Energy Handbook Singapore

8/4/2019 Energy Handbook Singapore

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P o w e r S u m m i t - T h e E n e r g y H a n d b o o k 2 0 1 1

C o u n t r y P r o f i l eSingapore



C o u n t r y P r o f i l e : S i n g a p o r eP o w e r S u m m i t - T h e E n e r g y H a n d b o o k 2 0 1 1

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Having embraced independencefrom Britain in 1963, Singaporewas briefly part of the Malaysian

Federation before being expelled in 1965.Forty-six years later, this unique memberof the Commonwealth has becomeone of the world’s premier centres forfinance, chemicals and electronics, andexperienced the fastest growth of any

Asian country in 2010, when its economyexpanded by an estimated 14.7%.1

Having been ranked in first place bythe World Bank’s 2010 Ease of DoingBusiness report, Singapore continues toattract investment and its growth hasdiversified into other sectors. Utilisingits geographical location, one of theworld’s busiest ports, and its regulatoryframework, the island country has also

become an energy leader for south-eastAsia. With electricity demand in AsiaPacific expected to grow by 26% by20142, Singapore will continue to play acentral role in energy growth.

Singapore’s small physical size – atotal land area of just 687 km2 – hasposed significant challenges. But while

geography has sometimes been aproblem for industries which want togrow here, an economic system basedon tax benefits, government support,and industry promotion has brought in amultitude of companies specialising in thepower sector.

The past four years have also seen the bi rthof a dynamic renewable energy industry,which benefits from Singapore’s well-

Singapore in Focus

Singapore’s ability to reinvent itself as one of Asia’s economicleaders, following a troubled early history, has continued to

serve as an example of sound economic policy and planning.

Article by:

Jolanta Ksiezniak

and Eugene Yukin

Above: Marina Bay

Sands; Photo by

Jolanta Ksiezniak

1 Singapore Ministry of Trade and Industry

2 Business Monitor International: Singapore Power Report 2010




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developed R&D sector to fuel innovationin green products and technologies.However, the most important cause ofSingapore’s rise as an energy centre hasbeen the immense demand for power,as countries in south-east Asia struggleto find enough electricity to fuel theirburgeoning economic growth.

History and Recent

Developments

Singapore’s power industry has seentwo major trends that have accentuatedits attractiveness for investment in thesouth-east Asian region. Singapore wasone of the first Asian countries to embarkon a market liberalisation path in thelate 1990s, and having once benefitedfrom the experience of other countries,it is currently serving as an examplefor its neighbours who are consideringliberalisation.

Dave Carlson currently runs the Energy

Market Company (EMC), which is chargedwith operating Singapore’s wholesaleelectricity market. As he explains: “I ama New Zealander, and in the southernhemisphere New Zealand was one ofthe pioneers in reforming and liberalisingits electricity industry. When Singaporedecided that it was going to go downa market-based path for its electricityindustry, it looked around to see who haddone this before – and started engagingNew Zealand.”

“New Zealand has a similar marketdesign and similar-sized system,”Carlson continues, “so there were lotsof commonalities there. Starting up new

markets is not the easiest thing to do andso Singapore had to see how they couldreduce risk. There was an agreement toset up EMC as a joint venture betweenSingapore and at that time a New Zealandmarket operator.”

Since competition was introduced intothe market, Singapore has been able toopen up 75% of all electricity consumers.Currently the largest industrial users inSingapore have a choice in their electricityretailer, while the other 25%, representingresidential users, buy their electricity at aregulated tariff.

The Energy Market Authority (EMA), thechief regulator of Singapore’s electricityand gas market, plans to incorporatesmart grid technologies to open up themarket further. “We still hope to openup the market for the small consumers.We think this will be possible because ofthe new technologies that are now beingdeveloped, especially in the area of smartmeters and smart grids,” says LawrenceWong, EMA Chief Executive. “Rightnow, we are doing a pilot to see whatthe technologies can do and whether atthe end of the day it will be worthwhilefor the consumers to pay for thesetechnologies.”

