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Ladies and Gentlemen
1. A very good morning, and welcome to the Singapore International Energy Week 2013 (SIEW). Now into its 6th year, SIEW is a platform for thought leaders, policy-makers and professionals to discuss key developments and new opportunities in the energy sector. I look forward to the exchange of views at the panel discussions today, and the various forums to be held over the rest of this week.
"New Horizons in Energy"
2. We meet against the backdrop of exciting trends in the global energy landscape. The emergence of novel technologies, the advent of new oil and gas supplies, and the growth and diversity of renewable energy sources, certainly herald "New Horizons in Energy".
3. Hydraulic fracturing technology, or "fracking", has led to a boom in unconventional gas production in the United States. Consequently, the US is projected to be a net exporter of gas by 2020. The UK, China, and Australia, among others, are also actively exploring and developing their own unconventional gas resources. The US Energy Information Administration estimates that the amount of unconventional gas that is technically recoverable globally now stands at 7.3 trillion cubic feet. At current rates of global gas consumption, this is sufficient to last us about 80 years. The shale gas revolution has already had an impact on global gas trade flows, contracts and prices by fostering greater competition. Further developments of unconventional gas will reinforce such trends - which is important to Asia as a major net importer of energy.
4. Smart grid applications and energy management systems have also evolved and gained traction globally. With these technological advances, consumers are now able to manage their energy consumption in a cost-effective and automated manner.
5. Further, the proliferation of renewable energy is transforming the way energy is harnessed, distributed and consumed. The International Energy Agency (IEA) estimates that renewable energy is now the fastest growing sector of the global energy mix, accounting for around a fifth of all electricity produced worldwide.
6. Governments and policy-makers must consider how these global developments can be harnessed to secure the energy future of their countries. This morning, I would like to share some of the strategies and initiatives that we are taking to diversify Singapore's energy mix, foster competition in our energy markets, and help consumers make more informed choices about their energy use.
One key strategy is to diversify our energy sources. To this end, our Liquefied Natural Gas (LNG) terminal commenced operations in May this year, with an initial throughput capacity of 3.5 million tonnes per annum (Mtpa). This will increase to 6 Mtpa at the end of this year with the completion of a 3
rd tank. We have also announced plans to expand the terminal by adding a 4th.
8. The LNG terminal is a significant and critical addition to Singapore's energy infrastructure. It allows us to procure competitively priced gas from around the world. It enhances our energy security and enables us to meet future energy demand. In addition, the terminal will allow Singapore to explore opportunities in LNG-related activities such as trading, break bulking and bunkering.
9. The rest of Asia is also bullish on natural gas. According to the IEA, the Asian natural gas market is the fastest-growing market in the world, and is expected to become the second-largest by 2015. There will be more opportunities to discuss issues arising from Asia's increasing demand for gas, and global developments on the supply side, at the 2nd Gas Asia Summit, which will be held later this week.
10. To further diversify our energy mix beyond natural gas, Singapore is exploring renewable energy options. The IEA forecasts that renewable energy will account for 47% of worldwide growth in electricity generation between 2010 and 2035. This trend is driven by various factors, including falling costs, technological improvements, and the drive to meet renewable energy policy targets.
11. At present, solar energy is the most viable source of renewable energy for Singapore. Hence, the Singapore Government has invested significantly in solar Research and Development (R&D) efforts. These include competitive research grant calls, test-bedding efforts, as well as support for research institutes - such as the Solar Energy Research Institute of Singapore (or SERIS) - to study the technical aspects of adapting solar energy to Singapore's context. One example is the micro-grid test-bed on Pulau Ubin, an offshore island to the northeast of Singapore. With the launch of the micro-grid earlier this month, test-bed participants have access to cleaner, cheaper and more reliable electricity generated from renewable sources such as biodiesel and solar photovoltaics (PV) - compared to the diesel generators they relied on previously. The test-bed will also allow our Energy Market Authority to gain a better understanding of the management of intermittent generation sources, for eventual application in the national grid on the mainland.
12. To complement these R&D and test-bedding initiatives, we are preparing our system to effectively incorporate solar energy as it becomes commercially viable. EMA is enhancing its power system operations capabilities, by building up solar forecasting competencies, developing an understanding of the diversity of solar output across Singapore, and studying how intermittent sources can be accommodated without affecting grid stability.
13. To facilitate greater deployment of renewable energy sources, and enable their integration into the current electricity market, EMA is reviewing its regulatory framework to better account for the benefits and externalities of renewable sources. EMA will be launching a public consultation today on the regulatory framework for intermittent generation sources, such as solar energy. One area for consultation is how the market registration procedures can be simplified to allow small consumers with intermittent generation sources to be paid for supplying their excess electricity to the grid. Another is the procurement of reserves to manage intermittency. Currently, EMA imposes a hard cap of 350MWp on the amount of intermittent generation sources that can supply to the grid. This is due to the amount of reserves required to back-up intermittent sources and ensure system stability. EMA is reviewing this approach. Instead of a hard cap, EMA will explore how best to procure and cost in reserves to manage this intermittency. But as a first step, the cap will be raised to 600MWp, in view of our current reserves. Views are being sought on a framework which will facilitate greater entry of intermittent sources, while maintaining power system stability. I urge all stakeholders to participate in this public consultation and contribute your ideas which will help refine the eventual framework.
