NG WAI CHOONG Well, in this year’s SIEW, it is an occasion for us to reflect on the fundamental changes happening in the energy sector, and to explore how we can work together in the transition towards a better energy future. We are privileged to have Singapore’s deputy prime minister, Mr Teo Chee Hean, to deliver the Singapore Energy Lecture, our signature event, the Singapore Energy Summit, will have three sessions focusing on rethinking energy, the outlook for oil and gas, and integrating renewables. It will feature several ministers from the region. We also have the heads of both the International Energy Agency and the International Renewable Energy Agency, as well as captains of the industry, like the president of JERA, to address the audience. Another highlight for SIEW 2017 is the inaugural Singapore IEA forum, which will focus on energy infrastructure investments in Asia.
MATHIAS STECK That’s indeed, a very impressive line-up, Wai Choong. But besides you, could you share with me in what other ways is Singapore involved in the global energy conversation, as well as cross-border collaborations?
NG WAI CHOONG Well, Singapore participates very actively in international forums, such as ASEAN, APEC and the G20. These corporation platforms provide avenues for countries to exchange views and learn from one another, as well as to work together on concrete projects like capacity building.
NG WAI CHOONG I was recently in Manila for the ASEAN energy minister’s meeting. ASEAN’s focus is to enhance energy connectivity and market integration, as well as to meet growing energy needs by building a resilient energy community in the region. Under the ASEAN plan of action for energy cooperation, member states have agreed to the collective aspirational targets of a 20% reduction in energy intensity by 2020, as well as having renewables account for 23% of ASEAN’s energy mix by 2025.
NG WAI CHOONG There were very good discussions on how ASEAN can better cooperate on LNG, which will be an important transition fuel, including on small-scale LNG. The ministers also talked about the potential of micro-grids to improve energy excess in the region. Singapore would be the ASEAN chair next year, and we hope to capitalize further initiatives to support the plan of action. Besides participating in multilateral forums, Singapore also works closely with key energy international organisations, like the IEA and IRENA.
NG WAI CHOONG So, for example, Singapore joined the IEA as an association country in October last year. We are partnering with the IEA on two key initiatives, the Singapore IEA training hub and the Singapore IEA forum which will be featured in SIEW. These initiatives serve to foster regional cooperation to create a cleaner and sustainable future.
MATHIAS STECK Wai Choong, how does this year’s SIEW theme – Rethinking Energy, Navigating Change – reflect the state of the global energy landscape, which is definitely going through a huge transition, these days?
NG WAI CHOONG Yes, I fully agree, the energy sector is indeed in a period of transition. Shale oil and gas have been a game-changer. While oil and gas demand and supply imbalances continue to weigh down prices, the sustained decline in upstream investments could lead to sharp corrections in the future.
NG WAI CHOONG The adoption of renewables has continued to grow strongly as prices fall and performance improves. Energy storage systems are, similarly, becoming more viable as technology advances and economies of scale kick in. Grids are becoming smarter too, with IoT, big data and advanced metering infrastructure. Against that backdrop, the tenth edition of SIEW will reflect on the implications of these shifts, and how we can seize the opportunities and address the challenges that this energy transition brings.
MATHIAS STECK So looking a bit more specifically on our region, here, what does this energy transition mean for Asia?
NG WAI CHOONG Asia’s economy is set to expand in the coming years, and energy demand is expected to rise. To meet this energy demand and realize our economic future, it will be important for the region to have access to affordable and sustainable generation sources.
NG WAI CHOONG This will require forward-looking energy policies, innovative energy solutions, capacity building, and a conducive regulatory environment to capitalize private-sector energy investments. Specifically for Singapore, our energy sector is also evolving as we make the transition to become more sustainable, more secure, and smarter.
NG WAI CHOONG We have put in place flexible policies to respond to market developments and progressively opened up our energy market to promote competition. For example, our electricity retail market will be fully liberalized in the second half of next year. We also seek to accelerate the deployment of solar PV. At the same time, we are capitalizing research and development to increase our energy options, reduce carbon emissions and enhance energy efficiency.
