The cost of green energy like wind and solar has been falling for decades. Image: Philip Silverman
LONDON, Sep 13 (BBC) – Switching from fossil fuels to renewable energy could save the world as much as $12tn (£10.2tn) by 2050, an Oxford University study says.
The report said it was wrong and pessimistic to claim that moving quickly towards cleaner energy sources was expensive.
Gas prices have soared on mounting concerns over energy supplies.
But the researchers say that going green now makes economic sense because of the falling cost of renewables.
“Even if you’re a climate denier, you should be on board with what we’re advocating,” Prof Doyne Farmer from the Institute for New Economic Thinking at the Oxford Martin School told BBC News.
“Our central conclusion is that we should go full speed ahead with the green energy transition because it’s going to save us money,” he said.
The report’s findings are based on looking at historic price data for renewables and fossil fuels and then modelling how they’re likely to change in the future.
The data for fossil fuels goes from 2020 back more than 100 years and shows that after accounting for inflation, and market volatility, the price hasn’t changed much.
Renewables have only been around for a few decades, so there’s less data. But in that time continual improvements in technology have meant the cost of solar and wind power have fallen rapidly, at a rate approaching 10% a year.
The report’s expectation that the price of renewables will continue to fall is based on “probabilistic” modelling, using data on how massive investment and economies of scale have made other similar technologies cheaper.
“Our latest research shows scaling-up key green technologies will continue to drive their costs down, and the faster we go, the more we will save,” says Dr Rupert Way, the report’s lead author from the Smith School of Enterprise and the Environment.
Wind and solar are already the cheapest option for new power projects, but questions remain over how to best store power and balance the grid when the changes in the weather leads to fall in renewable output.
Cost of net zero
Back in 2019 Philip Hammond, then Chancellor of the Exchequer wrote to the prime minister to say that the cost of reaching net zero greenhouse gas emissions by 2050 in the UK would be more than £1tn. This report says the likely costs have been over-estimated and have deterred investment.
It also says predictions by the Intergovernmental Panel on Climate Change (IPCC) that the cost of keeping global temperatures rises under 2 degrees would correspond to a loss of GDP by 2050 were too pessimistic. The transition to renewables was, it says, likely to turn out to be a “net economic benefit”.
The research has been published in the journal Joule and is a collaboration between the Institute for New Economic Thinking at the Oxford Martin School, the Oxford Martin Programme on the Post-Carbon Transition, the Smith School of Enterprise & Environment at the University of Oxford, and SoDa Labs at Monash University.
Workers walk between solar cell panels over the water surface of Sirindhorn Dam in Ubon Ratchathani, Thailand April 8, 2021. Picture taken April 8, 2021 with a drone. Source: REUTERS/Prapan Chankaew
JAKARTA, Sept 15 (Reuters) – Southeast Asian nations need to more than double their annual investment on renewables to accelerate energy transition and to meet climate goals, a report released on Thursday by the International Renewable Energy Agency (IRENA) showed.
IRENA said, in the long term, average annual investment of $210 billion was needed on renewable energy, energy efficiency and to support technologies and infrastructure in the period to 2050 to limit a global temperature rise to 1.5 degrees Celsius.Advertisement · Scroll to continueADVERTISINGReport an ad
The investment is more than two and a half times the amount currently planned by Southeast Asian governments to reach their goals, IRENA said.
“Coal retirement, coupled with renewables and regional grid interconnection, is an indispensable step to aligning with net-zero targets,” IRENA’s Director-General Francesco La Camera said.
Southeast Asia is home to 25% of the world’s geothermal generation capacity, but the region also has major coal reserves. The region’s biggest economy Indonesia is the world’s top exporter of thermal coal.Advertisement · Scroll to continueReport an ad
While half of the members of the Association of Southeast Asian Nations (ASEAN) have pledged to stop using coal in the power sector, La Camera said climate commitments required concerted and accelerated action “that must begin now to have a hope of success.”
