Speech by Senior Minister of State for the Environment and Water Resources Dr Amy Khor at the Opening Ceremony of the National Energy Efficiency Conference 2015 and Presentation of the Energy Efficiency National Partnership Awards
Distinguished Guests
Ladies and Gentlemen
Good morning. I am very happy to be here at the opening of the National Energy Efficiency Conference 2015.
Singapore’s Intended Nationally Determined Contribution
Some of you might be aware that in July this year, Singapore submitted its Intended Nationally Determined Contribution[1] to the United Nations Framework Convention on Climate Change Secretariat, stating our intention to reduce our greenhouse gas emissions intensity, which is the amount of greenhouse gas emitted per dollar of GDP, by 36 per cent from 2005 levels by 2030, as well as to stabilise emissions with the aim of peaking at around 2030.
So, what does the pledge mean? It means that Singapore is fully committed to doing our part in reducing carbon emissions although we contribute only about 0.11 per cent of global emissions.The pledge is a stretch target and will require the concerted efforts of all stakeholders – businesses, households and individuals. Given Singapore’s reliance on imported energy and the limited options for alternative energy, improving energy efficiency is a key strategy that Singapore has adopted to mitigate our greenhouse gas emissions, improve energy competiveness and security. This year’s conference has therefore adopted the theme “ Strategic Energy Management for Resilience”, where stakeholders can come together to share ideas and best practices of how companies can leverage on energy efficiency as a key strategy, to better meet the challenges posed by a changing climate.
Energy Conservation Act – Mandatory Basic Energy Management Practices
Last year, 168 companies operating 213 energy intensive facilities from the manufacturing and utilities sectors submitted their first energy consumption reports and energy efficiency improvement plans under the Energy Conservation Act (ECA).
The ECA obliges these companies to register themselves with NEA and put in place a basic set of energy management practices, which include appointing an energy manager, monitoring and reporting energy use and greenhouse gas emissions annually, and submitting energy efficiency improvement plans annually.
The 213 facilities accounted for about 83 per cent of Singapore’s primary energy consumption[2] and 63 per cent of our final energy consumption[3] in 2013. I am happy to note that these 168 energy-intensive companies now have in place a basic set of energy management practices.It is important that they have a strong focus on energy efficiency as they account for the lion’s share of energy use in Singapore.
I will briefly share some of the key observations from reviewing the energy use reports and improvement plans. There are three.
First, according to NEA, the ECA companies are planning to invest about $1.24 billion over the next five years and expect to save more than $200m annually through these investments.The payback period on almost two-thirds of these investments is less than 3 years and most energy efficiency measures will be no cost and low cost measures.Most of the measures that involve investments in more efficient technologies and processes will each cost companies less than $1million to implement.This is noteworthy and insightful, and implies that there is an abundance of low-lying fruit that companies can pick that will help them reduce their energy costs and become more competitive.
A second observation is that there is room for the ECA companies to set more ambitious goals for themselves. Based on their returns, three-quarters of the facilities regulated under the ECA are planning to reduce their energy consumption by only 5 per cent or less between 2014 and 2018. They have not developed long-term energy efficiency plans, and the projected energy efficiency improvement of manufacturing companies covered under the ECA is only around 0.7 per cent per annum over the next two years. In contrast, energy intensive companies in the Netherlands and Belgium, for instance, have been achieving 1 to 2 per cent improvements annually in fulfilling their obligations under long-term voluntary agreements with their respective governments. So there is room for improvement. I suggest companies consider taking up NEA’s Energy Efficiency Improvement Assistance scheme. This offers grants to engage energy consultants to carry out audits and more rigorous studies to uncover new opportunities to implement energy efficiency measures in their facilities.
A third observation is that more than half of the companies regulated under the ECA do not have the necessary measurement systems and tools to accurately monitor and track their energy consumption. Having a basic set of energy management practices is only the first step.Companies should also continuously invest in energy efficiency and implement rigorous energy monitoring practices to continuously track their energy use and optimise their systems.
Last year was the first time that these companies were submitting information to NEA, so it may be too early to draw any definitive conclusions. We will need to track the progress of these companies over the next few years to assess the benefits of putting in place basic energy management practices, and the long term ambition for energy efficiency in the industry.
Many of you might recall that prior to 2014, energy prices were much higher than they are now and the impetus to reduce energy costs was high.While energy prices have meanwhile moderated, they are still volatile as there is a lack of clarity of global supply and demand because of the effect of the large scale exploitation of shale gas in the US on oil markets and the slowing global economy.
Even as energy prices have moderated, Singapore companies should continue to invest in energy efficiency. Energy efficiency helps to build resilience against future high energy price scenarios and an increasingly carbon-constrained world.
Energy efficiency practices in other countries
In other parts of the world such as the EU and USA, where the strategic role energy efficiency plays in reducing energy consumption in the industrial sector is recognised, broader strategies to improve energy efficiency are being implemented.
