The Global Energy Landscape, Viewed from Singapore

Experts surveying the global energy landscape
have warned of a challenging future where power demand is set to double by
2030, even as the world grapples with climate change and the urgency to reduce
mounting greenhouse gas emissions.

It is unsurprising, therefore, that energy
and energy security have emerged as top concerns for governments worldwide, and
in Singapore – a land-scarce urban nation that is almost completely reliant on
energy imports – this is no exception.

Policymakers on this small island in
Southeast Asia have responded by being flexible and thinking long-term about
the future energy landscape.

A preview by Eco-Business ahead of the
upcoming Singapore International Energy Week (SIEW) held from 31 October to 4
November. Read More

Jenny Marusiak in eco-business.com (20
October 2011):

Experts surveying the global energy landscape
have warned of a challenging future where power demand is set to double by
2030, even as the world grapples with climate change and the urgency to reduce
mounting greenhouse gas emissions.

It is unsurprising, therefore, that energy
and energy security have emerged as top concerns for governments worldwide, and
in Singapore – a land-scarce urban nation that is almost completely reliant on
energy imports – this is no exception.

Policymakers on this small island in
Southeast Asia have responded by being flexible and thinking long-term about
the future energy landscape

The cornerstone of that strategy has been the
liberalisation and diversification of Singapore’s energy market – a process
overseen by a statutory board formed in 2001 known as the Energy Market
Authority (EMA).

In an exclusive interview with Eco-Business
ahead of the upcoming Singapore International Energy Week, EMA chief executive
Chee Hong Tat noted that the liberalisation process has made good progress, but
it had required rapid adaptation on the part of the EMA in its early days.

“Back in 2001, we were only in the early
phase of market deregulation. The newly-formed EMA, which was charged with the
task of overseeing the liberalisation process, faced a steep learning curve,”
said Mr Chee in an email interview.

The EMA studied electricity market models in
other countries, primarily Australia and New Zealand, and developed its own
model that today allows 75 per cent of Singapore’s electricity demand to be met
through competitive markets.

Since the EMA was established, Singapore’s
reliance on fuel oil for electricity has decreased from 75 per cent in 2000 to
15 per cent in 2009. Oil has been replaced largely by natural gas, which is
cheaper and cleaner than fuel oil. Today, Singapore generates about 80 per cent
of its electricity from natural gas.

Currently, all of Singapore’s natural gas
supply is piped in from its neighbours Malaysia and Indonesia. This will change
with the completion of the Republic’s first liquefied natural gas (LNG)
terminal in 2013.

LNG is natural gas that is compressed to a
fraction of its original volume, which enables it to be easily transported
around the world, supplying countries with another source of energy.

Mr Chee noted that the need to protect
against supply disruptions prompted the government’s 2009 decision to develop
the LNG terminal and diversify its fuel mix. “It will enable Singapore to
broaden its access to fuel sources from around the world,” he explained.

Now that its LNG facility will soon be
completed, the EMA will have to focus on securing a steady supply of the fuel,
he said. The agency is currently studying its options for obtaining LNG from
reliable sources at competitive prices and will launch a consultation exercise
next year for the industry.

Even while putting considerable efforts into
LNG energy supplies, the EMA recognises the need for other solutions to ensure energy
security.

“Unfortunately, there is no silver bullet,”
said Mr Chee, adding that energy security has become an increasingly complex
challenge in light of the twin issues of declining fossil fuel supplies and
climate change.

Clean and sustainable energy

Mr Chee shared that the key to energy
security is obtaining energy that is competitively priced, diversified and
widely available, but that it must be clean and sustainable too.

While Singapore does not have significant
renewable energy options such as hydro-power, wind, wave or sufficient land for
mass solar energy production, it has not ruled out such possibilities, said Mr
Chee.

“We recognise that technology is changing,
and energy solutions that are not feasible for Singapore today may become
viable in future,” he said.

With this in mind, the EMA has committed to
working with industry players, research institutions and other government agencies
to explore new energy options for Singapore. It aims to position Singapore as a
“living lab” for public-private partnerships, or joint ventures between companies
and government agencies.

Under the living lab concept, Singapore’s
agencies give companies the chance to carry out the development, testing and
commercialisation of clean technology solutions in a real-life, highly
urbanised setting.

Goh
Chee Kiong, who is director of cleantech for Singapore’s Economic Development
Board (EDB) – one of the government agencies that helps develop the public
private partnerships for the living lab concept – told Eco-Business that the
living lab approach gives Singapore an advantage in attracting global companies
from the energy industry.