The region aims to have 23% of its primary energy supplied by renewables by 2025, however, investments in recent years show mixed progress, IRENA said.Advertisement · Scroll to continueReport an ad
“Accelerating energy transition is crucial in order to meet climate goals and support the region’s economic growth,” said Nuki Agya Utama, executive director of the ASEAN Centre for Energy, adding the bloc remained committed to its 2025 goals.
IRENA said countries could by investing more in renewables reduce their energy costs and avoid as much as $1.5 trillion of costs related to health and environmental damage from fossil fuels up to 2050.
Work has already commenced on the Victoria-NSW Interconnector (VNI) Upgrade project. Image: Transgrid
The Australian Energy Market Operator has declared approximately $12.7 billion of investment in new transmission lines should begin “as urgently as possible” to accelerate the transition to renewable energy and energy storage, replace exiting coal-fired power plants, and deliver a more efficient and effective grid in eastern and south-eastern Australia.
The Australian Energy Market Operator (AEMO) has today published the final version of its 2022 Integrated System Plan (ISP), outlining a 30-year roadmap of investments for what it said is “a true transformation” of the National Electricity Market (NEM), from fossil fuels to firmed renewables.
AEMO said the 104-page document, developed with involvement from more than 1,500 NEM stakeholders, calls for levels of investment in generation, storage, transmission and system services that exceed all previous efforts combined.
“Australia is experiencing a complex, rapid and irreversible energy transformation,” AEMO chief executive officer Daniel Westerman said in a statement.
“The 2022 ISP informs Australia’s energy transformation, based on an optimal development path (ODP) of essential transmission investments that will efficiently enable low-cost, firmed renewable energy to replace exiting coal generation.”
Australia’s traditional fossil-fuel fired generators are being replaced by consumer-led distributed energy resources (DER), utility-scale renewable energy, and new forms of dispatchable resources to firm those renewables but AEMO said it is critical the NEM provide the power system assets and services to ensure these resources are efficient, safe, reliable and secure.
The market operator estimates at least 10,000 kilometres of new transmission is required to connect a nine-fold expansion of wind and solar farm capacity and a near five-fold increase in distributed solar by 2050 and to treble the firming capacity from alternative sources to coal, including utility-scale batteries, hydro storage, gas-fired generation, and smart behind-the-meter virtual power plants (VPPs).
Five transmission projects across New South Wales, Victoria and Tasmania have been highlighted as top priorities with AEMO saying they should progress as urgently as possible. The five projects – HumeLink, VNI West, Marinus Link, Sydney Ring and New England REZ Transmission Link – are all currently being assessed for regulatory approval or should begin that process soon.
The five priority projects are in addition to another seven transmission links, including Project EnergyConnect and the Victoria-NSW Interconnector Minor upgrade, already under development.
Map of the network projects in the optimal development path. Image: AEMO
Westerman said the five priority projects would optimise benefits for all who produce, consume and transport electricity in the market; and provide investment certainty.
“These transmission projects are forecast to deliver $28 billion in net market benefits, returning 2.2 times their cost of $12.7 billion, which represents just 7% of the total generation, storage and network investment in the NEM,” he said.
As part of developing the ISP, AEMO and stakeholders identified the most likely future for the NEM, having considered ageing generation plants, technical innovation, economics, government policies, energy security and consumer choice.
The ISP indicates the NEM must triple its overall generation and storage capacity by 2050 if it is to meet the economy’s electricity needs in the ‘step change’ scenario.
“The step change scenario forecasts annual electricity consumption from the grid will double by 2050, as transport, heating, cooking and industrial processes are electrified and 60% of current coal generation exiting by 2030,” Westerman said.
“To maintain a secure, reliable and affordable electricity supply for consumers through this transition to 2050, investment is required for a nine-fold increase in grid-scale wind and solar capacity, triple the firming capacity (dispatchable storage, hydro and gas-fired generation) and a near five-fold increase in distributed solar.”
