As Singapore moves toward net-zero, people struggle with green energy prices

Despite a majority of Singaporeans expressing interest in transition to cleaner energy, over one third state that they are unable to or unwilling to pay a premium for clean energy. That is according to a report from Accenture.

If the power sector wants to reach net-zero ambitions by 2050, massive investments of around $115 trillion are needed. Much of that will inevitably be passed on to consumers, though it is not clear to what extent average consumers will be able to foot the bill.

The report found that 30% of Singaporean consumers had met significant challenges in paying their energy bills within the last six months. So, despite people often being on board with sustainable energy in theory, affordability is another question.

The investments required to get to net zero by 2050 are immense. Of that $115 trillion that will be needed, $42 trillion will be in transmission and distribution, with $20 trillion in interim fossil fuels and alternative technologies such as carbon capture.

Overall, the yearly investments being made in sustainable energy need to be increased 3.5 times in order to reach the peak amount required. If this level is not reached, there will be significant delays in reaching net zero, which could throw sustainability goals completely off target.

Electricity prices

Residential electricity prices have been on the rise since at least 2022 in many countries around the world. While the energy affordability crisis of the past several years hit Europe the worst, countries in Asia were not totally spared either. Issues like the pandemic, inflation, and geopolitical instability have been felt at a global scale.

Most energy consumers see value in reaching net-zero emissions and a majority of global respondents believed that consumers have a role in the transition. While it was 81% globally that said they believed the energy transition is important, only 46% are willing or able to take on higher costs.

“Driving the energy transition needs rapid and active consumer participation, and consumers do care about it, but affordability is a big concern,” said Paul Carthy, managing director at Accenture

“As Singapore moves closer to achieving her net zero emissions aspiration by 2050, it’s important that energy providers, regulators and the rest of the ecosystem come together to find new approaches that make it easier for consumers to play their part. Building customer-centered business models, along with innovative cost and productivity approaches will be key.”