The 5th annual Singapore International Energy Week (SIEW) 2012 starts today and brings together policymakers, energy experts and industry players to discuss energy issues, strategies and solutions. The SIEW 2012 Opening Keynote Address was delivered by Maria van der Hoeven, Executive Director of the International Energy Agency (IEA), who shared her thoughts on Asia and the global energy economy.
Maria highlighted the new reality of risks due to slowing economic growth and geopolitical uncertainties, but there are still positive signs for oil and gas supplies. There is a growing role for Liquefied Natural Gas (LNG) as global LNG trade will increase by one third over 2011-2017, ASEAN countries are looking at LNG imports, and Asia is the second largest gas consuming region. At the moment, there is no trading hub for natural gas in Asia, although Singapore could be a possible gas trading hub with its experience in oil trading.
She also shared that renewable energy and natural gas need to be the primary fuel to meet the energy demand for the ASEAN region, despite the lack of policies in some countries. The costs of renewable energy are falling and the technologies are improving. In addition, energy efficiency is important in improving energy security, and is the most affordable and effective way for countries to reduce energy consumption and emissions.
Singapore Energy Summit Opening Address
At the opening of the Singapore Energy Summit at SIEW, Mr S. Iswaran, Minister in Prime Ministerâ€™s Office, and Second Minister for Home Affairs and Trade and Industry, shared Singapore’s strategies for our energy landscape, including diversifying our fuel sources, increasing competition, enabling consumers to make informed decisions on energy use, and building capabilities.
Consultation for Electricity Futures Market
To foster competition in the electricity market so that prices are kept competitive for consumers, Singapore is considering the introduction of an electricity futures market and will commence a public consultation with the industry and other stakeholders. Mr Iswaran explained that:
By enabling trade in forward electricity products, a futures market will complement Singapore’s wholesale market and yield several benefits. Firstly, independent retailers will be able to participate in the market by purchasing futures contracts and in turn offering competitive packages to consumers. This will increase retail competition and benefit end consumers. Consumers will also be able to hedge their risks by locking in longer-term prices, while generation companies stand to gain by using the futures contracts to hedge against their fuel price and operational risks during plant outages.
Consultation for Introduction of Demand Response
Singapore is looking to allow consumers to make more informed decisions on energy use, and will launch a consultation process to incorporate Demand Response as part of the national electricity market. Mr Iswaran explained that:
Demand Response will allow consumers to participate more actively in the market by curtailing their demand in response to high prices. This can moderate price spikes, lower energy costs, and generate system-wide savings. Consumers who curtail their demand could potentially also share in these system-wide savings and be rewarded for taking action.
Singapore Energy Awards
The Minister also announced the launch of the Singapore Energy Awards to recognise organisations and individuals who have made outstanding contributions to enhance the energy sector’s capabilities and infrastructure and to advance groundbreaking energy innovation.