Committee of Supply Debate 2010: Energy Policies under the Ministry of Trade and Industry

Mr S Iswaran, Senior Minister of State for Trade and Industry, gave his speech during the Committee of Supply Debate under the Ministry of Trade and Industry (MTI) yesterday. The speech addresses questions related to Singapore’s energy policy, and can be downloaded from the MTI website.

Here are some key points that he raised:

Our goal is to make Singapore a Smart Energy Economy with an energy ecosystem that is secure, sustainable and competitive. Our strategy to meet the global energy challenges rests on two key thrusts: diversification and competitive energy markets.

The Government agrees with the Economic Strategies Committee’s (ESC) recommendation to adopt a portfolio approach towards energy – in other words, no one energy option will be adequate to meet our varied energy objectives.

We will adopt a pragmatic approach by evaluating the alternatives on the basis of energy security, economic viability and environmental sustainability.

Among the renewable energy sources currently available, solar is one of the most promising in our context for electricity generation. While still relatively expensive today, solar energy prices could achieve grid parity in the medium term.

… why are we prepared to study nuclear energy as an option now. There are several reasons for this. Firstly, it can potentially enhance energy security, reduce carbon emissions, and mitigate the impact of volatile oil and gas prices – thus it could meet, potentially all our objectives embedded in the national energy policy.

The aim is to ensure that we fully understand, and objectively evaluate from all perspectives, the opportunities, challenges and risks involved with nuclear energy. The study will commence later this year. It will entail a careful, deliberate and rigorous examination of the technical, economic and safety aspects of nuclear energy.

Clean coal could be a component of our energy diversification strategy. Currently, coal makes up more than 40 per cent of global power generation. And, it is expected to remain at this level until at least 2030 given the relative abundance of coal sources in the world. Coal also has a cost advantage though this may be eroded by any future global carbon pricing regime. However, combustion technology is evolving, making coal cleaner than before and we must, therefore, keep this option open.

We are price-takers in the global energy market because we are small and import almost all our energy requirements. We therefore must allow the full cost of energy to be reflected in prices. Subsidising energy would be encouraging wasteful consumption and it will also be a drain on public finances.

Source: MTI

Event: World Energy Outlook 2008 Launch in Southeast Asia

November 26, 2008
9:30 am	to	11:30 am

Speaker: Mr Nobuo Tanaka, Executive Director, International Energy Agency

Venue: Casuarina Room, Shangri-La Hotel, 22 Orange Grove Road, Singapore 258350

The Executive Director of the IEA will outline key data and policies from the 2008 edition of the World Energy Outlook (WEO), including new energy projections to 2030 (by region and by fuel type), and key issues such as prospects for oil and gas production, and post-2012 climate scenarios. Details and registration is available here.

Does Singapore need a Ministry of Energy?

The New Paper ponders recently on whether Singapore needs a new Ministry of Energy to tackle energy issues more holistically and ensure our future energy security. The article says that “energy security lies in a muddy middle zone” and “there’s no one body fully in charge”. It also suggests some ideas on what a Ministry of Energy can do, such as:

• Buy our own oil field
• Buy overseas farms to grow food
• A law to set a minimum temperature in Singapore offices
• Forge closer relations with oil-producing countries

The government’s energy policies on energy conservation, energy efficiency, energy market regulation and energy industry are pursued by the different relevant ministries and agencies. This is understandable as energy issues are often complex and cut across different sectors and industries.

Nevertheless, the government recognises the need to have an integrated approach to dealing with energy and has outlined six strategies in the National Energy Policy Report. One of the strategies is to develop whole-of-government approach to energy policy which is led by the Energy Policy Group (EPG). The EPG consists of representatives from the:

• Ministry of Trade and Industry (MTI);
• Ministry of Finance (MOF);
• Ministry of Foreign Affairs (MFA);
• Ministry of the Environment and Water Resources (MEWR);
• Ministry of Transport (MOT);
• Agency for Science, Technology and Research (A*STAR);
• Building and Construction Authority (BCA);
• Economic Development Board (EDB);
• Energy Market Authority (EMA);
• Land Transport Authority (LTA); and
• National Environment Agency (NEA)

The EPG has four working groups on Economic Competitiveness, Energy Security, Climate Change and the Environment, and Energy Industry Development, headed by the different agencies shown in the diagram below:

So, do we need a Ministry of Energy? On paper, it seems that there is no need for one as the energy policies are managed and coordinated by the EPG. But on the ground, the administrative difficulties and layers of bureaucratic red tape accumulated across 11 ministries and agencies in the EPG might pose a problem to the effectiveness and timeliness of the energy policies. We think that it might be better to have a Ministry of Energy which is accountable and focused, to ensure energy security and tackle the threat of climate change.

Source: The New Paper; National Energy Policy Report. Image: National Energy Policy Report.