SPEECH BY ER DR LEE BEE WAH, MP FOR NEE SOON GRC, AT THE SECOND READING OF THE ENERGY CONSERVATION (AMENDMENT) BILL IN PARLIAMENT ON 3 APR 2017
In the next decade, our energy demand is expected to grow at a projected compounded annual growth rate of approximately 1.2 to 1.8%. Our industrial sector is the largest consumer of energy. It is thus important that this sector improves its energy efficiency. We pledged a 36% emissions intensity improvement by 2030 under the Paris Agreement. From now until then, we will require a consistent improvement rate of one to two % each year.
In January this year Environment and Water Resources Minister Masagos Zulkifli had shared that Singapore-based companies achieved an annual energy efficiency improvement rate of 0.6 per cent in 2015, and 0.4 per cent in 2014. We certainly have work cut out for us, and we absolutely must take a tougher stance on energy efficiency.
I would like to ask Minister, what if we cannot meet our pledge of 36% improvement by 2030? What will be the consequences?
Stricter measures to monitor energy efficiency
Certainly, to improve the current situation, it is vital that we must have a clear understanding on what is expected. This means accurately monitoring energy usage, and then using the results, analyse how and how much one can reduce if necessary.
In South Korea and the European Union, companies are required to conduct regular energy audits, usually every three to five years. In place of conducting energy assessments, large companies in the EU can also choose to adopt internationally-certified energy management systems, such as the ISO 50001. The proposed enhancements to the Energy Conservation Act (ECA) is thus a move in the right direction. It is wise to mandate that large industrial facilities are to submit a monitoring plan and subsequently, an improved emissions report to NEA. By making it compulsory for these facilities to adopt methodologies that are in line with internationally recognised protocols, this brings us yet another step further towards international standards for climate-friendly nations.
In the meantime, energy-intensive companies in Singapore have been reporting their energy usage since the introduction of the ECA in 2013. Can the Minister share some insights from these reports, and how the ECA amendments will help to raise the bar for energy efficient standards of common industrial equipment?
I would also propose more encouragement and incentives for companies to adopt energy management systems and software approved by the NEA. Rather than adopt a sit-and-wait approach, reacting to the results from monitoring energy usage, it would be more efficient and productive to get companies started on a good energy management plan. As the need for these energy management systems becomes more prominent, I foresee great potential in this industry, and I hope the relevant government agencies will do more to promote the quality and capability of local energy management systems.
Last year, global energy services provider ENGIE officially opened its first laboratory in Asia in Singapore with support from the Economic Development Board. This laboratory is part of an international R & D network, supported by 1,100 researchers and experts worldwide. It focuses on smart energy systems for cities and islands, industrial energy efficiency, and gas technologies. Are there plans to collaborate with and tap on this network?
Improving energy efficiency standards of industrial equipment
Data from NEA shows that a large number of industrial equipment are inefficient. Hence, companies, when deploying new facilities, will now have to ensure that it meets the newly-introduced Minimum Energy Performance Standards. This will first apply to motors, gradually extending to include other systems and equipment. I am pleased to note that this new standard is being implemented gradually.
While I think it is a good policy to have, it requires a significant amount of change on top of other existing restructuring efforts. I would like to ask how the ECA amendments can help companies to raise the bar for energy efficient standards of common industrial equipment?
Helping companies adopt more energy efficient processes
Certainly, in the long run, businesses will gain through savings from improved energy efficiency. But in the short-term, in trying to kick-start the new systems and auditing processes, this could be a burden for companies, especially in the current economic climate. I have spoken with some business owners, who expressed their concerns about the start-up costs of implementing and maintaining the new systems. I would like to ask the Minister if any consultation has been done to obtain feedback from affected companies on the proposed amendments? Moreover, how does the MEWR intend to support them?
I think this is important, especially in the initial years, to get companies on the right track. The first and early steps are always the hardest.
I am pleased to note that the Energy Efficiency Fund (E2F) will be redesigned to better support companies to identify and undertake energy efficiency retrofitting. This fund will co-fund up to 30 per cent of investments in more efficient technologies. First of all, I commend this move as earlier on, the various overlapping schemes and incentives had made it confusing and time-consuming for businesses to tap on them. Hopefully with this new fund in place, the take-up rate will become considerably higher.
My next concern is how accessible the funds are, whether the release of funds will be done at the start of the project, or after it is complete with justification of evidence of expenses. I would like to bring to attention the Brussels’ Zero interest green loan. It is applicable to households, and that is because residential buildings are responsible for majority of energy consumed in the city. The Brussels Green Loan is available to Brussels households with a limited income and it will eventually be extended to all households. I hope the government will consider something similar for businesses, as sometimes it is challenging for businesses to kick-start something without sufficient capital.
Energy storage and Solar Technology
Energy storage should be another major component in a comprehensive far-sighted strategy for energy sufficiency. Considering our small geographical size, energy storage would be vital in supporting greater deployment of photovoltaic systems (solar power systems). It could potentially be a game changer for our electricity market in the near future. More can be done to attract investors through incentives and a certain climate to encourage them to invest in energy storage applications and technology. I understand that under our Energy Storage Programme, the Energy Storage System Test-bed is one of the initiatives to explore energy storage feasibility and technology in Singapore. This is a fairly new initiative and the Request-for-Proposal was launched last year. I would like to ask the Minister for an update on it.
Nurturing Talents in Energy Services
It is clear that there is a globally shared understanding on the importance of energy management in combating climate change. So energy services in facilities management will certainly continue to be in demand in the years to come. To make the entire framework sustainable, there needs to be continuity, and this means a long-sighted approach; nurturing talents of tomorrow. We must not only focus on energy management within industries, but also on the provision of these energy services management. In recent years, several courses have been developed by the local universities and polytechnics, offering degrees and diplomas in energy management and the likes. What is the uptake rate of these courses, and how many students eventually graduate to work in a related field of their studies? Will there be opportunities for mid-career switchers?
Singapore’s efforts to maximise energy efficiency may be intrusive for businesses, but should be embraced for the potential positive impact it would have, not just on the environment, but on the economy. Germany recently commissioned a study to analyse the potential impacts of the Paris Agreement, and the report revealed that efforts to slow climate change could boost the world’s economy by $19 trillion. Investments in renewable power and energy efficiency will add about 0.8 percent to global gross domestic product by 2050.  But in any country, this will require a multiple-prong approach that involves the government, businesses and individuals. Certainly, we should not be left behind.
Allow me to summarise in Chinese.