Towards a smart energy economy
A look back at the key takeaways of the Singapore International Energy Week 2010...
Singapore International Energy Week (SIEW) 2010, held from 27 October to 4 November last year, was about "Smart Energy", and provided a much broader overview than many other clean energy or renewable energy events. The tone was set by the Singapore Energy Lecture, which was delivered by Singapore Prime Minister Lee Hsien Loong. At the Singapore Energy Summit, organised by the country's Energy Market Authority (EMA), the focus was on the future for global energy, with renewable energy viewed as part of a sustainable mix.
Shell's Malcolm Brinded (left) and Saudi Arabia's H.E. Ali Ibrahim Al-Naimi (centre) debating the future of oil, moderate by FT's Fiona Harvey (right). (Photo credit: EMA)
The key themes for the week--sustainability, security, innovation and investment--were reflected in the host of events which constituted SIEW 2010. Some were open to the public, others by invitation only, but all combined to form a Davos-style forum – with an Asian perspective and an energy focus. Conferences, exhibitions and bilateral meetings were attended by over 14,000 participants from 60 countries converging on Singapore, including energy ministers and policymakers from nations such as Qatar, Saudi Arabia, Brunei and Malaysia.
The event was billed as addressing the challenge of "Fuelling the Smart Energy Economy" – which, as Prime Minister Lee pointed out, will be needed if the world is to meet the challenge of lifting several billion people out of poverty to achieve middle-class consumption levels.
The implication of sustained economic growth on future energy requirements, specifically for the Asian region, was an underlying theme for the week. The International Energy Agency (IEA)'s Clean Energy Technologies Symposium, hosted together with the EMA, presented interesting analysis and policy recommendations. IEA Executive Director Nobuo Tanaka referred to the IEA's World Energy Outlook (WEO) 2009, which forecast that Southeast Asia's energy demand will expand by 76 percent by 2030. Tanaka noted that "rapid and large-scale development and deployment of clean energy technologies and improved energy efficiency in the region are crucial". He added that business as usual in ASEAN/China/India would imply heavy dependence on coal, which would be "a catastrophe".
Rising prominence of gas
The rise to prominence of gas and its role in meeting the 'Smart Energy' challenge was an important topic. Prime Minister Lee--and Singapore Energy Summit speakers from major oil companies such as Shell--pointed to innovation in the gas industry: the 'quiet revolution' in shale and other unconventional gas sources including coal bed methane.
The gas message was relayed strongly at a lunch discussion at the Summit. Marc Gerrits, Vice President, Shell Exploration Asia, projected a 50 percent growth in demand for gas in Asia and foresees growing importance of LNG and pipelines for imports from suppliers in the Middle East, Africa and Russia. Gerrits pointed out that having previously been exporters, Indonesia and Malaysia are now importers of gas, and that Vietnam, Thailand and Singapore are all significant users. He emphasised the importance of making gas supplies readily available through technologies, such as floating LNG platforms, to ensure that gas, rather than coal, becomes the fuel of choice for power development in Southeast Asia.
A major gas-producing nation, the State of Qatar, was represented by H.E. Abdulla Bin Hamad Al-Attiyah, Deputy Premier and Minister of Energy and Industry. The Deputy Premier observed that natural gas prices had decoupled from oil prices during the recession, but predicted that prices would rise again as gas gains momentum as a clean and secure source of energy. The State of Qatar considers LNG to be part of a global energy solution, which ensures that environmental and energy objectives are achieved.
Role of fossil fuels in the new energy future
In Prime Minister Lee's view, a 'Smart Energy Economy' needs to incorporate new and innovative energy solutions, even though our planet is not necessarily constrained in terms of fossil fuel reserves. He noted that:
"...each time you think you have run out, oil companies have consistently discovered not just new reserves but also developed new ways of extracting reserves that previously could not be tapped. <....> And in any case, whatever the prospects with oil and gas, as far as coal is concerned the supplies are sufficient to last mankind for centuries."
Prime Minister Lee also flagged energy security as critically important: even if fossil fuel prices don't rise over the longer term, instability in the market will inevitably mean spikes in energy prices and nations must diversify their energy sources.
