Singapore plans to introduce carbon tax – does this mean more RE for the city-state in the future?

In a nutshell:

In 2015, Singapore joined the Paris Climate Agreement under which 196 states undertook to reduce greenhouse gas emissions.

By 2030, the city-state intends to reduce greenhouse gas emissions by 36% on 2005. To approach this goal, a plan to introduce a carbon tax (CO2 tax) was announced by the Finance Minister in this year’s budget speech. This tax should apply from 2019 and should level at SGD 10-20 per tonne of CO2 emissions. According to experts, CO2 tax would be paid by 30 to 40 large emitters and could indirectly contribute to boosting the production of energy from renewable energy sources.

With a share of more than 96 percent, liquid natural gas is Singapore’s primary energy source, which is mainly due to the geographical and climate conditions prevailing there. Therefore, Singapore is first of all focusing on promoting the development of clean and sustainable energy production technologies and the related research activities rather than on applying them. In this area, there are numerous incentive programmes and showcase projects, such as the project conducted on Semakau Island, a small island off the coast of Singapore. Here, Engie SA in collaboration with Nanyang Technological University Singapore

and Schneider Electric SE is installing a micro grid (independent power grid) based on integrated energy production from wind, solar, tides and a hydrogen storage system. Such island-based solutions are expected to have high potential in South-East Asia where there are about 1000 inhabited islands with no connection to a traditional energy supply network.

In Singapore, only solar energy can be actually regarded as a feasible alternative to fossil fuels that can be used for domestic energy production. PV installations are mounted on rooftops and facades and installed in form of swimming islands in water reserves. By 2020, the city-state aims to meet at least 5 percent of the power demand using solar energy; this would correspond to a capacity of 350 MWp. Apart from funding programmes for technology development also the contemplated CO2 tax could contribute to making power from renewable energy more attractive in Singapore.