Lastest Energy Updates From COS Debate 2014
Mr S Iswaran, Second Minister for Trade and Industry, gave a speech during the Committee of Supply Debate under the Ministry of Trade and Industry. Here are some highlights and updates on the electricity market and solar energy in his speech:
38. Let me now turn to the energy sector. Our aim is to strike a balance between energy security, economic competitiveness, and environmental sustainability. We seek to do so by pricing energy right, avoiding consumption subsidies, and fostering a competitive energy market for the benefit of businesses and households.
39. As I announced last year, EMA has sought to promote more competition in the electricity retail market through the Increased Retail Contestability initiative.
40. Dr Lim Wee Kiak and Mr Liang Eng Hwa have asked how such measures will benefit consumers. Currently, only about 8,000 large consumers who use more than 10 megawatt-hours (MWh) per month can choose to purchase electricity from electricity retailers through negotiated contracts. This is the contestable segment of our market.
41. This threshold will be lowered to 8 MWh from 1 April, and then to 4 MWh from 1 October this year. In total, this will allow 15,000 more consumers to choose their electricity retailer and sign on to packages that best suit their needs.
42. With this change, 15 town councils have already signed up for contestability under this initiative. In fact, this is a point that Mr Zaqy Mohamad raised at last year’s Committee of Supply as well. As a result of the sign ups by the 15 town councils, I understand that collectively they will enjoy a reduction of at least 10 per cent off the regulated tariff, which works out to an estimated $640,000 in monthly savings.
43. Companies, especially SMEs, across all sectors will also benefit. They can now aggregate their demand across various locations to meet the lower threshold, and choose a retailer who offers the most competitive pricing. Several firms from various sectors, like SMD Manufacturing and Kleen Pak Products, F&B outlets like the Song Fa chain of restaurants, and logistics firms like Huationg, have already done so and will enjoy cost savings ranging from 3 and 12 per cent.
44. EMA is studying how to further expand the contestable segment of the market over the next few years to include all consumers, including households. In doing so, EMA will also have to ensure that there are adequate system safeguards even as more businesses and households benefit from greater retail contestability.
45. We will continue to provide progressive and targeted assistance to low- and middle-income households through the Utility-Save (U-Save) special payment and quarterly U-Save rebates. This was announced by the Finance Minister in the Budget Statement For the majority of Singaporeans who live in 3- and 4-room flats, the rebates will offset around two to three months’ worth of utilities, or three to six months’ worth of electricity bills.
46. Energy security is another key priority as we import almost all the energy.
47. Singapore’s energy security was given a significant boost when our first liquefied natural gas (LNG) terminal on Jurong Island commenced operations in May last year. This allows us to import natural gas from around the world. To meet future demand in a secure manner, we will develop a 2nd LNG terminal to diversify our LNG infrastructure.
48. And we continue to explore other energy options. Mr Liang Eng Hwa asked for an update on electricity imports. We are studying how electricity imports can add to our energy mix without compromising the stability and security of our system. EMA is developing the proposed regulatory framework and will be seeking further industry feedback by the end of the year.
49. We will also do more to encourage the use of renewable energy. This will help reduce our reliance on imported fuel and our carbon footprint.
50. Among the various renewable energy options, solar has the greatest potential for wider deployment in Singapore. As a principle, rather than subsidise consumption, we have supported R&D and encouraged the market to adopt economically viable forms of renewable energy. As Mr Ong Teng Koon has noted, recent global developments suggest that solar energy has become more cost-competitive.
51. As a result, we plan to raise the adoption of solar power in our system to 350 Mega-Watt-peak (MWp) by 2020. This is about 5 per cent of 2020 peak electricity demand, a significant increase from the present 15 MWp of installed capacity today.
52. EDB will work with key government agencies to aggregate demand for solar deployment across Government buildings and spaces. This “SolarNova”* programme will also catalyse the growth of the clean-energy sector, and create opportunities for Singapore businesses such as Sunseap, PV World and SolarGy.
53. As renewable energy sources like solar are intermittent in nature, EMA is reviewing its regulations to ensure our system remains stable, even with greater adoption of renewables. EMA will continue to work with industry to refine the regulatory framework.
54. We will also support the use of renewables by continuing to test-bed innovative energy technologies and business models. An example is the deployment of floating photovoltaics on reservoirs to overcome land constraints. In addition, the inter-agency Energy Innovation Programme Office is funding research into technologies to allow the integration of intermittent generation sources into our electricity grid.
55. These initiatives not only create business opportunities for our clean-tech ecosystem but also good jobs for Singaporeans.
56. Over the next 10 years, we need around 2,400 technical professionals for the energy sector. These are good jobs and we will continue to equip Singaporeans with the skills to fill such jobs.
57. Ms Katelyn Ng (25 years) and Mr Ridhuan Abdullah (39 years) are two of the growing pool of Singaporeans who have chosen careers in the energy sector. Ms Katelyn Ng joined Singapore LNG Corporation over 2 years ago on its Graduate Development Programme. She helped set up the LNG terminal’s laboratory and now oversees its operations. Mr Ridhuan Bin Abdullah is a polytechnic graduate who made a mid-career switch to join Tuas Power. He has since progressed from a Technical Officer to an assistant shift manager at Tuas’ $2 billion Tembusu Multi-Utilities Complex. We want to encourage more Singaporeans to embark on a promising career in the energy sector.
* The SolarNova Programme is an initiative led by EDB that aims to accelerate solar deployment in Singapore through promoting and aggregating solar demand across government agencies. Specifically, SolarNova will:
- build awareness of solar energy amongst public agencies,
- carry out feasibility studies and site selection for solar installations for public agencies; and
- aggregate demand for solar amongst public agencies to achieve economies of scale.
Through government-led demand, SolarNova will create new opportunities for Singapore-based companies in the solar industry.
SolarNova will bring about the following benefits:
- Catalyse the growth of solar energy in Singapore, which will reduce our carbon emissions and reliance on imported fuel;
- Build up the solar industry in Singapore across the value chain, including manufacturing, project development and financing, and system integration; and
- Encourage private sector adoption of solar as various players in the ecosystem, such as engineering contractors, project developers and financial institutions, become more familiar with solar projects.
EDB is working with government agencies to finalise the implementation details of SolarNova.