Energy security has historically been high on the agenda for Singapore, a nation which, as the Prime Minister pointed out, is "energy poor"--lacking in domestic energy sources. At the Singapore Energy Summit dinner, we heard from H.E. Ali Ibrahim Al-Naimi, Minister of Petroleum and Mineral Resources, Saudi Arabia. Al-Naimi backed up the view that the world's fossil fuels are not running out, observing that Saudi Arabia expects to continue to supply crude oil for the next 80 years even if no more reserves are discovered. But, as he pointed out, Saudi is constantly finding more: the nation has been adding to its proven resources as much as it has been producing for over two decades.
Al-Naimi believes "petroleum passes the smart energy test" as the footprint of petroleum products is lighter than coal.
Al-Naimi tells SES participants that the world's fossil fuels are not running out. (Photo credit: EMA)
For the Kingdom of Saudi Arabia, energy security may not be as high up the agenda as it is for the Singapore Government. But far from dismissing alternative energy, Saudi is embracing it. Al-Naimi observed that solar energy is central to the country's transformation to becoming a 'knowledge economy' and pointed to the work of the King Abdullah research institutes in solar energy.
However, Al-Naimi cautioned that "premature enthusiasm of the benefits of renewables puts us at risk of confusing renewable energy as smart energy". He believes an 'either/or' approach is not appropriate: every kind of energy has a role to play. Al-Naimi pointed to the progress being made in technologies such as algae for carbon capture and storage, but believes "fossil fuels must bridge the gap".
The presence of the IEA provided some "smart thinking" on the Smart Energy Economy. IEA's Tanaka considered energy efficiency to be "low hanging fruit". Tanaka launched the IEA Policy Pathway publication on Energy Performance Certification of Buildings during SIEW 2010. The publication provides "lessons learned from countries with buildings certification programmes". Tanaka said he regards energy efficiency as "particularly important" for Southeast Asia. He pointed out that while the IEA's traditional role of focusing on strategic stockpiling of oil reserves may be the key to short-term energy security, it is increasingly concerned about the delivery of electricity – and specifically the storage of electricity. He pointed to the potential for electric vehicles to be a game changer in this regard.
The importance of energy efficiency as a lifestyle was also emphasised by Dr Narito Shibaike of Panasonic. Panasonic is incorporating energy efficiency attributes into its products, which feature the 'eco ideas house' in Tokyo. As Singapore is well aware, cities are important platforms for piloting and implementing energy efficiency solutions.
Singapore--preparing itself for the energy future
Prime Minister Lee set out Singapore's strategy on technology development. The nation is focusing on three broad research and development areas: Clean and renewable energy; innovations in conventional sources of energy (including carbon capture and storage); and energy efficiency improvements. With respect to the latter, the EMA recently appointed Accenture to design and implement an Intelligent Energy System (IES) pilot project, involving some 4,500 customers in residential, commercial and industrial locations in Singapore. According to Lawrence Wong, Chief Executive of EMA, the IES will allow Singapore "to deploy and test out promising smart grid applications in selected areas, before rolling them out on a wider scale".
With respect to renewable energy, Prime Minister Lee emphasised that it remains expensive. Pointing to the example of the Spanish solar market, he noted that the implications of providing financial incentives to keep renewable energy viable are possibly problematic. He emphasised, however, that the potential for policy to make a difference, on the margin, is to put a price on carbon. SIEW 2010 took place in the run-up to the Cancun COP16 conference, and the prospect of the Mexico talks provided a backdrop to the debate. The Prime Minister emphasised the importance of the ongoing United Nations Framework Convention on Climate Change (UNFCCC) negotiations, both in terms of GHG emissions and global warming--but also because of the danger that without a global agreement, individual countries will be tempted to go their own ways. This would imply the disruption of global trade by arbitrary rules--a factor which would have negative implications for Singapore's open economy.
The Prime Minister also noted that while Singapore is committed to doing its part under any globally agreed deal, the nation is challenged in this respect as an "alternative energy-disadvantaged country". (With limited resources of solar or wind, Singapore has little choice but to import fossil energy.)
That said, Prime Minister Lee mentioned that while nuclear power is "very difficult to do", there has been revived interest in this area, thanks to new reactor designs that are safer, cheaper and more secure. "... if we look at this rationally, without nuclear energy, the world cannot make sufficient progress in dealing with global warming. Hence, countries are expanding their nuclear energy programmes, particularly countries like France, like China, Japan, Korea".