Today the NEM installed capacity of nearly 60 GW delivers approximately 180 TWh of electricity to industry and homes per year. In Step Change, utility-scale generation and storage capacity would need to grow to 173 GW and deliver 320 TWh per year to customers by 2050 to serve the electrification of our transport, industry, office and homes.
The ISP forecasts that variable renewable energy (VRE) capacity will increase from 16 GW currently to 141 GW by 2050. Additionally, distributed PV is forecast to increase from 15 GW to 69 GW over the same period. To firm that VRE and distributed PV, 63 GW of firm dispatchable capacity and additional power system security services will be needed by 2050.
Forecast NEM capacity to 2050, Step Change scenario.Image: AEMO
AEMO also expects that coal-fired generation will continue to withdraw faster than announced, with 60% of the eastern seaboard’s coal fleet to expire by 2030.
“Competition, climate change and operational pressures will intensify with the ever-increasing penetration of firmed renewable generation,” it said. “Current announcements by thermal plant owners suggest that about 8 GW of the current 23 GW of coal-fired generation capacity will withdraw by 2030. In the step change scenario, ISP modelling suggests that 14 GW would withdraw by 2030.”
Westerman said the need to cost-effectively deliver the investment in firmed renewables has gathered momentum in recent months.
“We’ve recently seen market dynamics exhibiting the step change scenario, including accelerated coal-fired power station closures. In addition, generation unavailability and high commodity prices further highlight the need to invest in the transmission plan outlined in the ISP to support firmed renewables,” he said.
“The ISP will help industry participants, investors, governments and communities plan for the decarbonisation of the power system to deliver low-cost, firmed renewable electricity with reliability and security.
“Importantly, the ISP will help meet state and national climate targets, and contribute to economic growth through low-cost, reliable energy.”
Startup Legends Solar has unveiled a new early-access product, Legends Rooftop, which is an online, on-demand solar investment platform. The platform allows people to purchase anywhere from one solar panel to an entire array on a remote commercial rooftop. It is pitched as a way for millennial investors to access the benefits of solar.
Users select how many panels they want to invest in, with the smallest investment starting at a few hundred dollars. The platform tracks the performance of the panels and banks the energy savings created by the solar project in the user’s account. Withdrawals can be made at any time, said Legends Solar.
The company said there are some risks in the investment, including poor weather conditions, failure of payment by the “offtaker” or power purchaser, unexpected maintenance, or natural disasters and physical damage. It said that hospitals and universities are usually very consistent offtakers.
“With Legends Solar, you can invest in a single remotely located panel, or a whole rooftop’s worth, even without the suburban minimansion and white picket fence,” said Legends Solar CEO Lassor Feasley.
SDC Energy will serve as a financial partner for Legends Solar. The company has performed hundreds of solar financings in the past.
“The team at Legends Solar has challenged us to reimagine our approach to raising equity for new solar facilities,” said SDC Energy President Charles Schaffer. “We look forward to unlocking the solar asset class for a wider and more diverse set of retail investors. By doing this, we will accelerate the transition to a carbon free society and spread its financial benefits more equitably.”
The tool tracks solar production, the amount of carbon abated, total cash earned, and dividend payments.
Structured PPAs are becoming more common in mature PV markets, where risks are shared.Image: Axpo Solutions
Power purchase agreements are ideal risk-management tools, given that electricity price volatility is the new normal and renewables uptake is a matter of urgency due to untenable Russian gas dependency. pv magazine sat down with Andy Sommer, team leader of fundamental analysis and modeling at Swiss trader Axpo Solutions, to discuss the situation of prices and PPAs in Europe.
Wholesale electricity prices in Europe have been rising – a trend which started before the war in Ukraine, but is no doubt exacerbated by it. How long will it continue?
