(Picture credit: EMA)

The increase use of natural gas as a feedstock for both power generation and industrial uses is evident. This was shared by Dr Anthony Barker, General Manager of BG Singapore Gas Marketing, during an EMART Asia session. He anticipates a 3 percent growth year-on-year up to 2020, with a large part of this driven by China.

What is driving this growth in natural gas as a fuel for the future? He explained that natural gas has been able to reinvent itself to increase its adoption, substituting coal in power generation in many developed economies as a cleaner and more efficient fuel. Going forward, gas' ability to replace oil in emerging economies for industrial, commercial and residential uses will enhance the former's reputation and drive demand. Hence, the long-term growth of natural gas will be strong.

Asia has recognised the importance of natural gas in driving tomorrow's economies and is positioning itself to meet future demand. This is apparent in the number of LNG import projects that will take place over the next five years. Malaysia, Thailand, Vietnam, the Philippines, Indonesia, Singapore, Sri Lanka and Bangladesh are set to join current Asian incumbents China, India, South Korea, Japan and Taiwan in becoming major LNG players as new LNG import facilities come online.

On the supply side, the situation is a little less clear. Dr Barker shared that the anticipated gas glut from new shale gas discoveries in the Atlantic Basin has yet to materialise. While the BG Group is well-positioned to increase this supply with the announcement of its 3.5Mtpa export project in the Atlantic Basin, the emergence of new markets, combined with events such as the Fukushima nuclear plant disaster, means that demand is outpacing supply and causing LNG markets to tighten.

Focus on Singapore

In Singapore, Dr Barker sees the potential for the development of an LNG trading hub. Singapore's location, shipping experience and availability of financial services makes the city-state ideal as Asia's LNG trading hub in the future.

End users will be able to take advantage of Singapore's LNG Terminal going operational in 2013, by trying to lower average gas prices through the import of spot cargoes, optimising contracted LNG supplies and utilising storage and send out or storage and reload services. Through aggregation, smaller businesses will be able to take advantage of whole cargo trading. The availability of suites of master sales agreements and other LNG transaction agreements will be crucial to enabling LNG trading to take place.

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So what exactly is a gas trading hub? Mr VV Roa, Managing Director of Galway Group Asia, shared recently that this is essentially a pricing point for trades of standardised contracts; similar to the Henry hub in Louisiana.

A trading hub has the ability to affect physical trades, he told audiences at EMART Asia during SIEW 2011. For a successful trading hub to develop there should be significant demand for energy in neighbouring markets to create the infrastructure facilities required for trade to take place.

For infrastructure development, a junction of pipelines has to be in place at an optimal geographical location. In some cases, this may require a strong regulatory system to be present. Both infrastructure development and the necessary regulatory backup help to create sufficient volume and volatility for paper trades to take place when price discovery and contract flexibility are introduced. Read more...

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Professor Andrew Blakers, National Australian University, shared his vision of the Asia Pacific super grid at the PV Asia Pacific Conference. It comprises Australia with the rest of Southeast Asia, and could be operational as early as 2050.

This super grid would obtain its power supply from a number of different renewable sources such as wind, solar PV and solar thermal. Interconnectivity, load management and energy storage would mitigate against the intermittency of these renewable energy sources.

He projected the future demographic growth as well as corresponding projected electricity consumption in respective countries from 2011 to 2050. After assessing land area, population growth patterns, as well as electricity consumption per capita patterns, he emphasised the viability of solar PV and solar thermal as the main source of electricity to the rest of the region.

Prof Blake's feasibility study assumes per capita electricity consumption growth of 3 percent per year together with a population growth of 1 percent per year, and urban transport shifts to electric transportation as well as strong energy conservation efforts.

Why Australia as the base?

His model concludes Australia as the most suitable candidate to supply the rest of Asia Pacific with electricity through the following means:

1. Interconnected grids using HVDC (high-voltage direct-current) transmission cables that minimise transmission and distribution losses
2. Setup of a massive solar farm in Northwest Australia with solar PV/ solar thermal plants
3. Use of local storage (e.g. pumped hydro) to maintain voltage levels throughout the day, while covered pipes and water storage areas minimise evaporation losses

This solar farm in Northwest Australia could potentially generate 2TWh of electricity per day, using only 0.05 percent of the continent's land area of 3,500sq km.

Such a farm in Southeast Asia would require a much larger plot of land. On the other hand, the arid and sunny climate in Northwest Australia brings minimal seasonal variability compared with tropical Southeast Asia with its cloud covers. Furthermore, Australia's cheap abundant land means lower land cost compared with densely-populated Southeast Asia.

The only drawback is the relatively high transmission losses from channelling solar electricity to the Asia-Pacific region via Australia, as well as the slightly different time zones resulting in mismatched generation and consumption.

Nonetheless, the advantages offered by Australia far outweigh its slight disadvantages. Prof Blake concluded that the levelised cost of electricity (LCOE) is $0.12/ kWh, which is considered affordable.

In conclusion, the super grid idea is found to be technically feasible. Costs would be competitive and a super grid would also improve energy security even as we prepare for a carbon-constrained world.

(Picture credit: EMA)

Singapore can become an Asia-Pacific carbon hub as the city-state is a preferred base for carbon activities, with good strategic connectivity to carbon markets and access to excellent financial services, trading, trusted professional services and strong technologies.

This was shared at the Carbon Forum Asia conference where Mr Goh Chee Kiong, Director of Cleantech, a division of the Economic Development Board, said that key ingredients to supporting industry growth in Singapore are technology, markets, capital and talent.

The Singapore government provides strong support for research in clean energy industry, water R&D, green buildings and the National Innovation Challenge on Energy Resilience with a total funding of S$700 million announced so far in 2011. Read more...

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As the Director and CEO of the US Department of Energy's National Renewable Energy Laboratory (NREL), Dr Dan Arvizu sought to share with the audience the NREL's perspective on the role of renewable energy, in particular solar energy, in meeting our future energy and climate change challenges.

Dr Arvizu first highlighted some of the key findings of the Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN) by the Intergovernmental Panel on Climate Change (IPCC). He noted that fossil fuels still dominate the global energy system.

The cost of renewable energy remains higher than current energy prices, but in various settings is already competitive in price compared with traditional energy sources. The report also projected that the technical potential of renewable energy technologies is more than capable of meeting current demands for energy.

Technological challenges

Dr Arvizu then touched on the technological challenges faced by solar power. He noted that there are multiple technology paths being explored at the moment, and that it takes a long time for technologies to move from the laboratory to the marketplace. At current prices, solar energy is competitive only in a few states. But if technological improvements can reduce the cost of solar power to the range of US$1/watt, solar power would achieve grid parity or near grid parity for much of the US.

Lastly, he spoke on how to optimise the role of solar energy. There is a need for a holistic system-level analysis of our energy systems. We have to focus on a more distributed energy system that integrates higher penetration levels of renewable energy. NREL found that the current model of centralised generation produces significant wastage, with a network utilisation rate of just 47 percent. System integration of multiple solar units can also help to address issues of intermittency by reducing the amount of fluctuation of generation.

Dr Arvizu also stressed that changing the way we design our buildings could be a major game-changer in increasing the role of renewable energy in the global energy mix. There should be greater emphasis on integrating renewable energy sources and energy efficiency to building designs right from the start, he said, sharing how NREL was able to create a "net zero energy building" with its new office building, while keeping costs comparable to other structures in the area.