Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Energy Conservation (Amendment) Bill [Bill No. 17/2016]
Madam, I am heartened by this Bill as a signal of the government’s firm commitment towards an economic model that considers not just raw growth in numbers, but also growth that is responsible to both society and the environment.
This is not the first in our series of bold commitments towards environmental protection, following on from the recent announcement of the carbon tax, and last year, requiring sustainability reporting from all listed companies.
Amendments a natural next step to help industry move towards energy efficiency improvement rates of 1 to 2%
Since the Energy Conservation Act was brought into effect in 2013, it appears that companies have been able to fulfil the Act’s requirements to implement certain basic energy management practices. This includes appointing at least one certified energy manager and reporting their energy use and greenhouse gas emissions.
Singapore’s Climate Action Plan released in July 2016 revealed our intention to encourage the manufacturing sector to achieve energy efficiency improvement rates of 1 to 2% a year between 2020 and 2030.
Thus, it seems like a natural next step to enhance the Act by requiring industrial facilities to submit a monitoring plan and emissions report in line with international standards.
Updates on incentives schemes for industry to invest in improving energy efficiency
Madam, during the COS debates, Minister Masagos compared Singapore’s energy efficiency improvement rates to that of other countries like Belgium and the Netherlands.
He mentioned that operational and capability constraints and inefficient common industrial equipment could be the reason for lower energy efficiency rates in Singapore.
I believe that another reason could also be the highly specialised and integrated nature of Singapore’s industrial sector, which leaves little room for downtime.
Improving energy efficiency often requires equipment upgrades, but such upgrades are likely to cause disruptions to operations and come at a cost.
Furthermore, companies operating on thin margins may avoid proposing improvements to energy efficiency, as this often involves high capital costs and adds pressure to their bottom-line.
Management often approves projects that meet the dual criteria of low investment cost and short pay-back periods – and projects on energy efficiency may not make the mark.
I believe the government has spotted these barriers, and is planning to conduct reviews of incentive schemes to support companies in this transition. This includes piloting an energy efficiency financing programme and providing investment allowance for energy efficiency.
Could the Minister provide more details about this and on when we can expect to receive updates on these revised incentive schemes?
Success of previous energy-related incentive and grant schemes
I understand as well that we have implemented previous energy-related incentive and grant schemes. This includes the Design for Efficiency (DfE) Scheme, Energy Efficiency Improvement Assistance Scheme (EASe), Grant for Energy Efficient Technologies (GREET), and the Singapore Certified Energy Manager (SCEM) Training Grant.
As an indication of how receptive the industry is towards government support for energy efficiency, can the Minister share information on the take up rate of the key schemes that I have listed?
Was there a slow take up rate and could slow take up rates have contributed to low energy efficiency improvement rates?
Consolidation of the Energy Efficiency Fund (E2F)
I also note that energy efficiency grants are being consolidated under E2F. Does MEWR believe that consolidation will lead to better take up rates?
Given that the Act’s enhanced requirements will come into effect from 2018 onward, will MEWR or NEA make available the E2F so that companies affected will have time to apply for the grants?
What measures can be taken to improve the up-take rate of E2F?
Madam, the government must continue to support the industry in our goal to leapfrog from our current 0.2 to 0.6%, towards the 1 to 2% goal for our energy efficiency improvement rates.
I raise these points to ask for further clarity on how we are providing that support, beyond strengthened requirements for monitoring and reporting as proposed by this Bill.
That said, I applaud this Bill for announcing bold steps in ensuring that Singapore meets its COP21 commitments and I stand in support of the Bill.