It’s impossible to tell of course, nobody has a crystal ball and under current conditions predicting in the near term, let alone the more distant future, is risky. It’s a basic liability issue. But we can understand the many different factors, including how long Russia’s war against Ukraine lasts, and whether imports of Russian gas by Europe (and potentially other relevant countries, especially in Asia) will eventually be banned. The weather in Asia and the Americas, and the availability of replacements for Russian coal in Europe/Japan are other factors which could contribute to continued price increases.
The medium-term development is important for those planning and building PV power plants. What do you expect for wholesale electricity prices in the medium term (five to 10 years)? Can PV investors rely on higher revenues?
As mentioned, the short-term outlook for Europe’s electricity prices is almost impossible to judge right now. Neither can we predict with any certainty whether politicians are going to intervene further in the markets, affecting how fast renewable power generation capacities can expand, for example.
Assuming that PV and wind will continue to be built quickly (supported either by subsidies or favorable market conditions), that the phasing down of coal and nuclear continues as scheduled, and the general energy transition progresses, we believe wholesale market prices will decline substantially in the mid-term versus current levels. This would be due to the presence of more renewable energy sources (RES) in the system, reducing the need for low-efficiency thermal plants, and a significantly less tight gas market (with increasing volumes of LNG coming online around 2025) more than compensating for higher carbon costs.
In the long term, factors such as the cost of investment in carbon capture, utilisation and storage and green hydrogen technologies could become a stabilising influence. Nevertheless, as long as Europe is dependent on LNG imports to cover its gas needs, the market will remain dependent on weather, as well as economic and political conditions in Asia and other regions of the world.
Axpo is a major PPA offtaker in Europe. What does electricity price volatility mean for new solar PPA prices and contracts?
The risks associated with PV development through PPAs have not changed; they always existed. However, we are now seeing most of them under an unprecedented spotlight, including factors such as electricity price volatility, regulatory uncertainty, CPI shocks, transportation difficulties, and permitting delays, among others.
PPAs as risk mitigation tools are adapting to this new reality with more flexible approaches to cope with potential delays, more short-term contracts to capture temporary price spikes, floor structures to leave potential price upsides within the project developer, and more structured approaches to capture higher prices, such as baseload hedges instead of traditional pay-as-produced contracts, and more.
PV plants with a PPA business model don’t need subsidies. Considering that electricity prices are high, what limits the growth of this sector?
Current limits include the not-in-my-backyard or the NIMBY social phenomenon, the limitations of electricity grid infrastructure, and sometimes complex, lengthy and bureaucratic approval/permitting processes, although these hurdles are now beginning to be addressed politically.
The PV-PPA market in Spain is probably the most mature in Europe. What can other countries learn from there?
We have seen the Iberian PV-PPA market evolve over a very short period of time. We started with traditional pay-as-produced structures, in which the producer is paid a fixed price for the full production of a power plant. It was an environment where there was little demand for buying power long-term, and PPAs were seen as an alternative to pay-as-produced feed-in-tariffs.
In a more mature market with many different players, we now see more structured PPAs, where risks are not only borne by the off-taker, but also shared between the two parties. It makes a lot of sense, since pay-as-produced contracts provide very limited returns on the investment and are only suitable for very risk-averse investors. Higher ROIs are still achievable in more sophisticated PPA structures with shared risks, which should be suitable for investors with greater market knowledge and experience.
Does the uncertainty of electricity price instability make PPAs more attractive?
It most certainly does. PPAs are risk management tools that enable developers to secure their investments. These contracts are adapting to different investor needs and market views.
JAKARTA – Indonesia, the biggest thermal coal exporter, vowed to subsidise renewable energy projects and open its first nuclear power plant by 2045 in a draft legislation to help it reach its net-zero emissions goal.
The Bill, which still needs approval from President Joko Widodo and Parliament before becoming law, seeks to lead the country on a path that would both ensure all 270 million residents have access to power while also making the country entirely reliant on renewable energy by 2060.
The draft sets out a strategic outline, with more detailed rules to be issued later.
