25 Oct 2023

SGFIN was delighted to join the thought provoking conversations at Singapore’s International Energy Week (SIEW), where Dr David Broadstock delivered his keynote address at the Asia Clean Energy Summit, titled Green Hydrogen Leadership Spotlight: Securing a Clean Energy Future, followed by the panel discussion at the Future of the Grid Conference on Energy Transmission and Distribution.

As the Energy Transition Lead for SGFIN, David shared his views on the rising importance of energy security and the evolving geopolitics of energy, stranded assets and state ownership and the complex challenges of financing transition.

While we are at an important inflexion point in our global fight against climate change, evolving geopolitics and weaponisation of energy resources bring forward the need for energy security in parallel with that of urgent climate action. The question now more than ever is how can government intervention really unlock the markets and facilitate the acceleration of energy transition. An important question to keep in view is what colour of hydrogen would make sense to focus on first? While green may be the goal there may be an interim pathway in which other colour grades come first or are developed in tandem, to help achieve critical mass in the market. Transition will be a phased journey, and not an overnight jump into a net-zero world.

SGFIN's Dr. David Broadstock shared his insights on the opportunities for private capital for grid investments in general, and in particular for in country or cross border interconnectors within ASEAN power grids - and how it could improve investment finance structure.

Critical, and especially early stage grid infrastructure will continue to be supported by governments and development banks given the long investment horizon and fundamental economy-wide value for having such infrastructure in place. But there is an important role and increasing opportunities for private partnerships. Realizing these partnerships does however need to keep in view the need to carefully approach how different groups can be brought in to optimize grid efficiency, while fairly distributing financing risks where they can be adequately absorbed if realized.

However there are real challenges to unlocking additional private capital, such as the uncertainty that can negatively affect the appetite of the private sector to participate to the market, in particular within the fragmented Asian markets context. Question of the day is when does it become sensible to step into the transition. Post Covid shut down the notion of what is possible has changed, and previously inconceivable partnerships are emerging- so the answer to this question may be closer than we think.