Speech by Minister Chan Chun Sing at the 13th Singapore International Energy Week 2020

26 Oct 2020

“Singapore, A Bright Green Spark for the world”

1. A very good morning. Today is a special day not just because of SIEW. It also marks the resumption of MICE events in Singapore. We are back in business. To all our guests joining us from overseas, a good day to all of you. Thank you very much for being part of this hybrid event in a different format, but the same spirit; that is, for SIEW to be a platform for collaboration and to generate ideas and solutions that will inspire the world, and provide a higher quality living for all of us.

2. Those of you who joined us last year will remember that I shared about the Singapore Energy Story. I said that if water was our main challenge in the last 50 years, energy would be our main challenge in the next 50 years. I also spoke about how we want to green our energy sources – using natural gas and renewables like solar, tapping into regional power grids, and looking for new, low-carbon and emission solutions.

3. Today, I want to share another chapter of our energy story. While it is necessary for us to green our power sources, it is not sufficient. We need to go a bit further to look at how we consume and manage energy. It has been said that urban societies, if well planned, well organised and well executed, can be the most energy and resource efficient way to organise human societies. We believe in that.

4. This is why, while Singapore is known as the little red dot, we also aspire to be a “Bright Green Spark” where our energy generation and our energy management system can be an inspiration to urban societies across the world. We invite you to join us on this journey to not only green our consumption and our production, but also be an inspiration for how urban societies can realise the vision of being the most resource and energy efficient way of organising human societies.

5. To achieve this, we will do three things:

    a) Live Green;
    b) Power Green; and
    c) Design our market structures to encourage green living and green behaviour. 

 

Living Green

6. Let me start with living green. We will have to review the way we consume and produce energy. More importantly, we also have to look at how we provide transport solutions for the next lap of our growth. Big changes start with small steps. To achieve the high-quality lifestyle that we aspire to, let us start by looking at consumption.

Green Consumption

7. One of the things that we will continue doing is to make sure that our urban design is able to incorporate the latest science, technology, and design methods for us to reduce the usage of resources. For instance, how can Singapore, which has a tropical climate leverage natural ventilation for our cooling needs? As I shared last year, if we can reduce the air-conditioning needs, say, of this hall, we will be able to reduce one-third of all the energy consumed for air cooling in this part of the world. We have continued to refresh our designs, incorporating the latest technology like using natural ventilation, solar panels and smart lighting technologies, as well as planting both vertical and horizontal greenery in order to reduce our energy consumption for our living spaces.

8. When it comes to product choices, all of us as consumers also have a role to play. We can choose products that lead to less wastage, or materials that are recycled or are sustainably sourced. In fact, this is a growing market, for the more environmentally conscious population in Asia.

9. Living green is not just a slogan. This is a growing market and there are real market opportunities. Sustainable products will have certificates to assure buyers of their origin and the production methods. We can also electrify our cooking and heating, which can give us higher energy efficiency, allow us to control the emissions that come with it, and reduce overall costs.

10. Finally, one of the important things that we want to do in Singapore is to close the consumption chain and make sure that nothing goes to waste. We will close the resource loop, by turning waste into reusable materials. This includes construction materials that we use for our houses and for our roads. In fact, we are working on converting plastics to pyrolysis oil, or what we call NEW-Oil. Our aim is to maximise the recycling of all the materials that we use such that nothing much goes to waste, just like how we have done with water in the past 50 years.

Green Production

11. With technology, there are opportunities for us to relook the way we produce. There are two key technologies that we can leverage. One is digitalisation, which increases the efficiency of what we can achieve with the same amount of resources. The other is additive manufacturing, or what we call 3D printing. Additive manufacturing combined with data digitalisation has the potential to revolutionise the way things are produced and the amount of resources that are required. This is why the Government has rolled out initiatives to support such processes. For example, EDB’s Resource Efficiency Grant for Energy supports industrial facilities in the manufacturing sector to be much more energy efficient. With a combination of digitalisation and additive manufacturing, we can have a much more efficient, lower emissions production system.

Green Transport

12. The third part is transport. There are three aspects of transport that we will be reviewing in the coming years – how we move people, how we move logistics, and how we electrify our transport.