Officials have their work cut out for them, as the nation with the world’s fourth-largest population also has one of the world’s smallest wind and solar power fleets. Indonesia relied on fossil fuels for 86 per cent of its electricity in 2020, according to BloombergNEF.
Here are a few key issues in the latest draft of the Bill, which will soon be discussed by the government:
Export tax
Indonesia will prioritise local demand before allowing renewable energy to be transmitted overseas, with exporters required to pay a tax. The stipulation would follow a ban by nearby Malaysia, and could hamper neighbouring Singapore’s plan to import clean electricity. The focus on domestic use also applies to the coal sector, where miners will have to set aside at least 30 per cent of their output for local consumption at a ceiling price of US$70 (S$96) a tonne for high-quality coal, compared with current global prices around S$400 a tonne.
Funding incentives
The government will give incentives, including tax and administrative ones, to support new projects. It will also subsidise renewable energy when the cost of producing it is unable to compete with fossil fuels. A renewable energy fund will collect money from the state budget, export taxes, carbon trading funds and other sources, then use the cash to build infrastructure, give incentives for developers or to support research.
Nuclear power
Indonesia will set up a nuclear power assembly that will monitor the development and operation of atomic plants. Only state-owned companies would be allowed to build, operate and shut such plants. The country plans to operate its first one in 2045.
Coal reliance
The Bill differentiates between “renewables” – wind, solar, geothermal, hydropower, biomass and a few other small technologies – and “new energy”, which includes nuclear, hydrogen and several coal-based technologies, while carving out room for both to aid in the transition. Indonesia is building its first coal gasification plant that will start operating in 2024.
Local impact
The government seeks to ensure renewable energy investments would benefit surrounding communities. Companies must prioritise the use of local workers as well as domestically sourced materials, while investors are expected to transfer their technology to local workers. Companies must also prevent pollution and have recovery plans in place if their operations lead to environmental damage.
Minister for Sustainability and the Environment Grace Fu highlighted three ways Singapore can accelerate sustainability and climate action. Image: ST FILE
SINGAPORE – The Republic must keep up the international momentum in addressing the threat of climate change amid pressing priorities such as the Covid-19 pandemic, rising inflation and geostrategic challenges, said Minister for Sustainability and the Environment Grace Fu on Tuesday (June 7).
Speaking at the gala dinner of Temasek’s annual sustainability conference – Ecosperity Week – Ms Fu highlighted three ways the nation can accelerate sustainability and climate action.
1. Catalyse action towards inclusive transition
As the carbon tax is progressively raised to $50 to $80 per tonne by 2030, the revenue will support the transition to a greener economy through incentivising low-carbon solutions and cushioning the impact on businesses and households.
Businesses increasingly recognise the opportunities in the circular, low-carbon economy, while the choices of individuals can also play a role, said Ms Fu.
“Individual action may feel insignificant and is indeed insufficient. However, our collective actions will enable us to achieve our ultimate common goals,” she added.
If consumers avoid disposables, buy locally farmed vegetables and fish, and choose energy-efficient appliances, for instance, these choices will create ripple effects that accelerate the development of more sustainable products.
From the middle of next year, large supermarkets will implement a disposable bag charge, which aims to encourage the public to use reusable bags and be more judicious in their use of disposables.
2. Unlock more sustainable solutions
Technologies and solutions to decarbonise still remain out of reach or are not yet commercially viable, but industry collaborations can bring about new solutions, said Ms Fu.
Last month, Singapore joined the First Movers Coalition with eight other nations, which will allow companies to harness purchasing power and supply chains to create early markets for innovative low-carbon technologies.
This serves as a launchpad for them to reach commercial scale and could open doors for local businesses to innovate with like-minded partners.
Ms Fu also cited the Jurong Island Circular Economy study last year, which analysed the energy, water and chemical waste from 51 companies on the island.
The study has provided insights on how to reduce resource use and boost Jurong Island’s competitiveness and sustainability.
