CLEAN ENERGY FOR ASUSTAINABLE
PLANET
CLEAN ENERGY FOR ASUSTAINABLE
PLANET
Accelerating decarbonisation through clean energy sources
MR RUSSELL THAM
JOINT HEAD, ENTERPRISE
DEVELOPMENT GROUP (SINGAPORE)
HEAD, STRATEGIC DEVELOPMENT
TEMASEK
GLOBAL DEMAND FOR
ENERGY
HAS NEVER BEEN HIGHER.
According to the United Nations, approximately 91 per cent of the global population had access to electricity in 2020, compared to 83 per cent in 2010. Today, in part due to the “green premium”, fossil fuels still supply most of the world’s energy demand as clean energy sources play catch-up. The green premium refers to the cost difference between carbon-emitting products and clean alternatives. Because of the nascency of net zero technologies and economies of scale, novel clean technologies typically cost more, forming a barrier to mass adoption.
The good news is that the green premium has declined significantly in recent years, with solar and wind power becoming the cheapest electricity sources in many markets. However, challenges remain. For instance, there is a gap between market-ready carbon reduction solutions and the necessary capital to accelerate advancements and scale such opportunities. There is also a widening disparity between clean energy production and overall energy demand, as economies reopen and travel resumes in the post‑pandemic world.
Governments, businesses and consumers all have a role to play to support the transition towards net zero: Policies can support the use of green technologies; private capital can catalyse the development and commercialisation of clean energy solutions; and communities can consciously opt for clean energy alternatives. “While there may be some costs in the move towards net zero, we need to collaborate and work together to reap sustainable returns in the longer term for a greener economy, where people and the planet can thrive,” said Mr Russell Tham, Temasek’s joint head of the enterprise development group in Singapore and head of strategic development.
Temasek is keenly aware of the growing demand for clean energy solutions today, and invests in clean energy innovations and solutions to mitigate challenges around clean energy adoption and readiness. “It is vital that we direct investments towards sustainable projects and activities in a comprehensive yet cohesive way as we transition to a green economy,” Mr Tham said. “There are no returns on a dead planet.”
GENERATING IMPACT AT SCALE
However, efforts to develop sustainable solutions often require long gestation periods and heavy capital investments over years to achieve scale. This is where Temasek comes in. As a long-term investor, the company is committed to deploying catalytic capital to accelerate technological innovation and development in the clean energy sector. “Over the years, we have increasingly backed novel technology companies with promising disruptive decarbonisation solutions and the potential to scale, so we can advance our collective efforts towards a net zero future,” explained Mr Tham. “We will continue to seek opportunities in the space as and when they become feasible, and spur the development of new technologies where possible.”
In line with this commitment, Temasek has invested in a company specialising in carbon emissions reduction technology, which covers green hydrogen, green ammonia, green methanol, blue hydrogen, circular plastic and renewable fuels. That company recently reported enabling its customers to reduce greenhouse gas emissions by 16 million tonnes, equivalent to the annual electricity consumption of about 8.89 million four-room HDB households in Singapore.
Temasek also worked with utilities provider SP Group to implement a district cooling system in Tampines Central, supplying air-conditioning in an energy-efficient manner to buildings. The buildings receive chilled water from a centralised cooling plant through an underground network of insulated pipes. This was carried out after a feasibility study conducted by Temasek and SP Group – and supported by Tampines GRC and the Ministry of Sustainability and the Environment – which saw a 17 per cent savings in electricity consumption, an 18 per cent reduction in carbon emissions, and monetary benefits for existing buildings while providing cool comfort.
“We need radical action and collaboration to avoid the worst effects of climate change on humanity.”
Besides making climate-aligned investments directly and embarking on carbon-light projects, Temasek works with partners to accelerate future decarbonisation solutions, too. This includes launching Pentagreen Capital, a sustainable debt financing platform, in partnership with HSBC Holdings, the holding company of the British bank. The platform catalyses financing for marginally bankable clean infrastructure projects in Southeast Asia. Temasek also formed Decarbonization Partners together with global institutional investor BlackRock to invest in companies and proven climate avoidance solutions. It also invested in Select Fund, under Bill Gates’ energy venture fund Breakthrough Energy Ventures, to scale late-stage clean-tech startups and build new facilities in key markets including Asia.
Beyond partnerships, Temasek aims to develop its own capabilities and platforms to enable decarbonisation. In 2022, it set up GenZero, a wholly owned investment company designed to accelerate decarbonisation globally through investments in nature- and technology-based solutions and carbon ecosystem enablers.
“We need radical action and collaboration to avoid the worst effects of climate change on humanity.”
“As decarbonisation gains
momentum through
disruptive technologies
and collaborative efforts,
we can all contribute to
a cleaner, more
sustainable future.”
SHAPING TOMORROW, TOGETHER
To further accelerate the change that is needed, Temasek is intensifying its efforts by working with its existing portfolio companies on their green transitions. In so-called “hard-to-abate” sectors, such as transportation and the built environment, the company acts as a catalyst of change by bringing together relevant stakeholders and committing capital to support the trial and development of innovative solutions.
For instance, Temasek worked with Singapore Airlines and the Civil Aviation Authority of Singapore to pilot the use of sustainable aviation fuel at Changi Airport. The programme aims to accelerate decarbonisation in the global aviation sector, which is projected to cut carbon dioxide emissions by 2,500 tonnes.
Temasek also engages with its diverse base of stakeholders to build business and community resilience and social progress. “We need to forge new, connected partnerships that enable impactful actions, to mitigate the worst effects of climate change on humanity,” Mr Tham remarked. One such engagement is Temasek’s annual Ecosperity conference, which promotes the twinning of ecology and prosperity for sustainable growth. It brings together key decision makers, such as business leaders, policymakers, investors and civil society, to share insights and best practices on sustainable development.
“The path to decarbonisation may not be easy, but as the industry gains momentum through disruptive technologies and collaborative efforts from governments, investors, infrastructure developers and communities, we can all contribute to a cleaner and more sustainable future,” said Mr Tham. Looking ahead, Temasek envisions a world where businesses and communities come together to transition to cleaner energy sources while addressing social and community concerns. “Decarbonisation will require new and interconnected paradigms in innovation, financing and partnerships with a wide range of stakeholders,” said Mr Tham. “Temasek seeks to play a catalytic role in all three paradigms with like-minded partners, so that current and future generations can enjoy a more sustainable and vibrant future.”