Generation Mix

Singapore’s premier challenge has been infinding secure fuel resources to power itselectricity-dependent industries. Havingno fuel resources itself and little spacefor renewables, Singapore has dependedheavily on gas imports from its neighbours

Indonesia and Malaysia. So far about80% of electricity is generated from gas,with the rest mostly from fuel oil, and atiny amount from renewables and othersources such as waste-to-energy plants.

In an effort to increase energy security,the EMA recently embarked on theconstruction of the country’s first LNGterminal. This will be Asia’s first suchfacility that is able not just to import butalso to re-export LNG.The terminal, which will begincommercial operation in 2013,will increase the fraction of gas inSingapore’s generation mix.

“I think in the near to medium term, we willstill be very much a gas-fired economy,”says Lawrence Wong. “We currently have80% of our electricity generated using gasand with LNG coming into Singapore wewill have even more gas as a proportionof our energy mix.”

However, the construction of the LNGterminal holds the potential to transformSingapore from simply being a leaderin the oil-trading sector to become oneof Asia Pacific’s largest gas tradinghubs. The terminal will eventually beable to handle 6m t/y of LNG. All five

of Singapore’s power generators havealready signed long-term contracts for theuse of LNG. Neil McGregor, who used torun Singapore electricity generator PowerSeraya, was recently appointed CEO ofSingapore LNG Corporation, a subsidiaryof the EMA, and is currently responsiblefor the construction and future operationof the terminal.

As he explains: “When you look at theoil and gas industry, Singapore is in thefirst five of the major traders in the world.The fact that we are now building a gascapability pretty much dovetails with theinfrastructure that’s already here. We arehalfway between supply and demand,with suppliers based in the Middle Eastand Australia, while significant volumes ofthe demand is in north Asia. North Asia isfeeling constrained by the size of the shipsthat they can take – there are a numberof ports in Korea, Japan and Taiwan thatcannot take larger vessels and are thus

missing out on an economic opportunity,but they can take smaller vessels at ahigher frequency. The economic equationwill be: do those countries wish tocontinue building expensive storageterminals when Singapore can do it morecheaply? The construction costs and theinfrastructure that exists here is morediversified than what you will find innorth Asia, which is why we are lookingat Singapore becoming a world premiergas trading destination.”

Privatisation and Major

Players

Another major trend that has demonstratedconfidence in Singapore’s power sectorhas been the privatisation of the city-state’s major power stations in the pastseveral years.

Currently, electricity generation is spreadamong three large players – SenokoEnergy, Tuas Power and Power Seraya– and two smaller ones: Keppel Energyand Sembcorp. Tuas Power was recentlyacquired by China Huaneng Corporation; ithas 2.7 GW of capacity from four naturalgas combined-cycle plants and two oil-fired plants. “The fact that you havemajor players buying the generators hereis seen as a good business case to investin Singapore,” says Lim Kong Puay, CEOof Tuas Power.

All five power entities have retailelectricity subsidiaries and compete with

one another in terms of the tariffs theyoffer to eligible consumers. John Ng,CEO of Power Seraya, believes that thederegulated market structure has openedup competition in more ways than one:“We have experienced what a regulatedmarket is like and we have experiencedwhat a deregulated market is like. I ama firm believer in the deregulated marketbecause it brings about much greaterefficiency – we have seen that happen inSingapore.”




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Despite the limited space to expand,and with the EMA’s efforts to boostcompetition, Singapore’s generatorshave shown resilience by planning aheadand diversifying their activities. SenokoEnergy, for example, is Singapore’slargest generating company, with alicense for 3.3 GW, and is currently

looking within Singapore for opportunitiesin new sectors. “We hope that the cap

on authorised capacity will not be hereforever, although we do understandthat, from the regulatory point of view,there is an interest in gradually reducingconcentration,” says Brendan Wauters,CEO of Senoko Energy. “Even if you onlyfocus on Singapore, it does not meanthat you should only focus on power

in Singapore. That is why I have highhopes for Senoko Energy to become

involved in gas retailing. I still see quitea bit of potential in Singapore and thisis why Senoko will keep focused on theSingaporean market.”