13. First, moving people – COVID-19 has opened up new opportunities for people to meet and collaborate. Singapore, as a small island, can review our entire urban design where we can minimise the need for people to move from place to place, be it for work or play, and increase the quality of interactions. The challenge is to make sure we can do this by optimising the entire transport system from public transport, to last-mile private transport solutions. It is actually a mathematical problem. How do we optimise the movement of our people by time and space to make it much more energy efficient?

14. Second, logistics – There is great opportunity for us, in the next fifty years, to relook how we design our entire logistics system, from where we place the distribution centres to the retail centres, and so forth. In many urban societies, logistics is a huge challenge and a major consumer of energy because of transportation from points A to B, to C.

15. For an island like Singapore, instead of having items zipping across the island before reaching the hands of final consumers, is there a better way for us to organise this such that they travel the shortest distance, at the least congested time, thereby reducing the energy consumption and emissions? This is possible as we relook how we lay out our entire system, from warehouses to retail stores. If any country or city can do this, Singapore must be one of them.

16. We have already said that we intend to phase out the internal combustion engine by 2040. For every internal combustion engine that we phase out and convert to an electric vehicle, we potentially reduce emissions by 50%. That is a huge boost to our efforts to provide a cleaner, higher-quality environment for our people.

17. Fleet Electrification – Beyond the electrification of our transport fleet, we are in consultation with partners to look at the next steps of electrification for the aviation and maritime sectors. These are still nascent ideas but have the potential to revolutionise the way we transport people and goods around the world, and within a city, with much greater efficiency and much lower emissions.

Develop a Green Power system

18. The second part is on how we intend to ‘power green’. To ‘power green’, we will have to relook the way we produce and store energy, and our energy mix. Today, Singapore has one of the cleanest ways to produce energy from fossil fuels. 95% of all our energy production comes from the burning of natural gas. This is a high benchmark, and we can do better.

Green Energy Mix

19. Hydrogen – Hydrogen has tremendous potential as a clean form of energy. We will be combining the use of hydrogen with our existing LNG mix for an even cleaner energy mix for Singapore. The Government has set aside about $50 million to fund low-carbon energy research and test-bed efforts in hydrogen and carbon capture utilisation and storage solutions. We look forward to working closely with the research institutes to bring this about.

20. Australia collaboration – This morning, we signed an MOU with Australia to explore partnerships and opportunities beyond our shores, on how we can drive low-emissions solutions, including hydrogen, Carbon Capture Utilisation and Storage (CCUS) and renewable energy trade. This is a new way for us to look at our energy mix in its totality.

21. Solar - Solar power is probably the most plausible way for us to have a greater proportion of our energy mix from renewable sources. Last year, we announced the 2GWp target for 2030, and this year, notwithstanding COVID-19, we want to frontload the deployment of solar, and try to achieve 1.5 GWp of solar by 2025. The public service sector will take this lead and will catalyse this through public sector initiatives.

Energy Storage

22. With greater reliance on renewable energy sources, other challenges such as intermittency, will arise. Storage will be a key issue that we will need to resolve. I am happy to announce that EMA and Keppel Offshore and Marine have jointly awarded a research grant to a consortium led by Envision Digital on energy storage systems. This will see the deployment of Singapore’s first stacked energy storage system on Keppel’s Floating Living Lab. If successful, it can potentially save 40% of the land intake for a typical energy storage solution.

23. Decentralised grid – With more solar, we will also have a more decentralised grid. It will be quite different from existing grids, where we have producers pumping electrons to the users. Instead, in the next generation, we can envision a situation where consumers can, at certain points in time, be producers of energy, that feed back the electrons into the decentralised grid. To run this decentralised grid and balance it in real time, we will need new technologies. If we can leverage these technologies and work closely with the research community, we will be able to have a new grid architecture for Singapore in the next 50 years, that moves away from a centralised grid to a decentralised one, with dynamic load balancing throughout the day.

