Speech By Dr Balaji Sadasivan
Minister of State of Health and the Environment

At the Plenary Opening Session of the World Energy Council Asia Pacific Regional Forum
26 FEBRUARY 2003, 9.10 AM AT SUNTEC CITY CONVENTION CENTRE, ROOM 203

Mr Edwin Khew
General Chair of the WEC-APF Advisory Committee

Mr Shige-etsu Miyahara
Vice-chair, WEC Asia Pacific

Dato Sri Lim Haw Huang,
President, Shell Oil Products – East

Ladies and Gentlemen

I am pleased to be here this morning for the opening of the plenary session of the World Energy Council Asia Pacific Regional Forum.

The production and consumption of energy from fossil fuels have come under critical international scrutiny because of the threat of global climate change from increasing greenhouse gas concentrations in our atmosphere. A global call for drastic reductions in energy consumption to deal with this threat would be simplistic and one-dimensional. Such a blunt strategy applied across the board would have a very deep impact on many economies because energy is a vital resource for economic growth.

There is mounting debate whether the link between growth and increased energy use can ever be broken. The fact is that many cannot do with less energy and will probably need more in the future.

How then do we in the first instance improve our lot while also embracing the new sustainability agenda? How are we to reconcile on the one hand our requirement for more energy for the betterment of our lives, and on the other hand, our need to confront and deal with the threat of global climate change?

A first and important step is to transform the way we view carbon, not as a regrettable emission, but as an important economic input to achieve other consumption possibilities. This means that we view carbon as an important production factor just as land, labour and raw materials. We implicitly alter the way we view the trade-offs that we will make. In other words, we mitigate the required decrease in carbon consumption by increasing its output in terms of goods and services, and consumption possibilities, that is, we strive to improve carbon resource efficiency. Seen in this light, businesses should welcome the focus and the opportunities coming out of the climate change challenges and not see this aspect as a measure that costs money.

Singapore is totally dependent on fossil fuels for all its energy requirements. Being an export-oriented manufacturing base, our economy also depends on reliable and low cost electrical power.

Since the beginning of this year, the New Electricity Market came into effect and electricity generators are required to sell electricity through a competitive bidding process. In anticipation of this competition, the generators have, over the past several years, sought greater generation efficiencies to maintain their commercial viability. Most have opted to switch to natural gas and combined cycle generation technologies.

For example, the latest combined cycle plant in Seraya Power Plant has achieved an efficiency as high as 56% compared to about 39% for steam turbine plants. This translates to an efficiency improvement of more than 40%. We expect the improvement in carbon efficiency to be much higher because of the use of natural gas.

Singapore has set a target of 60% electricity generation from natural gas and are modestly confident that this target will be achieved over the next ten years. One preliminary conclusion that we can draw from this initial experience is that a make over of the rules of the game to introduce competition can help directly to achieve a higher carbon efficiency in the generation sector. While competition improves generation efficiencies and drives down energy prices, we need to maintain our vigilance against energy wastage and inefficiencies by energy users.

Energy efficiency is a compelling argument for achieving sustainable development. By embracing efficiency, we reduce the need for investment in new infrastructure, cut fuel costs, and increase the competitiveness of our businesses. We, therefore, need to push energy conservation up the business agenda and drive home the message to managements that improving energy efficiency not only enhances their companies’ environmental credentials, but also saves money too. For this, we need campaigns to inform, enlighten, inspire and educate consumers, decision-makers, architects, engineers, managers, and developers.

The National Energy Efficiency Committee (NEEC) which I chair is stepping up efforts to promote industry-led initiatives to set and meet energy and environmental goals, so as to raise the profile of environmental issues in corporate decision-making and to give participating industries the flexibility necessary to achieve these goals.

The NEEC had launched an energy audit scheme for large consumers of energy last year. The initial results suggest that the more active companies are on the road to achieving good results and will save substantial sums of money in the process. The NEEC will expand the coverage of this scheme by co-opting industrial associations. They should set objectives and benchmarking criteria to enable performance comparisons, establish efficiency improvement targets for their members and motivate managers to develop internal energy management programmes.

The engineering component is very important, and it is a key factor, which defines professional energy management. The NEEC will develop the necessary infrastructure to assist managers to upgrade their knowledge and competence levels by providing training, tools and proven strategies so that they can design internal energy management programs that work.

Most companies, however, may not have the time, expertise or resources to tackle the intricacies involved in securing higher efficiency through better energy management. These companies should seek the assistance of professional service providers such as energy management companies and energy service companies.

The lack of credible, unbiased information with regard to the capabilities of such service providers often inhibits facilities managers from selecting this option. The NEEC will look into whether this can be remedied through an accreditation scheme.

The reduction of greenhouse gas emissions is expected to be a major long-term policy concern. We should, therefore, do what is best for the long term, even if it is not necessarily the easiest path in the short term. There are no simple solutions and there are many challenges facing us. But there are many encouraging success stories and opportunities.

I understand that there are companies and national representatives from seven Asian countries as well as from Australia, Canada, France, New Zealand and the United States. This Forum is a timely opportunity for us to compare notes and learn from each other’s experiences and programmes.

I wish you a successful forum and thank you for inviting me to participate in the Opening of the Plenary Session.