Sembcorp, on the other hand, has plansto grow further outward into the region.As one of the smaller generators inSingapore, Sembcorp recently receiveda licence for an additional 900 MW ontop of the 785 MW that it already has. Apioneer in clean energy power generation,Sembcorp was the first company tointroduce cogeneration to the local market,but Ng Meng Poh, Sembcorp’s ExecutiveVice President, Singapore and ASEAN,sees his company expanding abroad.“Sembcorp’s playing field is not restrictedto Singapore. We are already in the UK,China, UAE and Vietnam power market,and have power plants in India and Omanin development,” he says. “We continueto look for further opportunities to growthe business and are open to looking atother opportunities in the region.”

New Entrants

The liberalisation of the power sector hasopened up opportunities for newer playersto come into the market. Island Power,which was acquired in 2009 by India’sGMR Infrastructure, is now planning tostart construction of an 800 MW gas-firedpower plant on Jurong Island, home tothe majority of Singapore’s manufacturingand processing industries. With a planned

cost of S$1.25bn, the Island Powerproject will bring substantial foreigndirect investment (FDI) into Singapore’sinfrastructure.

After Island Power received its generationlicence back in 2002, the project raninto severe challenges when it could not

arrange to import the necessary gas fromIndonesia. InterGen, which was runningthe project at the time, decided to sellit to GMR and since then things haveproceeded quickly. “Singapore is a verysecure environment and our shareholdersfelt very comfortable because of the legaland social systems in place here,” saysNg Quek Peng, who currently serves asGMR’s head for the region. “There isdefinitely a demand here for electricityand it is growing. This is GMR’s firstgreenfield power plant outside of India.Singapore is a very good place to start,and from here we will be looking at otherpower plant projects in south-east Asia.”

Island Power’s success owes a lot togovernment support. When it comes tothe domestic power sector, the EMA andother agencies play the leading role ininviting companies to Singapore, and inmaking the move as smooth as possible.“The Singapore government agencies havebeen very efficient, and more importantlythey have been very transparent. Themore we deal with Singapore agenciesthe more comfortable we feel about ourinvestment here,” says Ng Quek Peng.

Q – With only a handfulof large players inSingapore’s powerindustry, entry intothe market here ischallenging. Pleaseintroduce us to thecurrent market structureand EMA’s efforts tomake it more competitive.A – We currently havefive power companies

in Singapore, three big and two small. The sixthcompany to come in is Island Power, which isbuilding an 800 MW plant. The three big onesmake up about 80% of our generation capacity, soit is not an entirely competitive market – there is alarge concentration of market power. One initiativethat the EMA has taken to boost competition is tocap the licensed generation capacity of the threebig players. Beyond that, our strategy is to keepthe market open, to minimise the barriers to entry,and if demand grows, to encourage the smallerplayers to extend their capacity or to welcomenew entrants into the market. We facilitate thisby providing as much information as we can.That is why we publish every year a Statement of

Opportunities for the energy market, demonstratinghow much demand and how much supply therewill be. One of the key constraints in Singaporeis land, but we have certain parcels of landspecifically earmarked for power generation andwe provide that information to those investors whothink there is an investment opportunity here.

Q – Due to its excellent business environmentratings, Singapore has become a hub for manyrenewable energy companies as a centre for R&D.What steps is EMA taking to keep Singapore asan attractive destination for renewable energycompanies to come and set up base here?

Interview with Lawrence Wong,Chief Executive, Energy Market Authority

A – There are two different aspects to thisquestion. One is whether Singapore is attractivefor renewable companies for the deployment ofrenewable energies. In this respect we have toaccept the practical reality that we are not a verybig market for renewable energy and we do nothave the potential for renewable energies. Solar isone that has some promise, but solar is still moreexpensive than electricity from the grid.We do not have a feed-in tariff, and we do notthink that the feed-in tariff is a good policy, sinceit is a subsidy for renewable energy and it distortsthe market. However, we encourage any companyto put up their solar PVs here and they are free todo so.

