Opening Remarks by Minister, Prime Minister's Office and Second Minister for Home Affairs and Trade & Industry S Iswaran at the Singapore Energy Summit

Distinguished Guests

Ladies and Gentlemen

1.Good morning. Allow me to first extend a warm welcome to all of you to the Singapore International Energy Week 2012. Now in its 5th year, the Singapore International Energy Week is an annual confluence of energy related meetings for policymakers, industry players, and thought leaders to discuss key issues and developments in the energy sector. “Shaping a New Energy Landscape”.

2.The theme for this year’s conference is “Shaping a New Energy Landscape”. Countries face the challenge of charting a course of energy security through an uncertain global energy landscape. The urgency and importance of this task is accentuated by several factors – volatility in oil supply and demand caused by geopolitical tensions in the Middle East and cyclical and structural economic factors in the US and Europe; the advent of unconventional gas, especially in the US, and its impact on the global gas market, and other energy sources like coal, nuclear and renewables; and the questions that linger over the prospects for a global agreement on climate change. The challenge for governments and businesses is non-trivial.

3.In Singapore, we have adopted a series of strategies to build on our energy landscape to ensure a resilient and vibrant energy system – by diversifying our fuel sources, increasing competition, enabling consumers to make informed decisions on energy use, and building capabilities.

Diversification
4.A key plank of Singapore’s energy strategy is to diversify our energy sources to enhance our energy security. Our Liquefied Natural Gas (LNG) terminal is on track to commence operations in the second quarter of 2013, and the demand for LNG is already stronger than initially expected. With the development of the terminal, Singapore will be well-placed to diversify our gas supply and tap on the global LNG market. With this initiative, we also hope to catalyse the development of an ecosystem of businesses such as LNG trading, break-bulk services and LNG bunkering, that would bode well for the emergence of a more vibrant LNG industry in Singapore and in Asia. In that regard, I am pleased that the inaugural Gas Asia Summit will be held in Singapore this week, to address opportunities and issues arising from Asia’s increasing demand for gas.

5.The Asia Future Energy Forum will also be making its debut this week here at SIEW. The forum will discuss issues of technology, governance, financing and delivery of clean energy, which are all important elements of a sustainable energy future.

Competition
6.In addition to diversification, the Government is also exploring ways to foster competition in our electricity market. We do this to ensure a vibrant market that keeps prices competitive for consumers. One initiative we are considering is the introduction of an electricity futures market.

7.Futures markets are already well-established for other commodities such as oil and gas. They have also been introduced for electricity in New Zealand, Australia, and the UK. By enabling trade in forward electricity products, a futures market will complement Singapore’s wholesale market and yield several benefits. Firstly, independent retailers will be able to participate in the market by purchasing futures contracts and in turn offering competitive packages to consumers. This will increase retail competition and benefit end consumers. Consumers will also be able to hedge their risks by locking in longer-term prices, while generation companies stand to gain by using the futures contracts to hedge against their fuel price and operational risks during plant outages.

8.The Government is studying the implementation options and I am pleased to announce that we will commence a public consultation on an electricity futures market. We invite the industry’s and other stakeholders’ thoughts on the proposed futures market and welcome your active contribution to this process.

Enabling more informed decisions on energy use
9.The Government is also seeking to improve Singapore’s energy systems to allow consumers to make more informed decisions on energy use. Through the ongoing Intelligent Energy System (IES) pilot, for example, we aim to give households more information, choice, and real-time control over their electricity use. This will allow them to optimise their consumption and electricity bills. We are also conducting a trial to integrate building energy management systems with the grid, which will help companies better manage their energy use and costs.

10.The Government is also enabling our market to be more price responsive to consumer demand. In line with this effort, I am pleased to announce the launch of a consultation process by EMA on incorporating Demand Response as part of the national electricity market (NEMS).

11.Demand Response will allow consumers to participate more actively in the market by curtailing their demand in response to high prices. This can moderate price spikes, lower energy costs, and generate system-wide savings. Consumers who curtail their demand could potentially also share in these system-wide savings and be rewarded for taking action. This concept has been proven in other jurisdictions, and we are keen to hear your views on how we can make this part of Singapore’s market.

Capabilities
12.Beyond these initiatives, there are ongoing research projects and test-beds in many areas, including renewable energy, electric vehicles, and smart grid-related technologies. And, with a rapidly growing energy sector, there will be a need to continue training and developing manpower for the industry.

13.However, Government action is only part of the picture. Individuals and businesses have played, and will continue to play, a key role in developing a strong energy industry for our people and businesses.

14.Hence, we want to acknowledge outstanding achievements of players in the local energy sector. In that spirit, I am happy to announce the launch of the Singapore Energy Award.

15.The Award will recognise organisations and individuals who have made outstanding contributions to develop Singapore’s energy sector by enhancing the energy sector’s capabilities and infrastructure and advancing groundbreaking energy innovation. The Award will be open to players across the spectrum of the energy sector, from the more established power utilities and oil and gas sectors, to emerging sectors such as clean technology and energy efficiency, as well as energy services and consulting companies, and research institutes. The energy sector is diverse and there is scope for individuals, organisations and companies, big and small, to contribute to the dynamism of our energy ecosystem by demonstrating excellence in industry leadership, capability development and technology innovation. I am pleased to announce that the judging panel for the Award will be chaired by an established industry leader Mr Kwa Chong Seng, former Chairman and Managing Director of ExxonMobil Asia Pacific and current Chairman of Neptune Orient Lines. In addition, Professor Bertil Andersson, President of the Nanyang Technological University (NTU), and Dr. Claude Mandil, former Executive Director of the International Energy Agency (IEA), have kindly agreed to serve on the judging panel.

16.EMA will be issuing a press release with more details, and we look forward to receiving your nominations.

17.Allow me to conclude. As a small country almost wholly reliant on imported energy, Singapore has to adapt to the evolving global environment to shape our energy landscape. Diversification of fuels and sources, imbuing competition in our markets, empowering consumers to make informed decisions on energy consumption, and building capabilities for the future – these are key elements of our strategy.

18.The Singapore Energy Summit touches on some of these strategies. You will hear from distinguished speakers who are leaders in their respective fields. A range of topics will be discussed, including options for a future energy mix, energy financing, climate change, and the energy-water-food nexus. These are important issues facing us today, and I trust you will have an engaging time discussing them. Thank you once again for joining us at the Singapore International Energy Week, and I wish you a productive week ahead.