A new research institute focusing on how to shrink the carbon footprint of the industrial sector – responsible for about 60 per cent of the country’s total emissions – was also set up on Jurong Island earlier this year.
One focus area of the Institute of Sustainability for Chemicals, Energy and Environment is on reducing or removing planet-warming emissions.
This can be done through carbon capture, utilisation and storage technologies – which aim to capture greenhouse gases released from industrial processes before they reach the atmosphere, and then either convert them into useful substances, such as chemicals or store them underground.
The institute was set up by the Agency for Science, Technology and Research, which is working with industrial partners and other government agencies to study and plan for the development of a carbon capture and utilisation translational test bed on Jurong Island.
3. Specialise in green finance and carbon services
Ms Fu noted that Singapore is highly disadvantaged by its lack of natural renewable energy sources, as it does not have large rivers to draw hydropower or vast lands for wind turbines.
But with its reputation as an international financial hub, it is well placed to support countries with untapped natural renewable energy sources through the trading of carbon credits, she added.
For example, polluting companies can buy carbon credits from a renewable energy plant to offset and compensate for their own emissions.
And with the Article 6 rulebook on international carbon markets finalised at the United Nations Climate Change Conference last year, Singapore can help propel the growth of green finance and carbon services in the region, said Ms Fu.
“This will enable businesses to access the capital they need to innovate, operationalise, and scale their green projects,” she added.
In March, Singapore and Indonesia inked a partnership, where they will collaborate on carbon pricing and markets, and also explore financing solutions in carbon credit projects.
A worker wearing a face mask works on a production line manufacturing bicycle steel rim at a factory, as the country is hit by the novel coronavirus outbreak, in Hangzhou, Zhejiang province, China March 2, 2020. Image: China Daily via REUTERS
SHANGHAI : China is rolling out so-called low carbon transition bonds to help companies become greener, the country’s interbank bond market regulator said on Monday, as Beijing strives toward carbon neutrality.
Under the pilot scheme, companies in eight sectors including electric power, steelmaking, petrochemicals and civil aviation will issue bonds to fund decarbonisation efforts, the National Association of Financial Market Institutional Investors (NAFMII) said in a statement.
Such debt instruments supplement green bonds, and are part of China’s sustainable financing, said NAFMII, which is supervised by China’s central bank.
China, the world’s biggest producer of climate warming greenhouse gas, has pledged to bring its emissions to a peak before 2030 and to become carbon neutral by 2060.
Proceeds from the transition bonds will be used to fund green efforts including cleaner coal production, the application of green technologies and the use of natural gas and clean energy, NAFMII said.
Companies including China Huaneng Group Co, Hualu Holdings and Baosteel have already issued China’s first low carbon transition bonds, the Shanghai Securities News reported on Monday.
SINGAPORE – Singapore’s investment company, Temasek, announced on Monday (June 6) the launch of a green investment firm to accelerate global efforts to cut carbon emissions and fight climate change, with an initial pledge of $5 billion.
GenZero, wholly owned by Temasek, aims to deploy long-term and flexible capital to help early-stage companies and technology solutions that need funding to grow towards commercialisation, as well as more mature opportunities that are ready to scale up.
Its investments seek to help the world achieve net-zero greenhouse gas emissions by 2050 and limit global warming to 1.5 deg C above pre-industrial levels, key goals of the United Nations’ Paris Agreement, the world’s main climate pact.
Temasek’s chief sustainability officer Steve Howard said that because decarbonisation is now a specialist investment discipline, the introduction of a platform like GenZero is well placed.
“You can be very alarmist when you talk about climate, so actually it is appropriate for us to ring the bell loudly and say it is on our watch that we have to tackle this,” said Dr Howard, adding that carbon no longer existed on the periphery of the economy but has now become internalised for most companies actively evaluating how they will transition towards net zero.
“This is not about incremental change, it is about transitioning every business and every investment decision. It has been described as the race of our lives and I really see it as that…. and we have to be the generation that leads that change.”
