My speech on Energy Conservation Bill, 9 April 2012

 Mr Speaker, the Energy Conservation Bill aims to bring about a 35% improvement in our energy intensity by 2030 and to improve the energy performance of our companies in the industry and transport sectors.


Sir, I welcome this Bill. As a developed nation, we should be more energy efficient, both for the purpose of allowing our companies to become competitive globally as well as to signal our commitment to good use of a scarce global resource.


The Bill sets out the minimum energy management standards. This includes the appointment of energy managers, reporting of energy use and submission of energy efficiency improvement plans for large users of energy. I noted that the Government recognises that these are “minimum” standards, which implies that it is aware that more needs to be done and companies can be encouraged to do more. I like to point out some implementation matters for consideration as well as to offer suggestions on what more can be done.


First is in the area of energy management practices. We are generally supportive of making energy management plans mandatory for heavy energy users. There are however potential issues concerning governance that we anticipate with the proposed energy management practices.


The Bill gives extensive flexibility to the Director-General and to the Minister to subsequently introduce by-laws, regulations and standards via gazette. The Minister is empowered to gazette by-laws, but no guidelines have so far been given. It is left to the subsequent discretion of the Director-General.


Therefore, I like to ask theMinisterto give more indications of the by-laws, regulations and standards the ministry intends to gazette, so that Parliament can debate these. What guidelines do the ministry intend to use? Can theMinistershare the time-frame guidance on when the by-laws may be gazetted? I believe these are necessary to prevent inconsistency in the implementation and enforcement of the proposed Bill.


Drawing a parallel from the practices in the building industry, there are the Building Control Act or BCA and Building Control Regulations, or BCR. The BCA and BCR have been in use for more than 20 years in Singapore and are very detailed. Does the Minister anticipate that the by-laws, regulations and standards will take a form like that of BCA and BCR?


Second is in the area of the Energy Managers that large companies must now employ and auditors to monitor for compliance. We noted that there have been recent prog-rammes which are supported by E2Singapore and EDB to train auditors and energy managers. How many have been trained and how sufficient are these programmes to ensure that there will be sufficient qualified officers to fulfill our needs? Are there guidelines on the qualification and experience of such Energy Managers?


Third, I like to cover an area I believe will be increasingly important for both Singapore and for the world; which is renewable energy. I think a gap in the Bill is that it does not seek to promote renewable energy. A comprehensive energy conservation effort must include renewable energy as a component. South Korea is aiming for 11% share of renewables in total energy consumption by 2030. Another heavy energy consumer country, Belgium, is aiming for 12% share of renewables for electricity suppliers in 2012. Japan, the energy intensity of which is comparable to the EU, is aiming for 10% by 2020. Denmark, already a leading energy efficient country in the world, is aiming for 13% by 2020.


According to statistics from Singapore’s Energy Market Authority, in 2010, 79% of electricity in Singapore is produced from natural gas, 19% is from petroleum products (i.e. fuel oil and diesel) but only under 3% is from renewables.


This gap is made more pronounced by the fact that our National Climate Change Strategy commits Singapore “to do our part in the international effort to address climate change”. We have promised to play our part by “improving the energy efficiency of our major energy sectors, namely power generation, industries, transport, buildings and households” and “to the global research effort on climate change and energy technologies”, particularly solar energy and green buildings. The Strategy states, “The objective of our research efforts … is to improve the current state of technology, and to bring down production costs to a level that would make large-scale adoption commercially viable”.


The Government is conscious of the need to signal to the international community our national commitment to the international climate change effort. The factsheet in this Bill concludes, “Establishing energy efficient standards across sectors under an Energy Conservation Act will also send a strong signal to external parties that Singapore is serious in undertaking mitigation actions to meet its international responsibilities”.


Therefore, I like to know the progress of our development in using more renewable energy. What are our current plans to significantly increase the use of renewables? I like the Government to be more proactive to signal to the international community of our commitment to international efforts to address climate change by setting a target share of renewables in total energy consumption to be achieved by a specific year. Using the four benchmark countries’ targets as reference, how far can we push for a target of say 10% share of renewables in total energy consumption by 2030.


Lastly, I like to cover another area which I feel can be promoted more aggressively to drive energy conserveration practices, which is having an integrated system of financial incentives and disincentives. A comprehensive energy conservation policy, especially for a liberalized energy market such as in Singapore, should include such a financial system to support volunteer agreements with corporations on energy efficiency targets.


In terms of financial systems, the developed world could be divided into three zones: EU and UK, AAC (America, Australia, Canada) and Asia (Japan, Korea, Singapore). AAC offers both financial assistance to promote energy management and tax incentives to encourage achievement of energy efficiency targets. EU and UK use carbon emission market “cap and trade” to promote energy efficiency, but individual countries use a variety of other instruments, including financial assistance, tax incentives, and green taxation. Asian countries, including Singapore use only financial assistance.


We can look more aggressively at using tax and cash incentives to encourage the achievement of energy efficiency targets set for different industrial sectors in consultation with stakeholders. Currently the energy efficiency initiatives of E2Singapore are mainly support schemes for implementing programmes.Only the Greenmark scheme gives out cash incentives for hitting targets. I am interested to know how effective Greenmark has been, and if effectiveness of all our schemes have been indexed and tracked. I am also interested to know the utilisation rate of existing schemes listed in E2Singapore and if the Minister thinks these have been effective in promoting energy efficiencies.


Calling current assistance schemes as “incentives”, is also a misnomer as they do not really measure actual achievement of targets. Besides current support schemes, I hope the ministry can look at providing real incentives for hitting energy efficiency targets.


My colleague the Hon. Member Gerald Giam will elaborate further on suggested taxation and incentive schemes that can be considered.


In summary, I support the Bill in its intent to bring about a more energy efficient Singapore. I hope the implementation issues and other suggestions that I have raised can be considered by the Minister to more aggressively set the pace for Singapore to be a global leader in energy conservation and energy technology.


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