Separately, Singapore still offers somethingmeaningful to the renewable energy industry, notas a market for investors but rather as a hub forcompanies who wish to be based here, to establishtheir manufacturing operations here and work inclean-tech and renewable energies. We are quiteattractive as a regional hub serving south-eastAsia and the broader Asian region because wehave good infrastructure, skilled manpower, anda strong intellectual property regime. These areour competitive strengths and advantages and this

gives us the capability to attract companies toSingapore. This strategy has worked quite well andwe have grown the clean-tech sector by havingmore companies coming here to work in the areaof biofuels, solar and wind.

We welcome and encourage internationalcompanies to make use of Singapore as what wecall a “living laboratory”. We are a small market– you might not be able to deploy everything inSingapore – but if you have an interesting andinnovative product, then come here, test-bed yourproduct and use Singapore as a launching pad tomarket your product or application to the region.




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Transmission and

Distribution

While Singapore took the decision toliberalise electricity generation, thetransmission and distribution network hasremained in the hands of Singapore Power,a leading utility company which owns

and operates all of Singapore’s electricityand gas network. “While our business isregulated, we run as a corporate entity,always seeking to enhance our operationsthrough innovation and rigorous qualityprocesses,” says Sim Kwong Mian,Managing Director of SP Power Grid,which manages and operates Singapore’selectricity grid. And certainly SingaporePower has been able to constructone of the world’s most efficient andsophisticated underground power grids.While south-east Asia in general suffersfrom imperfect grids and power cuts,Singapore is distinguished by the reliabilityof its power supply. “The nature of theindustry is one where expectations for

quick delivery are very high and constantlyincreasing,” says Sim. “The multinationalcompanies that set up base in Singaporerequire a quick start to their operationsand the first thing they need is the speedydelivery of our services. To manage suchhigh expectations, we are always pushingourselves to deliver in shorter periods of

time. “Over the past years one of ourchallenges has been to design the grid insuch a way to prevent any interruptionsin electricity supply and also to minimiseany risk of a voltage dip. As a result wehave built up one of the best transmissionand distribution systems in the world.”

The age of the Singapore grid hasnecessitated renewed investment in theconstruction of new cable tunnels, both toreplace old cables and to further expandthe grid. In what is expected to be a verycostly investment, the next six or sevenyears will see the construction of large-scale tunnels below Singapore to carrymore-efficient transmission cables.

Q – How important isAsia for MTU’s powerproducts?A – We have seentremendous growth inour power business in thelast couple of years, andthis looks set to continueinto the future. Currentlyabout one third of ourrevenues in Asia comefrom our products to the

power generation industry. The demand for powerin Asia and the region is very high, so we have a

strong position here.

Q – What have been some of the recent projectsthat MTU Asia has been involved with in theregion?A – MTU Asia Singapore has become the hubfor the whole region and thus we engage witha variety of countries. For example, we recentlylaunched an office in India, which was officiallyopened in February 2011. India is a very importantmarket for us in power generation so we arebuilding up our presence there. We are alsoconstantly improving our distribution network andincreasing the number of our dealers with respect

Interview with Hermann Roehm, Director, MTU Onsite Energy

to our diesel and gas generator sets.

Q – Competition in this region is very high for theprovision of power generators. How do you ratethe levels of competition here and what is MTUAsia’s competitive advantage?A – Of course MTU Asia operates in a verycompetitive market, but our biggest advantageis that we develop all of our engines with thebest and most up-to-date technology. We area technology leader here, not only for powergeneration but for all our products, and especiallywhen it comes to fuel oil consumption. This isvery important for any continuous applications,

where the major cost driver is the amount of fuelyou consume. If you could save 5–10% in fuelconsumption, then the customer is already verysatisfied.Q – How do you see MTU Asia’s role developing inthe region?A – Our key mission is to develop and provideour customers with very reliable products usingcutting-edge technology in the area of powergeneration. We are also focusing on new marketsand our customer base, and we are looking intolong-term partnerships with those customers whoneed our technology to operate their power plantssafely and more effectively.

International Power

Market

With electricity demand expected toballoon in Asia, there has been anincrease in Singaporean companiesplaying a role in power plant constructionin the region, as well as an influx of

major international power players likeWärtsilä, Siemens and GE.

