SIEW Opening Remarks By Mr S Iswaran, Minister In The Prime Minister’s Office And Second Minister For Home Affairs And Trade And Industry, At The Singapore International Energy Week 2014

27 Oct 2014

Distinguished Guests
Ladies and Gentlemen

Welcome

A very good morning, and welcome to the Singapore International Energy Week or SIEW 2014.  Now in its 7th year, SIEW is an important platform for energy policymakers, industry players and thought-leaders to discuss energy issues, and exchange views on strategies and solutions.

“Building Energy Connections”

In recent times, we have witnessed significant shifts in the energy sector arising from a veritable surge in technological innovation.  One key innovation has been the success in extracting unconventional gas and oil. The abundant energy resource unlocked by this unconventional energy revolution has profoundly reshaped the future of our global energy mix, altered the balance of competitiveness in the world economy, and affected geopolitical dynamics. In light of these developments, many countries are impelled to reassess their energy policies. 

The other big story is the rise of renewable energy. According to the 2014 BP Statistical Review of World Energy, renewables now account for more than 5% of global power output, and this sector continues to grow robustly. In particular, solar photovoltaic (PV) installations saw at least 38.4GW of new global capacity in 2013, a significant jump from previous years where it hovered around 30 GW. This growth was fuelled, in part, by the significant improvement of solar PV technology in terms of efficiency, size and cost, making it a more viable component of any energy mix. 

Both innovations have been game changers and offer new alternatives even as global energy demand and competition for energy resources continue to grow. Nowhere is the challenge of sourcing for secure, competitively-priced and clean energy more keenly felt than here in Asia, where many countries, including Singapore, seek to meet growing domestic demand in a sustainable way. One measure of this challenge is evident in the EIA International Energy Outlook 2013, which estimates that with global GDP rising by 3.6% per year, world energy use is expected to grow by 56% between 2010 and 2040, with half of that increase attributed to China and India.

Against this backdrop of global energy developments and technological advancements, it is apposite that the theme of this year’s SIEW is “Building Energy Connections”. It emphasizes how integration of energy networks holds the potential to positively shape our energy future and the global quest for sustainability. For example, there have been discussions on establishing an Asian Gas Trading Hub which could benefit Asian gas consumers if it is able to better address regional gas demand and supply fundamentals, while leveraging on global arbitrage opportunities. SIEW continues to provide a platform to build energy connections that can foster collaboration among officials, business leaders and experts, and yield valuable solutions.

To open this year’s SIEW discussion, I would like to share with you some of the strategies and initiatives that Singapore has adopted to make our energy landscape secure, competitive and dynamic.

Diversify our Energy Options

A key plank of our energy strategy is to diversify our energy sources and enhance our access to secure and cost-competitive energy supply.

We support ASEAN’s efforts to strengthen regional energy security through interconnectivity projects such as the Trans ASEAN Gas Pipeline and the ASEAN Power Grid (APG).  Beyond bilateral links, there is much potential for ASEAN countries to explore multilateral interconnections and we are taking steps in this direction.  For instance, under the Lao PDR, Thailand, Malaysia and Singapore Power Integration Project, the four ASEAN countries are embarking on a pilot study.  The study will assess the technical viability of cross border power trade of up to 100MW from Lao PDR to Singapore through existing inter-connections, as well as the policy, regulatory, legal and commercial issues which could affect cross border electricity movement.  This will complement existing efforts towards realising the APG.

Domestically, we are taking steps to expand our liquefied natural gas (LNG) infrastructure.  We currently have three tanks at our LNG terminal on Jurong Island, which commenced operations in May last year.  In August this year, the terminal operator, SLNG, awarded a contract for the 4th tank project to Samsung C&T.  This will raise the terminal’s throughput capacity from the current 6 million tonnes per annum (Mtpa) to around 11 Mtpa by 2017.  In the longer term, the terminal’s capacity can be expanded to 15 Mtpa.  

We have also announced plans to develop a second LNG terminal and are studying potential sites in eastern Singapore.  It will help to ensure that we have sufficient infrastructural capacity to accommodate domestic gas demand and associated activities in the long run. 

Beyond our LNG infrastructure, we have also put in place a competitive process to secure new LNG supplies for Singapore.  Under the Competitive Licensing Framework (CLF), we will import LNG on a tranche-by-tranche basis to meet incremental demand.  EMA has launched a Request for Proposal (RFP) exercise to invite importers to submit proposals to supply Singapore’s next tranche of LNG.  It has elicited strong interest from industry players and we look forward to competitive bids from interested parties.

Access to secure and cost-competitive natural gas supplies is a policy objective shared by many countries, especially in Asia.  And, there will be more opportunities to discuss the underlying drivers of Asia’s gas market, as well as the strategic and commercial challenges faced throughout the region, at the 3rd Gas Asia Summit, which will be held later this week.  The 7th Downstream and Petrochemical Asia conference will also provide an opportunity to consider the impact of global developments, such as the shale gas revolution, on the region’s leading oil and gas, refining and petrochemical industry players.

Notwithstanding our physical and resource limits, Singapore continues to explore other options to further diversify our energy mix.  In particular, our efforts are focused on solar technology and scaling up its deployment, as it is the most viable renewable energy option for Singapore. 

Our government agencies are taking the lead through the SolarNova programme, which aggregates solar demand across government buildings and spaces to yield cost savings from economies of scale.  SolarNova is making good progress and we expect the first aggregated tender to be launched in early 2015.
 
We have also enhanced the regulatory framework to facilitate greater integration of intermittent generation sources (IGS), such as solar, into our energy system.  To ensure that the grid connection process is smooth and expedient, a taskforce comprising EMA and SP PowerGrid has shortened the grid connection process for solar PV installations from 27 to 7 working days, eased administrative requirements imposed on solar PV owners, and developed a one-stop information portal to share know-how on solar licensing and technical requirements.
 
