation efforts and the development of the renewable energy sector," the spokesperson said.

Through partnerships with countries like India and other countries in the Asia-Pacific region, Singapore has the potential to shape the region's energy ecosystem by connecting grid infrastructure, pipelines, and logistics.

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