Singapore dips toe in nuclear pond

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??This week: Singapore’s daunting decarbonisation challenge lies at the heart of the country’s newly signed nuclear cooperation deal with the US.

This week, the two countries inked a 123 Agreement – named after Section 123 of the US Atomic Energy Act, which governs nuclear cooperation. The deal provides Singapore access to controlled US civil nuclear expertise and technical information for 30 years. The US also has 123 deals in South-east Asia with Indonesia, the Philippines and Vietnam; and in the rest of Asia with China, India, Japan and South Korea.

As part of the deal, Singapore will also join the US Foundational Infrastructure for Responsible Use of Small Modular Reactor Technology (First) programme, which is a US programme to support the development of small modular reactors (SMRs).

Singapore made it clear that it has not made a decision on whether to deploy nuclear energy in Singapore. However, the 123 Agreement will greatly increase Singapore’s ability to assess whether and if it should pursue nuclear power.

In explaining the deal, Singapore stated in a press release: “Singapore is studying all potential options to decarbonise our power sector while maintaining our energy security and cost-competitiveness, as we work towards our target to achieve net-zero emissions by 2050.”

No good options

Singapore’s net-zero-by-2050 goal is nothing short of ambitious, given the country’s natural limitations and its heavy reliance on natural gas to fuel its current electrical production.

The country has been unable to confidently anticipate the energy mix that will allow it to reach net zero, because viability and scale continue to elude the fossil fuel alternatives that are available.

Solar and wind are proven technologies, but they require too much real estate for a land-scarce and immensely densely populated Singapore.

Electricity imports are also proven, but it remains to be seen whether Singapore can negotiate the cross-border agreements required to secure the electricity and its transmission. The first electricity import project, which is to import hydropower generated in Laos through Thailand and Malaysia, has been reported to be in trouble because of difficulties in reaching an agreement on the transmission part of the deal.

Even if the deals can be struck, the difficulties faced by the Laos project underscore the security risks inherent in an overreliance on energy imports. Singapore already has to deal with occasional cross-border spats regarding water imports from Malaysia; electricity imports would involve many more parties, raising the likelihood of disputes and increasing the complexity of resolving them when they arise.

The fundamental science behind green hydrogen – using renewable power to split water into oxygen and hydrogen – is relatively established, but the technical challenges in scaling up production, transport and storage are immense. Green hydrogen remains highly undersupplied and expensive – both aspects are related to each other – and it’s still unclear whether it will be able to reach the scale and price point required in time for Singapore to achieve its net-zero goals.

Other technologies that Singapore is exploring include geothermal energy and carbon capture and storage. Those options are still extremely nascent, making it difficult to commit to them at the moment.

Big upside, big downside

Compared with those alternatives, nuclear fission ticks many boxes. A nuclear plant, especially if SMRs are used, has potentially one of the smallest physical footprints of the low-carbon options, which is great for tiny Singapore. In fact, the footprint of a nuclear plant is magnitudes smaller than that needed for wind or solar, US researchers have found.

Nuclear fission is also a relatively energy-dense technology that is well-developed, so there is more optimism that it can be scaled up to provide a substantial portion of Singapore’s electricity needs in a timely fashion.

Furthermore, nuclear power generation will take place within Singapore’s borders, which could address the energy security issues that exist with electricity imports.

Of course, nuclear power comes with sizable risks and costs as well in terms of safety and waste. Those issues can usually be engineered away, but the price tag for those solutions might be too high for Singapore to pay.

In a policy brief, the Centre for Strategic Energy and Resources (CSER) has argued that South-east Asia should embrace nuclear energy and develop a regional strategy to do so.

The Singapore think tank said that to support nuclear energy development, the region should address cost competitiveness by stopping fossil fuel incentives. Sustainable financing taxonomies – which define what can qualify for sustainable finance – will also need to include nuclear power to improve financing for the projects.

CSER’s call for regional coordination makes sense, since nuclear power carries safety risks that can cross borders. But it’s important that the appropriateness of nuclear power be assessed on a country-by-country level.

Nuclear energy’s safety and waste risks are not trivial. Developing nuclear plants are also costly endeavours. Where safer, cleaner and cheaper options like wind and solar are possible, those should be pursued. Critics of nuclear power have raised concerns that unnecessary nuclear energy strategies can divert resources from greener alternatives.

That is not as big of a concern for Singapore, where the renewable options are inadequate. Exploring nuclear for Singapore is less of a choice and more of a necessity.

??Top ESG reads:

1. Singapore’s Economic Development Board and IETA have launched the Singapore Carbon Market Alliance to help companies access Article 6 carbon credits.
2. Tapping more project finance can help to overcome balance sheet limitations and accelerate the transition of hard-to-abate sectors, says Citi.
3. Indonesia’s coal companies are overlooking their methane emissions and therefore under-estimating their impact on global warming, says London think tank Ember.
4. China’s solar supply glut has taken another victim, with Zhejiang Akcome Photoelectric Technology the latest to declare bankruptcy.
5. Only about 10 per cent of Australia’s listed companies currently provide fully comprehensive climate disclosures with just months to go before mandatory reporting rules kick in.

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