In addition, we are investing in research, development and demonstration (RD&D) to develop innovative, cost-effective solutions to support the integration of intermittent solar energy while maintaining overall grid stability.  For example, the Energy Innovation Programme Office (EIPO) supports competitive R&D projects in smart grids, energy analytics and control systems.  

Energy storage is an emerging area that has the potential to help manage solar intermittency.  As such, EMA will be establishing a new $25 million Energy Storage Programme under the Energy National Innovation Challenge to develop technologies that enhance the overall stability and resilience of the power system.  The funds will support the development and integration of large scale, cost-effective systems for Singapore’s power system.  This will help meet domestic needs as well as generate economic opportunities through the development of exportable solutions and capabilities.
 
In tandem with the growth and adoption of renewable energy, there has been greater interest in the governance and financing of the sector.  There will be opportunities to discuss these issues at Renewables@SIEW, which is hosting a suite of conferences and exhibitions such as the European Union Business Avenues Clean Technologies, Asia Clean Energy Summit and RE@SIEW. 

Fostering Greater Competition in our Electricity Market

Another of our strategies is to progressively increase competition in the retail electricity market so that consumers will have more choice and options to manage their energy cost.

This year, we lowered the contestability threshold in phases for Commercial and Industrial (C&I) consumers from 10 megawatt-hours (MWh) to 8 MWh on 1 April, and then to 4 MWh on 1 October.  This move has benefitted about 15,000 more C&I consumers who can now choose to buy electricity from electricity retailers who offer different pricing plans and packages, as alternatives to the regulated tariff.

To enable even more consumers to benefit from contestability, we will lower the contestability threshold further to 2 MWh on 1 July next year. This will enable an additional 10,000 C&I consumers to be able to negotiate for retail packages at competitive prices.  Our goal is to progressively liberalise the electricity market so that all remaining 1.3 million consumers, from households to businesses, will enjoy the same flexibility and choice.     

Reduce Costs and Enhance Flexibility for Businesses

To enhance our pro-business environment, we have sought to help lower energy and compliance costs for businesses, especially our SMEs.  In that regard, EMA formed a taskforce to review all its rules and licensing requirements with the objective of reducing costs and enhancing flexibility for businesses, without compromising safety standards.
 
Following the review, EMA will be simplifying around 70 of its rules and regulatory requirements so as to streamline information and reporting requirements, and to make the application processes for gas and electricity licensees less onerous.  These changes will benefit not only existing and new electricity and gas licensees, but also many consumers, who will potentially benefit from lower compliance costs and improved service standards.  One enhancement pertains to the application requirements for skilled and experienced mature workers seeking to undertake electrical or gas service work.  EMA will share more details on this and other changes through its industry platforms and communication channels.
 
EMA is also working with Singapore Power to review the rules, requirements and procedures of SP Services and SP PowerGrid which affect businesses, such as the application processes for electricity and gas connections.  The review aims to lower costs and improve service standards for consumers, and provide more choices for businesses, while maintaining a safe and reliable electricity and gas supply.

Develop Manpower Capabilities

Against the backdrop of an ageing workforce, another thrust of our energy strategy is to renew our manpower capacity and capabilities to support the continued growth of the power sector.  To that end, EMA has worked closely with the industry to raise professionalism, develop competencies and provide opportunities for skills upgrading.
 
Last year, the Government accepted the recommendations of the Power Sector Manpower Taskforce (PSMT) led by Mr. Quek Poh Huat, Senior Adviser from Singapore Power.  I am pleased to announce that Singapore Power has taken the lead to implement one of PSMT’s key recommendations, which is to coordinate the training needs for Singapore’s power sector by establishing the Singapore Institute of Power and Gas (SIPG).  The SIPG has the support of all major power industry players who are working together to help shape its curriculum and course offerings. 
 
The aim is to establish SIPG as a centre of excellence in providing training for the power sector.  The SIPG will expand its range of courses over time to include emerging areas such as energy storage, installation and maintenance of solar panels. Beyond Singapore, the SIPG also seeks to eventually train and develop power sector employees from the region.
 
In support of this important initiative, EMA will be co-funding the initial set-up of the SIPG.  EMA has also established a $20 million Energy Training Fund (ETF) to support the training needs of Singaporean workers from the Power Sector, which could potentially include professional development courses offered by SIPG.  This will boost efforts to build a strong Singaporean core of technical professionals with the skills to meet the needs of the power sector.
 
Our capacity building efforts also aim to excite our youth to think about the challenges in the energy sector, and inspire them to consider a career in this exciting space.  One initiative in that context is the event “In Dialogue with Youth”.  It will be held later this week as part of SIEW 2014 and present an opportunity to engage youths from our schools and Institutes of Higher Learning on the challenges and opportunities in the energy sector. 

Conclusion

Energy is a crucial resource to any economy.  I have endeavoured to share with you some of the more recent initiatives in Singapore to diversify our energy sources, foster greater competition in the electricity market, reduce costs and enhance flexibility for businesses, as well as develop our manpower capacity and capabilities. 

These are but some examples of the strategies and solutions that have been adopted around the world, in response to the energy challenges faced by individual countries.  Active discussions among energy professionals, policy-makers and industry players, at the Singapore Energy Summit and the other SIEW events, will enable us to learn from one another, emulate best practice and formulate robust energy policies that underpin the competitiveness and sustainability of our economies.  
 
Thank you once again for joining us at the Singapore International Energy Week. I wish you all a fruitful week ahead.  

 

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