Green Energy Production

24. We will continue to make sure that our combined cycle gas turbine, or what we call the CCGT, will become more efficient, and adopt the latest generation of technologies. The CCGTs require large investments, which is why Singapore is keen to see how we can complement this with another generation of smaller gensets, which can be used to meet peak demand and create a more efficient power system overall. We hope that more companies will consider such complementary solutions, over and above the existing CCGTs that they are using. Combined with digitalisation, we can again have a new way of organising our energy production.

25. There is great uncertainty in the next lap of energy demand, not just because of COVID-19. Some of the key drivers of our energy demand for the next lap will include the data centres and the electrification of our transport fleet, over and above today’s demands by the petrochemical plants, semiconductor plants, and other industrial players. Despite these uncertainties, we need to have more agile and flexible solutions in the generation of energy.

Designing Green Market Structures

26. The third part of our plan is to develop green market structures. Let us take a step back and understand why we are doing this. While we would like to continue to encourage and cajole more players to produce more energy efficient solutions, moral suasion can only go that far.

27. We need to ensure that we have the right market structures and incentives to drive the right behaviour in a sustainable way over the long term. Today, we know that for any energy producing plant, we face what economists call the ‘Hog Cycle’ or the “Cattle Cycle”. When times are good, many rush in to invest, exacerbating the overcapacity. When times are not so good, they will withdraw their investments and accentuate the problems of shortage in generation capacity. We must find ways to overcome this in order for us to build a reliable and sustainable energy producing system. These are a few ways that we intend to do this.

Forward Capacity Market

28First, EMA will introduce a Forward Capacity Market (FCM) in the coming year. This will give players greater certainty of the demand over the next few years so that they can build new plants. We will provide more details on the FCM later.

Regional Grid

29. Second, we will strengthen the regional grid architecture. We intend to import 100 megawatts of electricity imports over a trial period of two years. We will test how the market works, and how the technical challenges can be overcome to allow the region to share the clean energy resources that different countries may have. We will start this with Malaysia and we will extend this to other regional players once the concept takes off.

30. LTMS-PIP – We also intend to be a part of the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP). This will be a pathfinder towards the broader ASEAN Power Grid vision and underlines our commitment to advance regional power grids as a solution to decarbonisation in the region.

Right Carbon Pricing

31. Last but not least, we must have the right carbon pricing. Today, we have a carbon tax, which is set at $5 per tonne of greenhouse gas emissions. Having a local price mechanism is necessary, but it is not sufficient. There must be a global carbon price for it to be a fair playing field for everyone, and for us to catalyse action at the global level. This is why Singapore fully supports multilateral efforts under the United Nations Framework Convention on Climate Change to land a global deal on carbon markets. We would like to work with like-minded countries and partners to build a carbon trading market in Singapore. We invite all interested partners, locally and overseas, to work with us to develop this market where we are able to trade with high quality standards, verifiable standards, that provide assurance to both buyers and sellers.

Conclusion

32. Today, we have shared the next page of Singapore’s Energy Story. We have every intention to green our consumption by living green, making our grid more efficient, and wanting to work with like-minded partners to catalyse the global market for more sustainable solutions.

33. You might ask if these plans are still valid in a COVID-19 world. Today is a testimony of our confidence and effort. We, in Singapore, are not going to wait for COVID to pass by and return to the good old days. We have told ourselves that even when COVID passes, we will never move back to a pre-COVID world. Instead of waiting, we are going to start today, by learning to live in a COVID world, and investing in a COVID and a post-COVID world. The plans that we have announced today will not be realised in the next one to two years or even in the next few years. Instead, we have a long-term vision.

34. In the last 50 years, we overcame our water challenge. In the next 50 years, we are determined to overcome our energy challenge. Bit by bit, we will put in place all the building blocks necessary to make sure that Singapore will be a bright green spark; where our solutions, ideas and collaborations can be an inspiration for the world to realise this simple vision. If it is well-executed, well-planned and well-organised, the urban society, even for a country like Singapore without a natural hinterland, can be the most energy and resource efficient way to organise human society, which provides the highest quality of life possible for the same amount of resources consumed.

35. I thank you for being here and invite you to be part of this Singapore Energy Story, so that together we can inspire new solutions for the next level lap of global growth. Thank you very much.

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