For example, companies in the EU, USA, Australia and South Korea are now enjoying the life cycle benefits from purchasing higher-efficiency industrial equipment such as motors and boilers as these countries have adopted minimum energy performance standards for common industrial equipment.
Energy-intensive companies in the EU, South Korea and India are now conducting regular energy audits every four to five years or certifying themselves to internationally recognised energy management systems such as the ISO 50001. These companies benefit by adopting a systematic method to identify energy efficiency opportunities.
Some of the international best practices that companies can adopt, such as selecting more efficient equipment, conducting regular energy audits and putting in place robust energy management systems, will be discussed in greater detail during the conference. I will leave it to the speakers to bring you through the benefits of adopting such practices in your company.
Solar energy
Besides energy efficiency, there is also significant growth in the renewables sector, especially in solar energy. Singapore is well-positioned within the tropics with lots of sunshine. There has been a rise in the number of companies considering solar energy, and the number of solar panel installations is expected to increase. The number of solar companies operating in Singapore has also grown almost 5-fold since 2007.
Solar prices have been falling in recent years and the average cost of solar panels has fallen from $77 per watt in 1977 to approximately 61¢ per watt in 2014. As a result, solar energy is becoming cost-effective and consumers could consider including it in their energy management plans.
Other than direct ownership, where customers have to pay for the solar PV installation upfront, other innovative business models are also available to promote wider adoption of solar energy. One such business model is solar leasing, which does not require building owners to incur any upfront costs. Under such an arrangement, photovoltaic systems are installed and owned by a third party and the customer pays for the electricity consumed from the installation, which is charged at a rate that is competitive to the retail electricity tariff.
In June 2015, HDB called the largest public solar leasing tender to install solar photovoltaic panels with a 40 MW peak generation capacity. The solar panels will be installed at eight Ministry of Home Affairs’ and Public Utilities Board’s sites, as well as an estimated 900 HDB blocks. More details regarding the benefits of solar leasing will also be shared later at the conference today.
Solar power paves the way for a cleaner and more sustainable energy future. It is a convenient and green solution to reduce your organisation’s carbon emissions. Another benefit of investing in solar PV installation is that companies that do so would have basically fixed their energy price for the next 20 to 25 years. This is in contrast to buying electricity from the market, where companies are subject to the volatility of the market. In this way, companies could also have more secure energy prices, by adopting solar energy.
Energy Efficiency National Partnership Awards 2015
As Mr Ram Bhaskar had said earlier, this is the fifth year that NEA is organising the Energy Efficiency National Partnership (EENP) Awards. This year, 8 organisations, 3 energy managers, 3 schools and 2 public sector agencies are being recognised for their energy efficiency efforts. I would like to take this opportunity to congratulate all of the Awards recipients. All of you have done well.
Since the EENP Awards were first presented in 2011, we have seen a gradual shift in the nature of projects submitted for the Awards. In the earlier years of the awards, most of the projects involved energy efficiency improvements to common utilities and services such as cooling systems. Recently, we are seeing more projects that involve reducing the demand for services such as compressed air and heating, within the production processes. This is a good sign, as it shows that more companies are looking into optimising their production processes and reducing waste, to unlock the energy savings potential. It is also heartening to note that some of these projects were undertaken in-house.
For example, Mr Sebastian Choo from Molex Singapore set up a multi-disciplinary energy management committee and worked together with them to improve the efficiency of production processes. The team embarked on several energy saving projects. In one of their projects, they successfully reduced the compressed air consumption by 50 per cent in the plating process without affecting the quality of the products. This project achieved 726 MWh of energy savings annually.
I would also like to commend Kuraray on their effort in optimising energy use and reducing operational cost. The plant operating processes were modified for better process heat integration to reduce heat loss. This analysis was conducted by in-house engineers and the project achieved a total annual energy consumption reduction of 28.9 GWh.
National Energy Efficiency Conference 2015 Programme
Several EENP Award recipients, together with local and overseas experts will be sharing their success stories and best practices at this conference today and tomorrow. I trust that you will find these sessions informative, engaging and fruitful. Do take this opportunity to share your views as well as network with other like-minded peers.
Conclusion
In conclusion, every one of us has a role to play in driving energy efficiency improvement, and it is important to develop an energy culture within your organisations. It starts by influencing your colleagues around you to switch off equipment when they are not in use and getting them to choose energy efficient equipment. Let’s work together to continue to cultivate an energy conscious mind-set and unlock more energy efficiency improvements.
I wish all of you a fruitful and engaging conference.
Thank you very much.
[1] http://www4.unfccc.int/submissions/INDC/Published%20Documents/Singapore/1/Singapore%20INDC.pdf
[2] Primary energy is the energy contained in the energy source, such as raw fuels and renewables, before transfofrmation to electricity, heat or other energy types.
[3] Final energy is the energy supplied to end consumers, in the form of fuels, electricity, heat, etc.
Source: Ministry of the Environment and Water Resources