The presence of companies who specialisein gas, diesel and combined-cycle plantsprovides countries in the Asia Pacific withthe opportunity to choose a power plantmost applicable to the local market.

Colben EnergyThe emergence of smaller Singapore-based power plant companies is anothertrend, as an ever-increasing number ofcompanies have realised the potential ofentering the power industry. As a powerplant constructor and operator in thesouth-east Asian region, Colben Energy

currently operates fossil-fuel, hydroand biomass power plants in Vietnam,Cambodia and Malaysia. Diversifying fromits original business in fire protection,the company ventured into the powerbusiness and most recently has beentargeting renewable energies.

Colben Energy positions itself as a smallerplayer, but one which has the uniqueexperience of working in countries whereother companies are afraid to go.

George Tan, CEO of Colben Energy, revealswhere his company has an advantage:“The countries where we work are frontiercountries, and they are very challengingmarkets. Most companies are notattracted to come there and bid for powerplant projects since there are concernsabout these countries’ infrastructures, the

political risk, and the ability of customersto pay. These countries demand directnegotiations; they set the parameters andask you to put your proposal forward. Ifthe company is granted approval, it cannegotiate. This is where Colben Energysteps in, because we have the experienceof working in those countries and knowhow to make the best deals for ourclients.”

Looking ahead, Colben Energy plans tocontinue its expansion into the region witha renewed focus on renewable energyprojects. Having learned that the key tosuccess in south-east Asia is the abilityto have local partners on the ground, the

company plans to increase its presence.

“For a small company to grow, it isnecessary to present its whole trackrecord and all of its assets,” Tan says.“Given our successes in the region wewill be seeing ourselves participating inprojects in Vietnam, Cambodia, Thailand,and Malaysia over the next several years.We are opening up to opportunities tofind strategic partners or investors as wecontinue our work in those countries.”




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MTU AsiaThe Asia Pacific Region presents one ofthe largest opportunities for supplierswho specialise in decentralised powerplants. With many areas of south-eastAsia underdeveloped and power grids notreaching rural communities, players such

as rental power companies and dieselgenerators have had much success ingrowing in the region.

MTU Asia, which is the Asia arm of MTUFriedrichshafen GmbH, is a world leaderin large diesel engines and complete drivesystems. MTU’s growth in south-eastAsia began 35 years ago when the Asiaoperational headquarters was establishedin Singapore. Today, MTU Asia hasmore than 500 employees working in 30countries all across Asia Pacific. MTUspecialises in the production and designof engine sets with capacities of 125–9,000 kW. With many generators in theregion failing to provide enough electricityfor the population, MTU also providescustom-made emergency diesel generatorsets for power plants.

Due to Singapore’s central location,MTU Asia is able to supply its customerswith a variety of engines and products.While the main engine manufacturingfacility is still located in Germany, MTUholds enough local stock to allow it todeliver generators within a few days. Toreduce lead times even further, HermannRoehm, Director of MTU Onsite Energy,expects that local manufacturing facilitieswill open soon. MTU Asia uses externalpartners to provide various financingoptions to its customers. Given that manyprojects in the region are required only for

limited periods, MTU has followed othercompanies by selling engines to powerrental providers. “Just recently we rentedout our equipment to a huge powerplant, where our generators are nowfeeding power into the grid directly, withrequirements anywhere from 5–10 MWup to 100 –200 MW,” Roehm says.

Renewables

Singapore’s ability to craft itself intoa leading power hub in south-east Asiais seen nowhere more clearly than inthe renewable energy sector. Despite

being constrained by its small size andbeing geographically ill-suited for manyalternative energy sources like wind,Singapore attracts rapidly-growinginvestment in its renewable energy sector.Ever since the Singapore governmentidentified the clean energy sector as oneof strategic importance for the economy

in 2007, it has invested more than S$350million (US $274 million) into boostingthe growth of the industry. The key tosuccess has been the country’s ability tobuild a strong and encouraging network ofgovernment agencies and consultancies tohelp companies both large and small cometo Singapore and set up base there.

