In search of alternative energy sources

Irina: I am a partner in the Herbert Smith Freehills Energy group, based in Singapore, and I advise on a range of energy sector matters, including renewable energy projects, in the region. I moved to Southeast Asia about 13 years ago. Over the years, my practice has evolved, from predominantly coal mining, to oil and gas and LNG work, and then power and the renewable sector. Increasingly, we see projects and transactions in the energy transition space, from renewables, to hydrogen, carbon capture and storage and carbon trading. Our clients are looking at all types of energy transition projects to reposition their own businesses.

Jerome: I am Head of Legal, Japan for ENGIE, a leader in low-carbon electricity production and centralised and decentralised energy networks in electricity, natural gas and energy transition. ENGIE’s purpose is to act to accelerate the transition towards a carbon-neutral economy, through reduced energy consumption and more environmentally-friendly solutions. Specifically, and in addition to my role in Japan focusing on physical power trading, I lead the team lead helping create green solutions – including green power purchase agreements, ammonia and battery storage – in APAC and the Middle East. Previously, I worked for ENGIE for about five years, working out of our regional headquarters in Bangkok/Singapore, and then moved to the Macquarie group’s offshore wind platform, Corio Generation, in Singapore, before returning back to ENGIE in Tokyo in late 2023.

Mark: I am the managing director and CEO for the Australian Institute of Company Directors (AICD). Energy transition is one of four policy areas that we focus on at the AICD, educating and helping directors to make them aware of the issues, what best practice is and how best to connect to a community which is going to allow them to be at the forefront of contemporary governance practice.

Ben: I am head of contract management for Volta Trucks, a start-up that is developing electric trucks. Founded in Sweden, the aim of the company is to build trucks with zero tailpipe emissions, that improve working conditions for drivers and make cities safer for pedestrians and cyclists. We’re concentrating at the moment on 16-tonne trucks, with a range of 200+km so ideal for last-mile deliveries in city centres. Our trucks are manufactured in Austria and we’re focusing our operations in France, Germany, the UK and Spain. We help clients across the board, from charging infrastructure, financing and insurance to supply of the trucks, maintenance and servicing.

We have also seen from last year’s events in Ukraine and its impact in Europe that it poses a risk for countries to rely to a great extent on energy produced in other countries. I think that this risk highlights the need for certain countries to move away from the import of fossil fuels and instead focus on renewable energy produced at home.

Amos: I think it's important to recognise what has got us to where we are today, and the reality is that we wouldn't be in a position to decarbonise the world were it not for the technological and other advances that the fossil fuel industry has enabled, both directly and indirectly. For me, this recognition is key to unlocking the currently very polarised and polarising debate. This doesn’t in any way diminish my firm belief that renewables represent our best hope for the future of electricity generation, but context is everything. 

Ben: The other point I would make is that our sector – electric vehicles – is still in its infancy and there is huge potential for improvements, particularly in battery technology. Whilst there are entrenched positions, there’s also healthy competition to get the best product to market: Renault Trucks have electric versions of some of their trucks, for example. Others, like BP Pulse, are building on their strengths and seizing market opportunities in the charging infrastructure space.

Jerome: Yes, the development of battery technology is key. An interesting debate is the one taking place in relation to the role of hydrogen within the energy mix and whether it is realistic to place too much hope on this particular solution due to its inherent disadvantages. I strongly believe that hydrogen (for instance, as feedstock for the production of ammonia) will have an increased role to play in many countries in the years to come. Blending hydrogen within existing gas networks is also a relatively straightforward solution in certain countries where the infrastructure can withstand it. On the other hand, shipping hydrogen in liquid form over long distances remains technically challenging for now. 

Is it the case that the switch to non-carbon generating power etc will only happen when there is a strong commercial case, such as when renewables are cheaper than oil and gas?

Amos: Of course, any long-term solution has to make commercial sense. When I interviewed with Low Carbon, the leadership was keen to highlight that the company isn’t about environmental activism. While we are very much mission-driven, we have to be competitive with other sources of electricity production. The really good news is renewables now are not only competitive, but in many instances they are the cheapest source of electricity production. The economic case for renewables really stacks up now, and we’re seeing that tipping point with the investment community now leaning in hard.

Mark: Market dynamics will ultimately determine the way forward. The question is, does there need to be an intervention to bring forward the market dynamics? Do you need to subsidise renewables so that the average cost comes down to match fossil fuels or even better?

