Singapore to Become a Smart Energy Economy

ESC ReportThe Economic Strategies Committee (ESC) was formed in May 2009 to “develop strategies for Singapore to build capabilities and maximise opportunities as a global city in a new world environment, so as to achieve sustained and inclusive growth.” The ESC is chaired by Tharman Shanmugaratnam, Minister for Finance, and comprises members from the government, the labour movement, the private sector as well as academia.

The ESC submitted the report of its key recommendations to the Prime Minister in Feb 2010. In its report, the ESC highlighted 7 key strategies, one of which is for Singapore to become a Smart Energy Economy. This key strategy was developed by the ESC Sub-Committee on Energy Resilience and Sustainable Growth, which was formed to “recommend strategies to achieve our national energy objectives: economic competitiveness, energy security and environmental sustainability.”

Here are the 5 strategies and 11 recommendations to help Singapore build a Smart Energy Economy: Resilient, Sustainable and Innovative

Strategy 1: Diversifying our Energy Sources

1. Allow entry of new energy options on a market basis

2. Develop renewable energy sources

3. Study the feasibility of the nuclear energy option and develop expertise in nuclear energy technologies

Strategy 2: Enhancing Infrastructure and Systems

4. Invest in critical energy infrastructure ahead of demand

5. Develop Jurong Island as an energy-optimised industrial cluster

Strategy 3: Increasing Energy Efficiency

6. Promote energy efficiency for buildings, industry and in homes

7. Support clean and efficient technologies in transportation

Strategy 4: Strengthening the Green Economy

8. Establish energy as a key national R&D priority

9. Build capabilities for the green economy

10. Apply a green lens to government procurement

Strategy 5: Pricing Energy Right

11. Price energy to reflect its total cost


Here is an overview of the strategies and recommendations for a Smart Energy Economy:

As a small, resource-constrained country, we have to ensure that energy does not become a limiting barrier for Singapore’s economic competitiveness and growth. We also have to play our part in reducing carbon emissions as a responsible member of the global community. We must become a smart energy economy – resilient, sustainable, and innovative in our energy use.

In the medium term, Singapore should explore coal and electricity imports to diversify both the fuel types and fuel source countries in our energy portfolio. The import of electricity is an option which can free up valuable land in Singapore. It could also allow us to tap on the significant renewable energy potential in our region, such as in the form of hydro-electricity or geothermal power.

For the long-term, we must continue supporting innovation and investing in the infrastructure necessary to develop renewable energy. We should also study the feasibility of nuclear energy, a possible option in the long-run to meet baseload electricity demand, as well as energy security and sustainability imperatives. Advances in nuclear technology will make it much safer than earlier designs, and we should carefully study its viability for a small city-state like Singapore.

Push ahead to establish Intelligent Energy Systems (IES) as the centrepiece of a smart energy economy. The IES will promote greater competition among retailers and enable households to make informed choices on their electricity consumption. At the same time, the IES will incorporate devices such as smart meters and home automation networks to programme appliances to function during off-peak hours when electricity prices are lowest.

Make early investments in public goods such as energy infrastructure to improve national energy security and efficiency. One example is the liquefied natural gas (LNG) terminal which will allow Singapore to gain access to global gas markets. Investing in the extension of the gas pipeline infrastructure can also potentially reduce the cost of electricity and open up new economic clusters in Singapore.

Develop Jurong Island as an energy-optimised industrial cluster. We should harness innovative systems-level solutions, to provide integrated, low-cost and low-carbon solutions for the industry clusters on the island. For example, recycling waste heat from industry for desalinating sea water; the desalinated water would then be channelled back to industry for cooling industrial processes, forming a virtuous cycle. With government planning and infrastructure investment to enable such “exchanges”, we can significantly improve resource efficiency.

Step up measures to promote energy efficiency for buildings, industry and in homes. We should enhance incentives, education and adopt essential legislation such as mandatory energy audits which will help build energy conservation know-how and internalise energy management practices.

Support low-carbon solutions in transportation. We should continue the shift of commuter load to public transport and support the introduction of clean and efficient technologies for public buses. This will ensure that energy-efficient public transport can be realised without higher prices for commuters. We should set the appropriate incentives for the adoption of clean vehicle technologies for private vehicles by awarding the Green Vehicle Rebate (GVR) based on fuel efficiency or carbon emissions of the vehicle.

Price energy to reflect its total cost, taking into account various externalities and constraints, such as energy security and environmental sustainability. Appropriate price signals could both promote the use of, as well as encourage investments in energy-efficient and low-carbon solutions.

The Government should study how best to implement a carbon pricing scheme in anticipation of future carbon constraints, should there be a global agreement on climate change. It can also insure us against future spikes in energy prices. This should be carefully calibrated and introduced gradually, with offsets for specific groups like low income households to buffer the transition.

Source: ESC Main Committee Report; ESC Sub-Committee on Ensuring Energy Resilience and Sustainable Growth; ESC Press Release Annex A

Image credit: ESC Report

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