Power Generation & Clean Energy

An Expert's View about Energy in Singapore

Posted on: 28 Nov 2011

Summary

Singapore plans to increase its domestic energy industry output from US$15 billion to around US$25 billion over the next five years. The government is currently researching the feasibility of nuclear power in Singapore. American suppliers to the electricity, gas, nuclear, clean energy and district cooling sectors will find additional export opportunities in the Singapore market as well as other markets in Southeast Asia. Singapore is a crossroads for American firms looking to export to Singapore and the region.

Market Demand

Singapore is roughly the size of suburban Washington D.C. and its five million people enjoy one of the highest standards of living in the world with a per capita GDP second to only Japan in Asia. Per capita annual energy consumption is among the top 20 globally. Singapore’s goal of sustaining 3-5 percent economic growth and maintaining the manufacturing sector’s 25 percent contribution to the economy annually are a result of robust growth in Foreign Direct Investment (FDI), industrial construction and reliable power generation.

Singapore does not have any natural resources and relies on trade to drive economic growth. The power industry plays a significant role in the development of the Singapore economy. With one of the best transshipment systems in Asia, Singapore is expected to hit more than US$500 billion worth of accumulated FDI in 2001. More than 7,000 multinational companies (MNCs) of which close to 1,600 are from the U.S. have a presence in Singapore. Many have also established their regional headquarters here.

The manufacturing sector is dominated by electronics, petrochemicals, pharmaceuticals and engineering support services. MNCs account for almost 70 percent of manufacturing output, with slightly more than a quarter from the electronics sector. Singapore is one of the world’s leading pharmaceutical manufacturing centers and is the third largest refining center globally after Houston and Rotterdam. Similarly, Singapore aims to become a regional hub by 2013 for natural gas – as such, a US$500 million liquefied natural gas (LNG) receiving terminal is currently under construction.

In recent years, Singapore has started to look into diversifying its energy sources. Alternative and renewable energy sources such as solar, wind and biofuels are being evaluated. With rising energy prices, Singapore is also contemplating nuclear power options in the long term. Energy efficiency and sustainability are important considerations.

Generation Sector

When the energy market was first liberalized in the mid-90s, ten companies were issued electricity generation licenses. To date, only seven are participating in the energy market as shown in the table below. The authorized generation capacity represents the maximum allowable generation capacity that can be installed by the respective generation companies but also includes capacity yet to be built or commissioned. While some private sector companies in Singapore are looking at biofuels, oil and natural gas will still be the primary sources for Singapore’s energy needs. Most of the generation capacities are contained in either oil or a combination of oil and natural gas thermal generation plants. Natural gas is currently piped in from Malaysia and Indonesia.

Network System

As of July 2011, the electricity network system operates on a frequency of 50 Hz, and consists of the following transmission and distribution assets:

• Underground cable length: 29,000 km

• No. of 400kV substations: 3

• No. of 230kV substations: 15

• No. of 66kV substations: 81

• No. of 22kV substations: 4,343

• No. of 6.6kV substations: 5,223

• Total network asset value: S$7.5 billion (US$6 billion)

System average interruption was reported to be less than two minutes over the past few years.

Clean Energy

Several trends are developing within the power sector that will have a bearing on current and future business opportunities for U.S. companies. Existing utilities which have been privatized will be restructured to meet new challenges posed by a liberalized market. Retailers will offer or bundle a range of products and services to their customers. Power generation companies will diversify their feedstock to improve generation efficiencies and ensure security of supplies. Local utilities will apply their management expertise and investment capital to pursue opportunities in the energy sector outside Singapore.

Singapore recently set up its own energy policy framework involving various government agencies to study the sustainable use of clean energy, to promote the use of alternative energy and to meet international standards in energy use. This framework will also examine issues such as zero energy, energy efficiency and energy savings. As part of an experimental program, Singapore’s Building & Construction Authority (BCA) launched a zero energy building in 2009 to serve as a test bed for energy efficient green technologies. The building is expected to generate as much electricity as it consumes through renewable energy (net energy consumption of zero) annually.

In addition, the Singapore Energy Market Authority (EMA) has launched two experimental energy projects. The first is for clean energy companies to propose plans for an intelligent power grid to be set up on Pulau Ubin, a small island off Singapore with a population of around 100 residents. This will be a test bed for harnessing electricity from a variety of renewable power sources. The second is a pilot project to implement an intelligent energy system that will test smart grid technology equipment and determine how to best integrate other sources of power, such as solar energy, into the main grid. Smart grid is a high-tech network of intelligent meters that communicate with each other and allow consumers to optimize their power use.

Read the full market research report


Posted: 28 November 2011

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