The future for Singapore’s energy burns bright

The future for Singapore’s energy burns bright

This article was first published on Channel NewsAsia


According to a study by the Sustainable Energy Association of Singapore, solar energy could possibly meet as much as a quarter of Singapore’s energy needs in 2025, said Deputy Prime Minister Teo Chee Hean at the Singapore International Energy Week (SIEW) last week.

However, to reach this figure, solar energy generation would have to double every two years, from generating 140 MWp today to 2 GWp in 2025.

This is possible only if Singapore deploys solar generation technologies more innovatively and efficiently, and overcomes the challenges of limited land and solar intermittency. It also shows how much Singapore’s energy landscape could shift to meet the country’s growing energy needs.

Indeed, the global energy landscape has seen several significant shifts in the past decade, driven by technological advances and geopolitical shifts. Improvements in fracking technology have heralded a boom in unconventional oil and gas production in North America, which has changed the dynamics of the global markets.

Advances in renewable technologies and energy storage have made it more economical for countries to reduce their carbon footprint, even as the Paris Climate Change Agreement provide greater impetus to do so.

These changes present opportunities for policymakers and companies to chart out a pathway for energy that is not only competitive, secure, and sustainable, but can also turn shortcomings into advantages.

This is especially important for Asia where half a billion people still lack access to modern energy services, and where the transition to clean energy will be essential for sustained growth in an increasingly carbon-constrained world.



Singapore is an example of a country that has sought to capitalise on these trends. Since it has no natural resources of its own, Singapore is almost completely reliant on energy import.

Relying on natural gas for 95 per cent of its electricity needs, Singapore previously imported all of its natural gas from Malaysia and Indonesia through pipelines.

However, Singapore is now able to import gas globally through a liquefied natural gas (LNG) terminal constructed in 2013. This has allowed Singapore to benefit from changes in the global gas market, such as the availability of LNG from the US and Australia.

Singapore has also sought to leverage its geographical location to position itself as a regional gas hub that handles LNG trading, bunkering, and small-scale LNG solutions for the region.

Supporting the sector, firms providing technical, legal, financial and consultancy services have also grown, creating a local talent pool in constant demand in the Asia-Pacific region.



Singapore has also sought to improve its energy security and competitiveness by taking advantage of its tropical climate and capitalising on advancements in solar photovoltaic technologies.

The Government is aggregating demand for solar across the public sector to spur demand in the private sector, and has launched the world’s largest floating solar photovoltaic testbed at Tengeh reservoir.

Singapore has also been working to develop expertise in distributed energy grids, which will be able to better incorporate such renewable energy sources while still ensuring that the electricity grid remains stable.



In line with Singapore’s Smart Nation initiative, energy companies in Singapore are now aiming for performance improvement through increasing intelligent remote sensors, demand prediction through data analytics and getting closer to end users and customers through value-added applications.

These initiatives are part of Singapore’s wider effort to invest in and harness technology and innovations to meet our energy challenges and sustainable development objectives.

Under the national Research, Innovation and Enterprise 2020 plan, S$375 million has been set aside for key research, development and deployment initiatives in the energy space, focusing on areas such as solar, energy storage, smart grids, and green buildings.

Singapore has also been active in using market mechanisms to spur competition, innovation, and efficiency.

Since the 1990s, Singapore has gradually liberalised the gas and electricity market by separating segments of natural monopoly, in transmission and distribution for instance, from contestable segments, in generation and retail for instance.

Competition in the liberalised power generation sector has encouraged companies to switch from steam plants powered with fuel oil to more efficient combined cycle gas turbines fuelled by natural gas.

The progressively liberalised retail electricity market has seen more independent electricity retailers offering innovative price plans to cater to consumers’ needs and preferences.

Today, larger consumers who account for about 80 per cent of consumption can choose their electricity retailer.

The Energy Market Authority (EMA) of Singapore has recently announced that from the second half of 2018, all remaining 1.4 million accounts, mainly households, can choose their electricity retailer and enjoy choice, flexibility, as well as more innovative plans, to better suit their different needs.

The key to improving security, competitiveness and sustainability at the same time is to improve energy efficiency. Singapore has thus pursued the improvement of energy efficiency on multiple fronts, including in industry, power generation, buildings and households.

For example, EMA’s Project OptiWatt pilot allows users to better understand their electricity use so that they can shift electricity demand away from its peak periods.

Arising from the project, the Agency for Science, Technology and Research has shifted about 0.3 to 0.4 MW of their electricity load by adjusting the timing of its washers and sterilisers to operate outside the system peak period, and without affecting its operations.

In line with its pledge under the Paris Agreement, Singapore consulted with the industry and announced that it will introduce a carbon tax from 2019 to better reflect the cost of using fossil fuels on the environment.

The carbon tax will provide the price signal for businesses and consumers to reduce emissions. For example, pricing in carbon will shape companies’ decisions to invest in more energy-efficient equipment and technologies at the onset.



Ultimately, the global nature of energy issues means that Singapore must remain plugged into global energy discussions and work with partners around the world.

Standing at the crossroads of Asia and the world, Singapore is well placed to work with countries and companies from the world to contribute towards a more sustainable energy future.

Singapore joined the International Energy Agency (IEA) as an association country last year and will assume the chairmanship for the ASEAN energy track in 2018, where it will continue to play an active role in driving greater energy cooperation and capacity-building initiatives in the region.

During SIEW last week, EMA and the IEA co-organised a forum on energy financing in Asia’s clean energy sector. The forum saw robust discussions among regional energy stakeholders on issues such as digitalisation, energy R&D, and grid transformations.

While energy investments are key to meeting ASEAN’s growing energy needs, ensuring environmental sustainability through cleaner forms of energy remains a priority. As a global financial centre, Singapore can help link ASEAN, its Dialogue Partners, and other stakeholders to facilitate energy investments in the region, while encouraging greater adoption of clean energy.

Singapore’s small size and lack of resources have provided it with the impetus to find innovative and practical solutions to improve the security, competitiveness, and sustainability of its energy supply. It has also learnt from others and adapted best practices for its own circumstances.

In turn, Singapore can serve as an example to other cities and countries on how they can address their own energy challenges.


Contributed by Irving Low is partner and head of Risk Consulting and Markets, and Tim Rockell is director of the Global Energy Institute at KPMG in Singapore. The views expressed are those of the authors.

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