1. 24 Jan 2008

2. What is Energy Policy?ECONOMICS ENVIRONMENT ENERGY SECURITY

3. The Changing Energy Landscape Economic Competitiveness Energy Security Environment / Climate Change New Opportunities

4. Re-Emergence of Energy Security Strong demand Increasing cost of production Political risk Narrowing of supply- demand gap Energy Investments

5. Energy Security in Singapore Singapore’s Crude Oil Imports (2006) Source: IE Singapore Singapore’s Electricity Fuel Mix (1H2007) Source: EMA

6. The Emergence of Climate Change  One of the greatest environmental challenges the world is facing  Rising global temperatures, sea levels and extreme weather events  Global CO2 emissions are projected to continue to increase  Global solution is needed

7. No Silver Bullet  Strong growth in renewable energy, but contributions still small  Nuclear  Fossil fuels will still contribute around 80% of global energy supply  Improve efficiency  Clean use of fossil fuels  Carbon sinks Global Primary Energy Supply Source: International Energy Agency MTOE 2004- 2030 CAGR 1.8% 6.6% 1.3% 2.0% 0.7% 2.0% 1.3%

8. Climate Change and Singapore  Singapore is also vulnerable to climate change, eg. coastal land loss, impact on trading routes  Singapore accounts for only 0.15% of global CO2 emissions  Export-oriented economy; major international air/sea hub  We cannot volunteer to reduce emissions at the cost of economic growth  Will do our share fair as part of collective global effort  Comprehensive National Climate Change Strategy

9. Establishment of Energy Policy Group Energy Policy Group Economic Competitiveness (MTI) Energy Security (MFA) Environment / Climate Change (MEWR) Industry Development (EDB)

10. National Energy Policy Framework: Energy for Growth Economic Competitiveness EnergySecurity Environmental Sustainability STRONG AND SUSTAINED ECONOMIC GROWTH Manage Trade-Offs Exploit Convergence

11. Energy Policy Group: Six Key Strategies 4. Develop Energy Industry and Invest in Energy R&D 3. Improve Energy Efficiency 2. Diversify Energy Supplies 5. Step up International Cooperation 1. Promote Competitive Markets 6. Develop Whole-of-Government Approach

12. Vibrant and competitive electricity and gas markets Strategy 1: Promote Competitive Markets  Competitive markets to help keep energy affordable  Electricity Vending System to enable full retail contestability  Encourage the market to innovate  Correct for market failures Electricity Vending System

13. Strategy 2: Diversify Energy Supplies  Energy diversification to protect against supply disruptions and price increases  Avoid becoming overly dependent on any energy supplier  In competitive markets, companies have incentives to diversify  Government’s role is to create an open and flexible framework that allows diversification  But specific policies may still be necessary at times when market does not provide for sufficient diversity Import of LNG by 2012

14. Facilitating Introduction of New Energy Technologies  Research and development  A*STAR’s Energy Technology R&D Programme  SINERGY Centre  National Research Foundation $170m  Test-bedding and demonstration  $17 m Clean Energy R&D and Testbedding Programme (CERT)  $5 m Market Development Fund  Reducing costs and facilitating grid connection  Reduce cost of plugging into grid and participating in the electricity market  Publication of “Handbook for Photovoltaic Systems”

15. Keep Our Energy Options OpenCoal Cost competitive Pollution controls CO2 emissions Ash disposal Hydroelectric, geothermal & wind Cost competitive and clean But not available or viable in Singapore Solar Clean, plenty of sun in S’pore But high cost and intermittent supply are key constraints Biomass & waste-to-energy Cost competitive and clean Limited potential Nuclear power Stringent site requirements Need for long term solution for disposal of nuclear waste

16. Strategy 3: Improve Energy Efficiency  Using energy more efficiently can reduce our dependence on imports and enhance our security  Also reduces carbon intensity, air pollution and business costs  Establishment of Energy Efficiency Programme Office, led by NEA  Development of comprehensive national energy efficiency plan  Sectoral approach – power generation, industry, transport, buildings and household sectors Intelligent Lighting Tri-generation System Smart Meters

17. MARKETS Transport Power Industry Building Deliver Energy Solutions Fossil Energy Non Fossil Energy Oil Gas Coal SolarFuel Cells Biomass WindOthers Strong technology foundation SECURITY CLIMATE CHANGE URBAN- ISATION ECON GROWTH Integrate Grid Management Test & Integration Trade (fuels, carbon) Energy Services DRIVERS Strategy 4: Build Energy Industry and Invest in Energy R&D

18. Solar OilBiomassH 2 /Fuel Cells Widen our Lead in Oil and Develop New Verticals Gas

19. New R&D Programmes EDB’s Clean Energy Research & Test-bedding Programme A*STAR’s SINERGY Centre A*STAR’s Energy Technology R&D Programme NRF’s Clean Energy Programme

20. Strategy 5: Step up International Cooperation  Promote regional and international energy cooperation to further our energy interests  Promote security of vital energy sea lanes in the region  Promote Singapore as a centre of energy research and excellence

21. Strategy 6: Develop Whole-of-Government Approach to Energy Policy Energy Policy Group Economic Competitiveness (MTI) Energy Security (MFA) Environment / Climate Change (MEWR) Industry Development (EDB) MTI Energy Division Clean Energy Programme Office Energy Efficiency Programme Office

22. Thank You