Published on 29 Jun 2022

CNA Explains: How an undersea cable project with Australia could transform Singapore’s renewable energy future

First published online at CNA

A 4,200km undersea cable promises to deliver vast amounts of clean energy to Singapore. (Image: Sun Cable)

SINGAPORE: The company behind a megaproject to deliver up to 15 per cent of Singapore’s energy requirements via a 4,200km undersea cable from northern Australia aims to start construction in 2024.

The project took a step closer to being realised last week, after being deemed investment-ready by Infrastructure Australia, a statutory body that advises the country’s government on key projects of national significance. 

This potentially opens the US$20.7 billion intercontinental cable operation - called the Australia-Asia PowerLink - to investment that could include public funds.

Before construction can begin, all financing documents will need to be signed and prior conditions for the availability of financing will have to be fulfilled.

Sun Cable wants to build the largest solar farm and battery storage facility in the world in Australia’s Northern Territory and send clean power to the regional city of Darwin as well as Singapore. 

“We certainly envisage that this will be the first of many and the need for supply of renewable energy from resource-abundant regions to large growing loads will become more and more intense as years go by,” Sun Cable’s Founder and CEO David Griffin told CNA.

The company is banking on the rapid electrification of Southeast Asian economies and the pursuit of cleaner technologies as countries sharpen their focus on emissions targets to address climate change.

“Electricity is fundamentally a very efficient means of consuming energy relative to alternatives. It's also the easiest way to supply energy in a zero-emissions manner. So both of those issues are critical to the future growth of regional economies,” Mr Griffin said.

“We need that ability to transmit electricity on an intercontinental basis to get from where that resource is abundant to where those large loads are and where they're growing fast. And that's what the evolution of high-voltage direct current submarine cable technology allows,” he added.

It comes as Singapore looks to expand its renewable energy options and moves to import power as a solution to lowering its carbon emissions footprint - it currently generates about 95 per cent of its energy from burning natural gas, a fossil fuel that contributes to global warming. 

This month, for the first time, it began to import renewable energy from abroad, via a Power Integration Project. 

Up to 100MW of energy generated by hydropower projects in Laos is able to be transmitted through existing high voltage cables, via Thailand and Malaysia. This accounts for about 1.5 per cent of Singapore's peak electricity demand in 2020.

It could be the first of several smaller-scale imports that are potential precursors to the bigger ambitions of PowerLink, which aims to be fully operational by 2029. 

It might also smoothen the path for the development of a wider ASEAN power grid, where greater amounts of energy could be transmitted internationally.

Singapore’s options for expanding its own renewable energy industry are limited due to land constraints and geography.

With climate change to contend with and a current goal of “achieving net zero emissions as soon as viable in the second half of the century”, finding alternatives is imperative.

“With the electricity demand set to continue rising, Singapore faces significant challenges relating to both security of supply and reducing carbon dioxide emissions,” said Dr Philip Andrews-Speed, a senior principal fellow at the Energy Studies Institute of the National University of Singapore.

“Capacity of solar power will continue to grow but still only supply a modest share of electricity demand. Potential for geothermal and marine energy exists but is likely to be limited. The option of nuclear power is now on the table, but when and how much is quite uncertain,” he said

“The key uncertainties are timing and cost. As Singapore's carbon price rises, the commercial viability of the Sun Cable project improves.”

Last October, it was announced that the country plans to import 30 per cent of its energy needs from low carbon sources by 2035.

Despite expectations for fast future growth, Singapore does not lack energy capacity. Yet, it can experience extreme fluctuations in commodity prices for its natural gas needs. It is an issue that has been exacerbated by Russia’s invasion of Ukraine. 

Sun Cable’s Mr Griffin said that their offering could provide long-term stable and competitive pricing to power consumers in Singapore.

“I think Singaporeans would be very conscious of the global energy situation with the price of gas. Gas has traditionally been a volatile commodity - that price is heavily impacted by global geopolitical events and that leaves consumers exposed,” he said.

“Obviously, that situation is heightened at the moment. And there's no end in sight to that.”

Professor Subodh Mhaisalkar, the executive director of the Energy Research Institute at Nanyang Technological University said that the global energy crisis has accentuated the need to consider new options and the value proposition of intercontinental energy supply, not just for decarbonisation, but also for energy security.

“Sun Cable is definitely an option that ought to be looked at; with the primary consideration being costs and energy availability and security from a long-term perspective,” he said.

He added: “A detailed techno-economic analysis needs to be carried out to determine if intercontinental supply can be competitive against imports to Singapore from its neighbours.

“Geopolitical considerations will also feature in assessing viability; and technical challenges also need to be addressed, from generation, storage and a transmission perspective.”

Sun Cable still needs the green light to be able to transmit its solar energy in a few years' time. It is optimistic it can reach an agreement with Singapore authorities to be allowed to hook up its power link, but did not disclose when it expected that might happen.

“We’re working with the Energy Market Authority … for them to consider the issue of import licences. And, ultimately, it's their decision about the timing on that process and we're happy to work with their decision-making process,” Mr Griffin said.

The company is also working to reach agreements with Jakarta about the logistics of laying and maintaining its cables in Indonesian waters.

“We're very pleased with how the Indonesian authorities have approached the project. We will be procuring various components for the project from Indonesian manufacturers and we'll also be establishing a significant marine repair base (there),” Mr Griffin said.

Despite being backed by Australia’s two wealthiest men - tech giant Mike Cannon-Brookes and mining magnate Andrew Forrest, there are big financing gaps that still need to be filled. 

There is also expected to be competition to Sun Cable in the form of a cross-border interconnecter and subsea power cable for a large solar farm in the Riau Islands, being developed by EDPR Sunseap APAC.

“This will be one of the most consequential clean energy projects for Singapore and Indonesia,” said its business CEO and co-founder, Frank Phuan.

He said that solar energy has huge potential in Singapore, it just needs to be deployed in creative, innovative ways. 

“For instance, our sea and reservoirs are underutilised for solar systems but have the potential to generate more solar energy as compared to traditional rooftop and ground mounted solar systems.