Key Points from the Singapore Energy Summit 2012
By Cheng Zhi Wei
The Singapore Energy Summit 2012, held during the Singapore International Energy Week 2012, is a high-level dialogue that brings together distinguished speakers from various governments, companies and non-government organizations to discuss and share their opinions on energy issues.
This year’s Summit consists of 3 Panel Discussions and a Plenary discussion on various topics such as future energy options, energy financing, climate change and the interconnection between energy, water and food. This article will be highlighting several overarching key points that were raised by many speakers across the different panels, highlighting their importance to our future energy landscape.
Importance of Energy Efficiency
One common point highlighted was that energy efficiency should not be overlooked in our bid to make our energy mix more sustainable. Mr Jose Maria Figueres, President of the Carbon War Room, calls it the “most cost efficient renewable source”, referring to the fact that many energy saving measures can be implemented at relatively low costs compared to switching to more renewable sources of generating electricity. This was also echoed by Ms Eileen Claussen, President for the Centre for Climate and Energy Solutions, who feels that energy efficiency is a key to managing how we use energy.
Moving forward, it is important that governments, businesses and consumers constantly evaluate whether they are using energy as efficiently as possible (getting the most work done while using the least energy) and if not, see how they can improve their energy efficiency. As technology progresses, new products and processes will allow us to be more efficient than before. Thus, there is a need to be flexible to change and to keep a lookout for these opportunities.
The Need for Government, Consumer and Industry Cooperation
It is commonly accepted that governments can heavily influence the energy industry through various policy measures and incentives. However, without support from the industries and citizens, it will still be difficult to meet any long-term objectives. Thus, speakers called for governments to have the political leadership to set forward-looking policies on energy while also looking to develop capital markets that can take over the initiative to finance the large-scale, long-term investments needed.
Mr Michael T Eckhart, Managing Director and Global Head of Environmental Finance at Citigroup, commented that he believed we are “40 years into a 100-year transition”, underlining the need for stable, long-term finance that would be able to see the transition to its end. Thus, while governments need to support the renewable energy industry, they do not possess the financial means to see it through completion and they need to let the private sector take the driving seat. He called for more focus on the policy framework that would directly attract private investment, rather than making the investment themselves.
Consumers also play an important role in supporting the transition. Besides consuming energy more efficiently or installing their own renewable energy systems, consumers play a big role in supporting companies and governments that are proactive in fighting climate change through managing their energy use or investing in renewables. Their behavior will determine whether or not governments and companies take action to change their own behavior.
An example is the traditional American craving for big, gas-guzzling cars. Because of this consumer demand, car companies in America like Ford designed and manufactured cars that were highly inefficient. In the other countries such as Japan where fuel efficiency was highly rated, such inefficient car models were nowhere to be seen and companies like Toyota do not even manufacture such models.
Thus, we can see that multi-party cooperation is needed for the changes we need to implement to make our energy future more sustainable and efficient.
Realities of Fossil Fuels
Despite the drive to be green and the hype around renewables, it has to be accepted that fossil fuels will be a part of our energy mix for many decades to come. This is due to their abundance and the mature and established nature of the fossil fuels industry. Thus, even ambitious estimates of our energy mix in 30-40 years time still include at least 20% of fossil fuels.
Also, in many developing countries, the drive to meet the growing energy needs of development will lead to higher fossil fuel demand as they remain far cheaper compared to renewable energy sources. The governments in developing countries lack the financial capabilities to fund large-scale renewable energy projects to meet demand and do not have the time to wait for costs to fall. Furthermore, the lack of a common global consensus on climate change and environmental goals further impedes inter-country financial support that can help alleviate some of the financial burden.