SIEW 2010 event highlights
Carbon Forum Asia 2010, which took place on 27-28 October 2010, was one of the last gatherings of climate change opinion leaders prior to the COP16 meeting in Cancun and was an opportunity for Asia's views on emissions trading post-2012 to be presented. The Carbon Forum Asia Trade Fair showcased carbon credit projects, around 60 percent of which were from Asia.
Clean Energy Expo Asia (CEEA), jointly organised by Koelnmesse and the Sustainable Energy Association of Singapore (SEAS), took place on 2-4 November 2010. The event highlighted Asian trends in renewable energy and energy efficiency solutions and attracted over 5,000 clean energy professionals from 55 countries, with over 170 exhibitors attending the annual trade fair and conference. The conference programme featured sessions on emerging energy-efficient innovations such as smart grids and sustainable mobility, as well as energy security and renewable energy project investments. CEEA 2010 showcased a wide spectrum of green technologies in energy efficiency and waste management systems; biofuel and biomass cogeneration; solar panels and wind turbines.
Ole Enger, President and CEO of Norwegian solar company REC, which has a research and development hub in Singapore, pointed out that his company--and solar companies in general – could be in many more markets if the cost of GHG emissions was enforced as it is in the EU (the only region, as Enger pointed out, which is placing a price on carbon). In terms of the cost competitiveness of solar, Enger believes it is within reach and that, depending on the number of sun hours at a given location, solar prices have come down to 'grid parity'.
Shell, who will be celebrating its 120th anniversary in Singapore in 2011, was certainly qualified to provide a long-term perspective on energy. Malcolm Brinded, Executive Director United States for Shell, argued that natural gas is by far the cheapest and quickest way to cut global CO2 emissions from the power sector. He noted that:
"Modern gas plants emit half the CO2 of modern coal plants and up to 70 percent less CO2 than old steam turbine coal plants, of which there are still many hundreds operating in the US, Europe, China and elsewhere. Crucially, gas power plants can be dialled up or down with ease, making them the ideal complement to the intermittent power of renewable resources like wind and solar. New gas power plants are also very much cheaper to build than any other new build electricity source. They require only half the capital cost of coal per megawatt hour, one-fifth the cost of nuclear, 15 percent of the cost of onshore wind, and less than one-tenth the capital cost of offshore power, which, of course, is only being built because of heavy subsidies."
Singapore's commitment to gas was much discussed at POWER-GEN Asia. The event saw S. Iswaran, Senior Minister of State for Trade & Industry and Education, report on the recent developments in Singapore's electricity industry and announce the acceleration of the country's LNG terminal expansion. During his keynote speech, John Ng, CEO of Power Seraya, said, "In Singapore, energy companies have committed to new investment to enhance the generation capacity fuelled by the new LNG". Power Seraya, Senoko Power, Tuas Power, Keppel and Island Power have all announced and committed to new capacity fuelled by LNG.
EMA's Chief Executive, Wong, pointed out that the Singapore Government has allocated S$1 billion for a "National Innovation Challenge and energy resilience is the first challenge to be addressed under this initiative". In addition to "upstream research", Singapore is "testbedding and piloting solutions for deployment, such as the Intelligent Energy System (IES) and Electric Vehicles (EVs)."
According to Wong, SIEW 2010 aimed "to move the energy agenda from discussion to action by bringing together policymakers and key decision-makers on a single platform to map out sustainable solutions for the future." He noted that, since its inauguration in 2008, SIEW has become "a useful focal point for fruitful conversations and partnerships" for governments and companies from across the world.
SIEW 2011 is expected to be bigger than ever, with three anchor conferences and trade fairs, namely the Carbon Forum Asia, Clean Energy Expo Asia and the inaugural Asia Smart Grids Expo and Conference. It is scheduled to take place from 31 October to 4 November 2011--Save the Date!
Article reproduced with permission from Cleantech Magazine, a media partner of the Singapore International Energy Week 2010. The UK-based magazine focuses on the fast-growing cleantech space.
By : Anne McIvor, Cleantech Magazine