“Already we are seeing the growth of the
clean energy ecosystem in Singapore,” he said, noting that projects such as
Singapore’s Punggol Eco-Town project – a district-level green building project
involving EDB, the EMA and Singapore’s Housing and Development Board – has
attracted companies such as the Japanese electronics firm Panasonic.

In August, the three local agencies inked a
public-private partnership with Panasonic to integrate solar technology,
fuel-cell batteries and Home Energy Management Systems (HEMS) into an existing public
housing block.

The project will also contribute data to an
EMA smart grid project called the Intelligent Energy System (IES), which was
started in 2009 to determine how best to prepare Singapore’s electricity demand
and distribution for future energy scenarios that include more renewable energy
sources and electric vehicles.

At the same time that Singapore is exploring
the effects of electric vehicles on smart grids, its agencies are supporting
projects to promote the uptake of electric vehicles. The EMA, EDB and the Land
Transport Authority are working with technology companies Bosch and Greenlots
on trials involving charging infrastructure.

The EMA and the other government agencies
involved in the projects fill the roles of technology partner, talent developer
and sophisticated end-user for the private sector, said Mr Goh, adding that EDB
supports and connects the partnerships between the suppliers and adopters of
innovative sustainable energy solutions.

He noted that Singapore’s business-friendly
policies have also attracted firms in the renewable energy sector. Global wind
energy firms Vestas, DNV and Gamesa have set up R&D centres in Singapore,
and Singapore’s solar energy research institute (SERIS) has partnered with
solar companies such as Norway’s Renewable Energy Corporation (REC) and Chinese
solar manufacturer Trina Solar.

Other solar companies are benefitting from
the recent innovations in Singapore’s nascent solar industry. For example,
Singapore’s first solar leasing agreement was announced last month for Punggol
Eco-Town, where the EMA’s smart grid study is paving the way for more
widespread use of alternative energy initiatives.

Under leasing agreements, building owners who
want clean energy without high up-front costs can hire firms such as local
solar manufacturer Sunseap Enterprises to install and maintain solar equipment.
The building owners can then purchase the electricity from the solar company.

Managing
director of Singapore firm Phoenix Solar, Christophe Inglin, told Eco-Business
that Singapore agencies have been open to leasing schemes and other initiatives
such as allowing commercial properties to feed extra renewable energy they
produce into the national grid. They also reward building developers who
incorporate clean energy technology into buildings by granting higher green
building ratings.

That flexibility has helped the solar
industry’s recent growth here, he said, but the Government’s primary influence
has been its determination not to distort the electricity market to provide
artificially low power costs to businesses and households.

“Singapore has been in resolute in not subsidising
electricity,” he said.

Mr Inglin noted that while this has meant
that the industry could not rely on the incentives that support the solar
industries in parts of Europe, it has led to higher retail electricity rates.
The result, he explained, is that as the cost of producing solar energy gets
lower, it is becoming commercially viable in Singapore ahead of other markets.

Meanwhile, EMA’s Mr Chee said that the EMA
will continue to invest in new energy research to enhance Singapore’s energy
security, widen its range of energy options, improve energy efficiency and
lower its carbon emissions.

All these issues will be among the topics
discussed at the EMA-sponsored Singapore International Energy Week (SIEW) held
from 31 October to 4 November. The event, now in its fourth year, gathers
policy-makers, energy experts and industry leaders to exchange ideas that
promote long-term global energy security.

It will feature keynote speaker Nobuo Tanaka,
former executive director of the International Energy Agency, who will share
his views on the current energy challenges facing the world when he delivers
the Singapore Energy Lecture.

Other highlights of the week will include the
Singapore Energy Summit, a high-level discussion on international energy
policy, and a number of concurrent conferences on renewable and conventional
forms of energy, smart grids, and energy and carbon trading.

The event, which has attracted more than
14,000 participants from more than 60 countries in previous years, will also
feature speakers such as Royal Dutch Shell chief executive Peter Voser, GE
Energy smart grid solutions project global director Bartosz Wojszczyk, and the Asian
Development Bank director of sustainable infrastructure Gil-Hong Kim.

Mr Chee said that the EMA was hosting the
event to contribute to the global debate required to reshape the energy
landscape for a more sustainable future.

He noted that to succeed, closer
collaboration between the private and public sectors was needed to share
innovations and expertise.

“No single country will have all the answers
to tackle energy and climate change challenges,” he said.

Source: www.eco-business.com