NG WAI CHOONG We’re also working towards advancing the digitalization of our energy system for better optimization. These will require the energy industry and work force to build up the necessary capabilities. This is something that we are also working on with the industry and the union.
MATHIAS STECK So coming back to this very successful event we are at right now, with many experts – international experts – offering their opinions and their outlook, what role does SIEW play in the energy conversation?
NG WAI CHOONG One of our key objectives at SIEW is to facilitate discussions on our most pressing energy issues. Over the ten years since SIEW began, it has evolved into a premier energy event that fosters stronger collaboration and knowledge exchange in the energy sector. Beyond high-quality conferences, exhibitions and roundtables, there are also receptions to foster networking.
NG WAI CHOONG The strength of SIEW is the ability to bring together people from the public and private sectors, energy international organizations, think-tanks and financial institutions to look at energy issues holistically - from strategic perspectives to deep-diving into specific technical aspects. SIEW is also able to draw an international crowd with good diversity.
MATHIAS STECK So, Wai Choong, for my last question, I would like to look a little bit into the future and I would like to explore with you what is Singapore’s approach to achieving a sustainable energy future?
NG WAI CHOONG Well, Singapore is alternative energy disadvantaged. We have no hydro or geothermal resources, and wind speeds are low. So, solar energy is the primary source of renewable energy for Singapore, and we are keen to promote its adoption.
NG WAI CHOONG Our approach to do so can be summarized into four Rs. The first R is right pricing. We do not subsidize energy consumption – certainly not for fossil fuels, but not even for renewables. Instead, we believe in pricing energy right to incentivize efficient use of energy. We, thus, do not provide feed-in tariffs to encourage renewable energy. However, the government intends to implement a carbon tax of ten to 20 Singapore dollars per ton of CO2 from 2019.
NG WAI CHOONG A carbon tax will reflect the negative externality that fossil fuels impose on the environment. Solar energy, being emissions-free, will not be subject to the carbon tax. This gives solar a leg up. However, we also need to recognize that renewable energy can impose an additional burden on the power system, due to their intermittent nature. For example, solar output can plunge, suddenly, when there’s cloud cover.
NG WAI CHOONG Although individual solar installations tend to be small, but on aggregate, they can impose significant burden on the power system. This cost needs also to be reflected and charged to renewables. Besides being fair, based on a causal-pay principle, charging will also provide an important price signal for the market to come up with efficient solutions, such as energy storage systems, to reduce the intermittency of solar energy.
NG WAI CHOONG The second R is regulation reduction. Many of our rules today are based on the traditional model of large, centralized generators that small, distributed solar installations may find them hard to comply with. We have, thus, streamlined rules to make it easier and faster for solar installations to be connected to the power grid.
NG WAI CHOONG We have also simplified market registration and relaxed metering requirements. In addition, we have made it easy for small consumers to receive payments for selling solar energy to the power grid.
NG WAI CHOONG The third R is raising demand. The public sector is, itself, taking the lead in adopting solar energy to boost demand. The SolarNova programme aggregates demand for solar PV across the public sector. This provides a critical mass that has helped to capitalize the growth of the growth of the local solar PV industry.
NG WAI CHOONG The last R is research and development. The Singapore government partners the industry and the research community to test bed solutions, like energy storage, that will enable us to better manager intermittency cost by renewables. We are also seeking to improve solar forecasting. This is to allow us to accommodate more renewables without affecting system stability and reliability.
NG WAI CHOONG With the four-R framework, solar adoption in Singapore has grown rapidly, although from a small base, quadrupling from 2014 to reach 136-megawatt peak. Although adoption of solar energy in Singapore is not the largest, the fastest, nor the most spectacular, we believe that our four-R approach is the right approach that will be sustainable for the long term.
MATHIAS STECK Time is always passing fast when discussing exciting topics, and so, we have unfortunately already come to the end of this episode. Many thanks, Wai Choong, for your insights and your outlooks, here, directly, from the Singapore International Energy Week. And to the listeners, if you’ve found this interesting, visit www.siew.sg for event information and great content around the theme, Rethinking Energy and Navigating Change. Today’s episode is a one-off special with Singapore’s Energy Market Authority during Singapore International Energy Week. The next series of DNV GL Talks Energy will begin in November.
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