Second Reading Speech by Minister for the Environment and Water Resources Dr Vivian Balakrishnan on the Energy Conservation Bill in Parliament

Mr Speaker, Sir, I beg to move, “That the Bill be now read a Second time.”

The Energy Conservation Bill, or EC Bill in short, seeks to introduce mandatory energy management practices for large energy users in the industry and transport sectors, and to consolidate legislation on energy efficiency under one Act.

The Imperative for Resource Conservation
Sir, we are entering a future of high resource prices and increased economic and environmental risk. The exploitation of low priced natural resources has underpinned much of our global economic development in the 20th century. However, there is now a soaring global demand for resources due to rapid economic development in emerging markets. Furthermore, the difficulty and cost of finding and extracting new sources have also been increasing progressively.

According to a 2011 McKinsey study on resource productivity, the past 10 years have wiped out, in real terms, all price declines that occurred in the previous century. Old input-driven business models that benefited from low resource prices will confront a test of survival. Consequently, private and public sector institutions need to make resource productivity a higher priority and prepare for a resource-constrained future.

In a global economy that faces greater resource scarcity, companies, consumers and countries that break with old patterns and take the lead on resource efficiency will strengthen their competitive and economic position. This is certainly true for energy.

Mandating Energy Management Practices in Singapore
Singapore imports all our energy needs to fuel our economy. The more we grow, the more we need to think of conserving energy and using it efficiently. Otherwise, we will pursue an ultimately unsustainable growth path. Today, countries face a stark choice – to compete aggressively for finite resources – this is not a viable option for a small city state with no natural resources like ours – or to advance towards a more energy efficient economy and more sustainable pathways to prosperity.

For Singapore to continue being prosperous and secure, we must learn how to get more power, mobility, lighting, heating and cooling from less energy. We must minimise wastage. We need to focus the minds of corporations and citizens on building and achieving breakthroughs in energy efficiency through more rigorous energy management practices. This has to be a national effort.

Thus far, Singapore’s efforts on improving energy efficiency have been focused on raising awareness, building capabilities and incentivising the adoption of energy efficiency practices. Much more can be done. Findings from industry consultations and benchmarking studies carried out by MEWR and NEA show that energy management varies substantially among companies in Singapore, with some managing their energy consumption better than others.

Mandating energy management practices under the Energy Conservation Act will focus management attention of large energy consuming businesses on proper energy management. It will complement existing incentive schemes and capability building programmes, such as the Grant for Energy Efficient Technologies and the Singapore Certified Energy Manager Training Grant. The resulting best practices, technologies and processes will subsequently cascade down the economic chain to smaller enterprises. Similar energy management practices are already mandated in countries such as Japan, South Korea and China.

Key Features of the Bill
Sir, let me highlight the key features of this Bill.

First, the respective Ministers in charge of the industry and transport sectors will be empowered to Gazette the corporations or class of corporations that have to comply with the energy management practices set out in the Act. We intend as a start to require all large energy users in the industry and transport sectors that consume more than 15 gigawatt-hours of energy equivalent each year or 54 terajoules of energy to (i) appoint an energy manager, (ii) monitor and report energy use and greenhouse gas emissions, and (iii) submit energy efficiency improvement plans. Large energy users in the industry and transport sectors were consulted by MEWR, MOT, NEA and EDB on the energy management practices to be mandated. In Dec 2011, the draft EC Bill was released for consultation and subsequently revised to incorporate feedback received. MEWR and MOT, together with our statutory boards will continue to engage stakeholders on the implementation details of the Bill.

Second, the Mandatory Energy Labelling Scheme (MELS) and Minimum Energy Performance Standards (MEPS) for household appliances, as well as the Fuel Economy Labelling Scheme (FELS) for passenger cars and light goods vehicles under the Environmental Protection and Management Act (EPMA) are going to be consolidated under the EC Bill. Energy-efficiency related measures for the building sector will continue to be administered under the Building Control Act for now. However, the energy efficiency-related legislation under the Building Control Act will be incorporated into the Energy Conservation Act subsequently. Consolidating all legislation on energy efficiency in the industry, transport and household sectors under this Bill over time will enable a more coordinated approach to mandating energy efficiency requirements.

Third, the Energy Conservation Act will be jointly administered by MEWR and MOT. The Minister for the Environment and Water Resources will oversee the measures for the industry and household sectors whilst the Minister for Transport will oversee the transport sector measures under the Act.

Conclusion
Energy conservation is an area where we can all make a profound impact. It is a global issue. The policies of governments, operating decisions of local and multinational corporations and international institutions all play a role.

However, the decisions of individuals count too. Collectively, the everyday choices we make at home or the office; and our mode of transport all add up. We also make decisions about energy through the products we buy, how we make and use them, as well as what we do in our spare time. By moving and acting together, we can all make a difference.

This Bill reflects our collective commitment to commence a process that will transform our approach to the use of energy and other resources. It provides a legislative framework to shape more rational energy choices in industry, transport and households, and to encourage a more conscientious consciousness of the energy we consume. It is an important step towards ensuring that we are prepared for an energy efficient future and sustainable development.

Sir, I beg to move.

Source: Ministry of the Environment and Water Resources