One of the leaders in this respect has beenthe Sustainable Energy Association ofSingapore (SEAS), which is Singapore’ssole association for companies workingin the renewable arena. Now with165 members, SEAS has been helpingcompanies expand their operations inSingapore, but not only that. “Most

companies cannot survive if they juststay in Singapore,” says Kavita Ghandi,SEAS Executive Director. “We thereforehelp them expand outside of Singaporeby doing business intelligence, businessreports and trade missions.”One such company that has benefitedfrom SEAS and Singapore’s otheragencies has been WoodHolmes, a smallinnovation company from the UK whichhelps a variety of industries with theirprojects. When CEO Stuart Smith cameto Singapore two years ago to plug intothe renewable scene he found a lot ofsupport.

“SEAS has been really fantastic in helpingus to establish our business here. TheMinistries themselves were very polite andwelcomed us coming here by giving usinformation and time to show us how weneed to do our business,” Smith says.

SolarThe clear leader in Singapore’s drive tobecome the clean-tech capital of south-east Asia has been solar power. Withvery low wind speed inhibiting theeffectiveness of large wind farms, one ofthe world’s busiest ports rendering tidaltechnologies unreasonable, and no riversto power hydro, solar power holds the

most promise in introducing an alternativeenergy source into Singapore’s powergeneration mix.

When government policy toward cleanenergy changed in 2007, the EconomicDevelopment Board (EDB), which ischarged with developing and growingSingapore’s industries, embarked on anambitious program to boost the solarpower sector.

Since solar power does not carry anyimmediate large-scale promise in termsof generating electricity for domesticconsumption, the major question facingSingapore was what exactly this smallcountry could offer the multi-billion-dollarsolar industry.

Utilising its well-established base insemiconductor and electronics R&D,Singapore’s government began to attractlarge renewable energy companies byoffering them a place to set up their

production and R&D operations. Thechallenge, however, was in transferringthe expertise that Singapore had in theelectronics sector to renewable energies,and then nurturing the appropriate levelsof skill to support it.

When companies such as RenewableEnergy Company (REC) and others startedsetting up in Singapore in 2007 and2008 with the help of EDB, the need forsolar R&D only multiplied. “When thesecompanies were negotiating with EDB,one of their main requests was t heir needfor good and well-trained staff and R&Don a very applied scheme,” says JoachimLuther, who now heads up one of Asia’slargest institutes for solar power, theSolar Research Institute of Singapore(SERIS). “Until then Singapore did nothave that much of focus on application-type research, so EDB decided that therewas a need for such an R&D centre andwent ahead in setting up this Institute,”Professor Luther explains.




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Since SERIS opened in 2008 its role hasbeen threefold: working with privateindustry, developing PV technologies,and supporting the push for solar powerin Singapore. In the last few years alone,the significance of the Institute has beenreflected in the increasing number ofstaff. Says Professor Luther: “We were

established in April of 2008, and westarted with two people and now we have140 people. We are going for somethingbetween 150–200 people by next year.”

Apart from REC, other large solar companieshave also made Singapore their regionalhome. Germany-based Conergy, a majorplayer in the power sector worldwide, isboth a service provider – with activitiesincluding project development, financingand engineering solutions – and a productdesigner and manufacturer. Conergy isalso one of the few companies to offer“output insurance” covering power lossdue to lack of sunlight. Marc Lohoff,President of Conergy Asia Pacific and

Middle East, explains how solar investorsare becoming more sophisticated. “Wesee that the market is currently shifting,

especially in south-east Asia, and so isthe mindset of investors,” he says.

“We are a very new industry, and a lotof investors lack experience on how torate projects. In the beginning they werelooking at the return on equity, but theyassumed that even though the cost varies,

the quality remains the same – so theywould go for the cheapest offer. They arenow understanding that they have to lookat the cost of electricity generation overthe lifespan of a plant. This is Conergy’sadvantage: we provide a high-qualitysystem with a very high output. This iswhy we sell more and more of our premiumproducts in this competitive market.”