14. These and related ideas will be discussed further at other forums on renewable energy taking place later in the week. The PV Asia Pacific Expo and Conference, and the Asia Future Energy Forum will discuss technology, governance, financing and development trends in clean energy in Asia.
15. Another important energy policy goal for Singapore is to foster greater competition in the electricity market which, in turn, will ensure that prices remain competitive.
16. In that regard, one initiative we are considering is the introduction of an electricity futures market to complement the spot market. A futures market will help large electricity consumers to better manage price volatility by allowing them to secure longer-term prices. A futures market will also provide an alternative avenue for independent retailers to enter the market by enabling them to purchase longer-term hedges. The entry of such independent players can in turn further spur retail competition to the benefit of end-consumers.
17. A year ago, EMA held a public consultation on the development of an electricity futures market in Singapore. Taking into consideration industry feedback, EMA issued a Request-for-Interest Paper in May this year, setting out the proposed design of the futures market and seeking indications that there is sufficient interest to proceed. I am pleased to note that six generation companies in Singapore have indicated interest to collaborate with the Singapore Exchange (SGX) to develop the futures market. These companies are: Keppel Merlimau Cogen, Sembcorp Cogen, Senoko Energy, Tuas Power Generation, Tuaspring and YTL PowerSeraya.
18. Commercial discussions for the development of the futures market are in progress. An industry workgroup is in the process of developing the design of the electricity futures contracts. It is also in the midst of establishing a market making arrangement that will ensure sufficient liquidity for the trading of electricity futures. In addition, SGX is working with the industry to launch a trial for the electricity futures market next year. This trial will allow generation companies to build up competencies and experience in trading and market making. We hope that the electricity futures market will be launched some time in the second half of 2014.
Enabling more informed decisions on energy use
19. On the demand side, the Government is also constantly seeking to help end-consumers in Singapore to make more informed decisions and optimise their energy use.
20. Last year, I announced the launch of the consultation process on incorporating Demand Response as part of the Singapore electricity market. 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. These savings will then be passed through to consumers who curtail their demand.
21. EMA has completed its consultation and has decided to proceed with the Demand Response scheme. EMA is finalising its review of the feedback obtained, and will be releasing more details of the scheme in a Determination paper to be released at SIEW this week. The scheme is expected to be implemented in 2015 after the required system changes have been put into effect. Interested industry players can use this time to attract and equip consumers with the technical requirements to participate in the Demand Response scheme. Eligible consumers will also be able to factor Demand Response in their investment decisions on energy efficiency or sustainable energy management initiatives ahead of time.
22. I have shared several initiatives that the Singapore Government is undertaking to develop our energy sector. However, individuals and businesses play a key complementary role in developing a strong and vibrant energy industry.
23. In recognition of this, this year, for the first time we are presenting the Singapore Energy Award, to organisations and individuals who have made outstanding contributions to Singapore's energy sector. This is an acknowledgement of their achievements in innovation and capability development. I hope that energy players in Singapore will be encouraged to emulate their fine example and continuously strive for enhancements in the sector.
24. I am pleased to announceFirst, the recipient of the Award for the "Individual Category", is Mr. Quek Poh Huat, a respected industry captain and the current Senior Adviser of Singapore Power. He has demonstrated outstanding leadership in developing local power sector manpower capabilities, especially in his capacity as Chairman of the industry-led Power Sector Manpower Taskforce. He is also driving the establishment of the Singapore Power Training Institute (SPTI) as a one-stop training centre to serve the needs of the broader power sector. The "Organisation" Award goes to Senoko Energy, a pioneer in Singapore's power sector. Senoko Energy is the first power generation company in Singapore to offer dedicated scholarships to graduates from our local Institutes of Technical Education (ITE) and Polytechnics interested in pursuing a career in the power sector. Senoko Energy's sustained and exemplary efforts in promoting awareness of energy and sustainability issues among our youths are also commendable.
25. A Special Mention Award will also be presented to energy youth group, Energy Carta. This special award recognises Energy Carta's spirit and passion in promoting energy awareness and inspiring other like-minded youths to take up energy causes. Later this week, I look forward to meeting youths from our schools and Institutes of Higher Learning at the event "In Dialogue with Youth". I hope that such platforms will excite our youth to think more about their role in attaining our objectives of energy security, environmental sustainability and economic competitiveness, and perhaps inspire them to consider a career in our vibrant energy sector.
26. Energy is a pillar in every country's economy. In Singapore, we have embarked on a range of initiatives to diversify our energy sources, foster greater competition in the electricity market, enable more informed decisions on energy use, and develop capabilities for a strong energy sector.
27. Many of such ideas emerge from the exchange of views amongst energy professionals, policy-makers and industry players. Singapore has learnt much from the experiences of others. I hope that we can continue to contribute to the global discourse on energy issues through the Singapore Energy Summit which brings together thought leaders from various fields and countries to share, interact and debate.
28. I wish you all a fruitful and productive week ahead as you engage in these important conversations and generate new insights. Thank you once again for joining us at the Singapore International Energy Week.
US Energy Information Administration, April 2013.
US Energy nformation Administration, June 2013.
Additional re-gasification equipment to boost the terminal's capacity to 9 Mtpa will be completed by 2016. The 4th tank itself is expected to be completed by 2017.
Source: World Energy Outlook 2012, pg 191.
The trial will take place in 1H 2014. If successful, the electricity futures market will be launched in 2H 2014.
The detailed contributions/achievements of the winners will be separately announced during the SEA awards ceremony.