Singapore and renewable energy

Official Name: Republic of Singapore.

Summary: As one of the most highly industrialized and urbanized economies in southeast Asia, Singapore is positioning itself to become a regional hub for carbon players and clean technology developers.

Singapore is a city-state island located off the southern tip of the Malay Peninsula. Its population reached an estimated 6,028,459 people in 2024, of whom 100 percent had access to electricity through a unique grid. Singapore is a net energy importer, as it owns no natural oil or gas resources. However, it ranks nineteenth worldwide in the production of refined petroleum products. With the lack of space and renewable resources, renewable energy (RE) options remain more expensive and less viable than fossil fuels. For this reason, Singapore is reliant on fossil fuels to meet its energy needs, making it difficult for RE to develop in the country. Despite these constraints, the National Climate Change Secretariat has identified solar energy as a potential source of electricity. Government incentives relate primarily to research and development, green buildings, water and environmental technologies, green transport, waste minimization, environmental initiatives, the Kyoto Protocol’s clean development mechanism (CDM), green information technology, and, most of all, energy efficiency (EE). These are the areas considered by the government of Singapore as having real potential to make Singapore greener.

Government Developments

The government of Singapore has especially acknowledged the need for EE as a cost-effective means of improving the country’s economic competitiveness, energy security, and environmental sustainability while reducing business costs, pollution, and carbon dioxide-equivalent (CO2e) emissions. Nevertheless, studies (such as ReEx Capital Asia’s 2010 Market Feasibility Report for Assessing the Need for an Energy Efficiency Fund in South-East Asia) show that Singapore is one of the three Southeast Asian countries with the most attractive market profitability for EE projects and one of the four Southeast Asian countries with the fastest return on investment for EE projects.

In order to drive these EE developments, the Ministry of the Environment and Water Resources (MEWR), responsible for climate change and environmental policies including EE, set up the Energy Efficiency Programme Office (E2PO) in 2008. A multiagency committee, it is led by the National Environment Agency (NEA) and the Energy Market Authority (EMA), which developed a comprehensive EE plan called Energy Efficient Singapore (E2Singapore).

Action Priorities

The E2PO identified the following areas as priorities for action in developing an EE strategy for Singapore: promotion of EE technologies and measures, building capability, raising awareness, and supporting research and development. Therefore, the NEA put in place several EE initiatives aimed at promoting EE among both businesses and the private sector.

One of them is the Energy Efficiency Improvement Assistance Scheme (EASe), directed at manufacturing companies and building owners and operators. The EASe requires relevant companies to engage with specialist energy services companies (ESCOs) in order to carry out a detailed audit of their energy situation and identify specific measures for EE improvements. Under that scheme, the Singapore Post Centre saw its chiller plant system efficiency improve, resulting in $1.2 million in savings per year.

Additionally, NEA conducted the Pilot Energy Saving Project for Public Sector Facilities. As an equivalent of the EASe for the public sector, the project aimed to achieve EE improvements through the development of energy-saving performance contracts for public-sector buildings and facilities. This program showed good results as well: the MEWR’s environment building itself went under energy savings measures, allowing $55,000 in annual savings.

Overall, NEA’s initiatives helped reduce Singapore's annual CO₂ emissions to 241.71 million metric tons by 2022. Furthermore, Singapore’s energy intensity (the measure used globally as an indicator of a country’s state of energy efficiency) improved by 28 percent between 2000 and 2021, thanks to the implementation of more efficient technologies in power generation and more rational energy use.

After the initial success of NEA's initiatives, the Sustainable Singapore Blueprint was developed in 2009 under the E2Singapore scheme. It set a target of achieving a 36 percent energy intensity improvement by 2030. To that end, starting in 2013, the government of Singapore introduced mandatory energy management requirements for large energy users (those consuming more than 15 gigawatt-hours) in the industry sector. These measures were developed under the planned Energy Conservation Act. In 2017, the National Environment Agency announced enhancements to the Energy Conservation Act.

Government Incentives

The government of Singapore also introduced a series of EE incentives in order to support the development of EE projects in the country. One of the major measures for industry included an investment tax allowance scheme to encourage companies to invest in energy-efficient equipment. Additionally, a design for efficiency scheme was developed for large energy consumers, aiming to integrate EE into the design steps of projects. Moreover, the government developed the Grant for EE Technologies (GREET) program in 2008, encouraging industrial owners and operators to invest in energy-efficient equipment and technologies. Among the other EE grants made available were audit grants, investment grants, and new facility investment grants.

Finally, a tax incentive for energy-efficient equipment was developed under the Income Tax Act, including solar heating or cooling and solar energy collection systems. All costs directly related to an EE project falling into one of these categories (except for consultancy work) are now eligible for accelerated tax allowances.

Singapore’s lack of RE resources, land restrictions, lack of information and capability, and reluctance on the part of the government to grant direct subsidies are the main barriers to investment in renewable power generation. However, further steps can be taken to scale up research and development, as well as financing options and clean energy incentives. While Singapore’s regulatory capacity is highly developed and clear progress has been made in relation to various sectors, such as EE, there is still more that can be done in the clean energy sector to diversify Singapore’s power supply and reduce its emissions so as to guarantee its future energy security. In the 2020s, Singapore's government focused much of its energy policy efforts on increasing solar photovoltaic (PV) capacity and reducing greenhouse gas emissions.

Bibliography

“Singapore.” CIA World Factbook, 30 July 2024, www.cia.gov/the-world-factbook/countries/singapore. Accessed 7 Aug. 2024.

“Singapore.” International Energy Agency, 2024, www.iea.org/countries/singapore. Accessed 7 Aug. 2024.

“Singapore - Country Commercial Guide.” International Trade Administration, 5 Jan. 2024, www.trade.gov/country-commercial-guides/singapore-energy. Accessed 7 Aug. 2024.