Irina: It is important that renewable projects need to be commercially viable – although I think that governments have a role to play here. We have seen a number of jurisdictions take energy transition seriously and put in place support mechanisms to help encourage development of renewable projects, for example Philippines and Vietnam have in the past provided generous feed-in tariffs for renewable power. The challenge is regulatory change needed to enable diversity of supply, structures that allow you to buy renewable electricity indirectly or directly from a producer in other markets that are heavily regulated.

Ben: Personally, I think governments should be leading to set favourable conditions so all sectors can transition more easily to renewables. Not only does this make sense from a climate perspective, but also in terms of energy security – as can be seen by the impact on oil and gas prices from current conflicts in Ukraine and Israel.

Is it unrealistic to expect countries to make a full energy transition to renewables away from fossil fuels as it were overnight?

Jerome: I do believe that we should be pragmatic in pursuing our collective efforts to move away from fossil fuels and understand that fossil fuels will still have a role (although progressively diminishing) in the ongoing transition. We should understand that certain countries, in particular emerging markets, will need more time and undergo more efforts than other, more developed ones. More developed nations should encourage these efforts and incentivise the move away from fossil fuels.

Irina: Absolutely, particularly when you look at renewables’ intermittency issues, by which I mean uneven power supply for example in solar and wind, not so much geothermal or large scale hydro, but then that is not available to all countries. Unless you get to a stage where you can have large-scale storage solutions that are economically viable, you are going to have to get a stable base load from somewhere.

Ben: In terms of challenges with intermittency, I think here is where technology can step in along with the creativity of the private sector and favourable conditions set by government. For example, if energy production is decentralised, small-scale storage becomes more viable. And in some cases, even EVs can store energy and release them back into the grid when needed. As I said earlier, it’s not easy! But I’m optimistic the solutions can be found.

Is there plenty of scope for renewables in Australia?

Mark: Yes, we have lots of things needed for renewable energy like wind and sun, lithium and other minerals that can be used for renewable energy solutions. One of the biggest problems facing renewable energy in Australia is the skills shortage, for example obtaining enough engineers to deliver the proposed installation of new wind turbines. With the whole world engaged in transition, there is a huge demand for those with the right skills. It used to be the technology that was not good enough. Now the technology is good enough, but there aren’t enough skills to deploy it at the pace we would like.

Jerome: I would add to that a key sector in which companies such as ENGIE have been focusing on quite aggressively over the past few years, with the help of government and governmental organisations, is green hydrogen ie, hydrogen produced from renewable energy. Since the release of Australia’s National Hydrogen Strategy in 2019 there is now a AUD127 billion pipeline of announced hydrogen investment in the country. As an example of an early success story in the sector, ENGIE and Mitsui have been developing one of the world’s first industrial-scale green hydrogen projects, providing hydrogen as feedstock into the offtaker’s existing ammonia operations in Western Australia. The offtaker then exports the ammonia from Australia to the Asian markets. The team and I worked quite extensively on the first phase of the project, which is scheduled for completion in 2024, and the team is now preparing for the next phase of the project’s implementation.

What about in Singapore, Irina?

Irina: Singapore is limited in its ability to develop renewable projects itself given its small land area. Instead, the government has announced plans to import renewable energy from neighbouring countries. The hope is that it will encourage development of renewable power projects in the neighbouring countries as well as development of interconnectors to transmit that electricity, or some of it, into Singapore. We are currently working on a number of projects that are part of this import scheme.

What can we do as individuals?

Amos: A lot! And it doesn’t have to cost anything, involve huge effort, or require painful lifestyle sacrifices. Right now, there is no excuse to be on a non-green electricity tariff - there are plenty of competitively priced 100% renewable deals out there (in the UK, at least). If you have a pension fund, check where it’s invested; most providers should offer an investment profile that avoids the big polluters without impacting target returns - consider making the switch (with advice from an IFA, of course!). Try using Ecosia (www.ecosia. org) as your default search engine; they have a tree-planting programme linked to the volume of searches made via its platform - maybe use it to search for more ideas for making easy, impactful changes like these.

Ben: A colleague in France sent round a website where you can assess your own carbon footprint. There are loads of things we can do as individuals, from changing diet to reducing flights and car journeys.

Jerome: It can range from relatively straightforward solutions such as buying an EV, carpooling or installing solar panels on your rooftop to more proactive ones such as joining and putting time and efforts into focused NGOs.