GenZero will be headed up by Mr Frederick Teo, who is currently managing director of sustainable solutions at Temasek International. Mr Teo will assume the role of chief executive from July 1.
Mr Teo, who has been at Temasek for nearly 12 years holding various leadership positions, said GenZero’s investments will focus on three areas.
It will fund technology-based solutions that deliver deep emissions reductions, such as carbon capture, utilisation and storage and advanced biofuels; nature-based solutions that help protect and restore natural ecosystems while benefiting local communities and biodiversity; and investment in companies and solutions that support the development of an efficient and credible carbon market.
He added that while GenZero has a broader, more flexible investment mandate, the company will still be seeking sustainable returns on investments made.
“Clearly we are not going to be investing in solutions that are currently in the lab and not yet ready or if we cannot see a pathway to climate impact,” Mr Teo said.
“We are also looking at solutions that have the potential to scale, because if there is something that works really great but cannot be deployed at scale, it will not be able to create the kind of climate impact that we seek to achieve.”
(From left) SGTraDex CEO Antoine Cadoux, IMDA chief Lew Chuen Hong, Communications and Information Minister Josephine Teo, Trafigura’s Asia-Pacific CEO Tan Chin Hwee and MTI Permanent Secretary (Development) Lee Chuan Teck. Image: ST PHOTO/Ong Wee Jin
SINGAPORE – A data sharing platform used in the logistics sector is being expanded with new applications, including one that will digitalise the certification process for sustainable trade financing in the construction sector.
The upgrades will also make it easier to pinpoint the causes of shipping delays and reduce the associated costs, known as demurrage, as well as increase transparency in the procurement of ship supplies and spare parts.
The expansion of what is known as the Singapore Trade Data Exchange (SGTraDex) was announced at the Asia Tech x Singapore (ATxSG) event on Wednesday (June 1) organised by the Infocomm Media Development Authority (IMDA).
SGTraDex is designed to reduce long-standing supply chain inefficiencies, including a heavy reliance on manual, paper-based processes that undermine efficiency, transparency and sustainability.
It works by enabling regulatory, logistics and trade financing data to be shared, which in turn helps supply chain players optimise cargo handling and operations and builds confidence in trade financing.
The platform was first announced at last year’s ATxSG event and has since been piloted with three initial uses: strengthening the financing integrity of trade flows; enhancing end-to-end visibility of container logistics flows; and digitalising the bunkering or ship fuel supply industry.
More than 70 participants, from small-and-medium-sized enterprises to multinational corporations, have signed up to use SGTraDex, including Standard Chartered bank, commodity trader Trafigura, shipping company Pacific International Lines and energy giant ExxonMobil.
Communications and Information Minister Josephine Teo, who announced the SGTraDex upgrade, told the ATxSG event on Wednesday that the three use cases in operation now are expected to capture about $100 million worth of value by 2026, including time and manpower cost savings, a figure that will grow as more participants come on board.
Equatorial Marine Fuel Management Services, a major local player in the bunkering sector, has benefited from SGTraDex.
Mr Choong Sheen Mao, a director, said about one-third of Equatorial’s vessels are “SGTraDex-ready” and have been fitted with sensors that capture data such as the volume of fuel being transferred through flow meters approved by the Maritime Port Authority of Singapore.
“When you have that enforcement, people trust what is being measured by the flow meters on board,” he said.
“The next step is to connect the flow meters to data loggers in order to remit the information to the cloud, and make sure the data flow is secured and trusted.”
This data can be immediately shared securely with clients and other parties like banks and financiers through SGTraDex.
Previously, the process would involve paper documents that needed to be manually checked against the meters, reviewed and audited for accuracy.
Equatorial estimates that it is saving about 50,000 man-hours a year after moving such functions to SGTraDex.
Mr Choong added that his company is also interested in exploring the possibility of tapping SGTraDex for green financing and procurement of ship supplies once the new applications are implemented.
