Cost pressures threaten Singapore’s 2030 net-zero push

Upgrade costs and competing spending needs are barriers.

Nine in 10 Singapore-listed companies surveyed by Schneider Electric SE plan to increase spending on energy efficiency, but high upfront costs and competing business priorities could delay projects despite a 2030 net-zero deadline.

Energy security was the leading external factor influencing investment decisions, cited by 52%, followed by access to green finance at 42%, and geopolitical uncertainty at 41%, the French energy management and industrial automation company said in a report.

“The challenge is that these investments compete for capital, which is why demonstrating return on investment matters,” Janet Lim, cluster business vice-president for Singapore and Brunei at Schneider Electric, told Singapore Business Review.

Thirty-five percent of respondents surveyed across 14 industries in May cited the cost of energy-efficiency upgrades and other business spending needs as barriers to improving energy resilience.

Lim said companies should establish an energy-use baseline before investing so they could prioritise upgrades and measure savings.

Companies could start with efficient lighting and equipment before adding sensors and energy management systems as savings build, she said. Some companies are delaying investment whilst waiting for cheaper or more effective solutions.

“With energy costs shifting from quarter to quarter, waiting carries its own cost,” Lim said in an emailed reply to questions. “Proven solutions are available now, and many are already cost-effective.”

Amongst companies exploring on-site power generation, 52% cited solar and 46% battery storage as options. Yet 34% of respondents said limited access to technology was a barrier.

Andrew Jasudasen, chief sustainability and sustainable investments officer at CapitaLand Investment Ltd., said available solutions include smart building systems, artificial intelligence tools to reduce energy use, advanced cooling, renewable energy, and building analytics.

The challenge is ensuring these technologies are commercially viable and could deliver measurable savings across large property portfolios, he told Singapore Business Review in an email.

Differences in energy, water, and labour costs also affect whether an investment pays off in different countries.

Thirty-one per cent of respondents in the Schneider Electric study struggled to meet immediate energy needs whilst pursuing longer-term emission cuts.

Jasudasen said property owners should cut emissions whilst keeping costs manageable.

Nearly 90% of respondents have set net-zero targets for their own operations by 2030 or earlier. Amongst those who expect greater focus on resilience to speed up emissions cuts, 74% expect to bring their targets forward by at least three years.

Wider access to scalable low-carbon technology, renewable energy, and sustainable financing could help companies accelerate emission cuts, Jasudasen said.