Summary
Singapore plans to increase its domestic energy industry from US$15 billion to around US$25 billion by 2015. American suppliers to the electricity, gas, clean energy and district cooling sectors will find increasing opportunity in not only the Singapore market, but in other dynamic markets in the region. Singapore is a key entrepot for American firms looking to cover a broader geographical area from one central location.
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 energy consumption is in the top 20 globally. Singapore’s goal of sustaining near double-digit economic growth and maintaining the manufacturing sector’s 25 percent contribution to the economy points to robust growth in Foreign Direct Investment (FDI), industrial construction and power generation and distribution.
Having no natural resources, Singapore has had to rely on trade and FDI to drive economic growth. The reliability of the power industry plays a significant role in the development of the Singapore economy. With one of the best distribution systems in Asia as a contributing factor, Singapore has attracted over US$325 Billion in FDI (2007). Around 7000 multinational companies (MNCs), 1500 of which are from the U.S., have a presence in Singapore and many have 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 after Houston and Rotterdam. Similarly, Singapore aims to become a regional hub by 2013 for natural gas with a US$500 million liquefied natural gas (LNG) receiving terminal online.
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 to see how they can be introduced economically without slowing growth. Energy efficiency and sustainable energy are also important factors.
Generation Sector
When the energy market was first liberalized seven years ago, 10 companies were issued generation licenses, but, to date; only seven are participating in the new energy marketThe 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. Some private sector companies in Singapore are looking at biofuels, however, oil and natural gas will still be the primary fossil fuels which are imported and burned to produce electricity. Most of the generation capacity is either oil or combined oil and natural gas thermal generation plants. Natural gas is piped in either from Malaysia or Indonesia.
Network System
The network system operates on a frequency of 50 Hz, and consists of the following Transmission and Distribution Assets as of March 2009:
• 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$7.2 billion (US$5.2 billion)
System Average Interruption was reported to be less than two minutes over the past two years.
Clean Energy
Several trends are developing within the power sector, which will have a bearing on current and future business opportunities for U.S. companies. Existing utilities which have been privatized will restructure themselves to meet new challenges posed by a liberalized market. Retailers will offer or bundle a range of products and services to their customers. Generators 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 sector outside Singapore.
Singapore recently set up its own energy policy framework involving various government agencies to study the sustainable use of clean energy, promote the use of alternative energy and to meet international standards in energy use. This framework will also look into issues such as Zero Energy, Energy Efficiency and Energy Savings. As part of an experimental program, the Building & Construction Authority (BCA) launched a zero energy building in 2009 to serve as a test bed for energy-efficient green technologies. This building is expected to generate as much electricity as it consumes through renewable energy which works out to a net energy consumption of zero in a year.
In addition, EMA has just 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 which is a small island off Singapore where there is 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 where it will test smart grid technology equipment and also to see how to 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.
All these clean energy initiatives are expected to not only make Singapore clean & green but it will also contribute towards reducing carbon emissions. Singapore has put forward a plan to cut carbon emission by as much as 16 percent by 2020 which is equivalent to 12 million tons. The government has identified four areas where carbon dioxide can be reduced – industry, transportation, buildings and households. Industry would be the most important area as it accounts for more than 50% of the carbon dioxide emissions in the country. A US$18 million Energy Research Development Fund has also been set up to provide financial support for innovative projects in the four areas.
To help reduce carbon dioxide emissions over the next decade apart from getting more car owners to buy hybrid vehicles, there are a number of alternative energy sources that Singapore is considering such as solar power, wind power, fuel cells and biofuels which is a combination of bio-ethanol and biodiesel. There are also a number of energy efficiency incentive schemes and energy efficiency improvement assistant schemes that have been introduced to encourage local companies to carry out energy appraisals so as to implement clean and green technologies.
By CHAN Y K