Backed by government support andstrong innovation in renewable energy,both Singaporean and internationalcompanies have been seeing growth intheir businesses across the region. Despitethe lack of a domestic market, companiessuch as Asiatic Group Engineering and

Phoenix Solar have been targeting theinstallation of solar panels on Singapore’sbuildings. While the absence of a feed-

in tariff means that Singapore has lessstimulus than other countries for thegrowth of solar energy, the governmentnevertheless believes the domesticmarket could grow. As Lawrence Wongputs it: “We would be happy for morepeople to set up more solar installations inSingapore and the power grid can easily

accommodate up to 350 MW of solar, sowe can take in a lot more than we areright now.”

WindWhile solar might still hold potential forSingapore in limited capacities, windspeeds in Singapore are low, so theinstallation of large-scale wind turbinesis not considered. Other countries inthe region, however – especially thePhilippines, Thailand and Vietnam – havebeen exploiting their wind capacitymore and more. “Traditional markets forwind energy are clearly in Europe,” saysSean Sutton, President of wind turbinemanufacturer Vestas Asia Pacific. “But

for the past three years, there has beena big shift towards Asia and especiallythe developing countries,” he notes. Withthis in mind, Vestas, the world’s largestproducer of wind turbines, decided justa few years ago to base its regionalheadquarters and one of its largest R&Dcentres in Singapore.

Another recent entrant into the windenergy market has been EnergyCorpGlobal, which was established twoyears ago when the renewable energyindustry in Singapore started to growwith government support. EnergyCorpGlobal decided to enter the wind turbineindustry as well as becoming a systemintegrator for a wider spectrum ofproducts. “Seeing that the governmentwas supporting the growth of this sector,we also came out into the market,”says Michael Heng, a former professorat Singapore’s School of Electrical andElectronic Engineering, and currentlyCEO of EnergyCorp Global.

Q – What is the role ofthe Linde Gas Singaporeoffice?A – Linde Gas in South andEast Asia is headquarteredout of Singapore anddeals with 11 countriesin the region. We havea strong footprint here,

with two manufacturingfacilities: one on JurongIsland and another in Tuas.

Our Jurong Island plant is one of the world’s mostintegrated gasification complexes. For the last threeyears we have had an active investment programin Singapore and the region, so we see ourselvescontinuing to increase our presence here.

Q – How does Linde Gas contribute to renewableenergy?A – We actively promote the cause of energysustainability across all the industries we serve,and from a renewable energy perspective we are

Interview with Sanjiv Lamba,Managing Director (South and East Asia), Linde Gas

the leading player in the region for the developmentof the photovoltaic industry. How we do that isby working with original equipment manufacturers(OEMs) and our customers to provide gases andchemicals into the manufacture of PV cells. Weare at the back end of the production process, sowe are less visible, but we are embedded into theinfrastructure and our technologies play a vitalrole. We work with a large number of customers

all across the region and we supply leading solarmanufacturers in Malaysia, India, Philippines, andothers in the region.

Q – What is your outlook on Linde’s developmentfor the near to medium term?A – I see the next five years in Singapore beingvery exciting. I think the government and EDBhave great plans for the city state, and are veryfocused in execution. That is very important fromour perspective because it allows us to align ourstrategies to actively promote what happens inSingapore, and make sure that we are supportingthat development through our own investments.”




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Since its establishment the companyhas been able to diversify its activitiesinto several different areas. Working asa system integrator, Heng and his teamwork on various projects as consultants,investors, project managers, and suppliersof renewable energy products.

EnergyCorp Global markets 1 MWwind turbines produced by the Koreancompany Kowintec, which it plans toacquire during 2011.

Last year the company talked toprospective Kowintec clients in thePhilippines, Vietnam, Thailand and China.The Kowintec design has two rotors– one upwind and one downwind – and avertically mounted generator, and is saidto be up to 40% more efficient than otherturbines of similar size.

EnergyCorp Global is also one of theleading companies in a consortium of

Singaporean SMEs who are co-developingand promoting the Hangzhou-SingaporeEco-Park currently being constructed in

China. “When we first started we hadvery little experience in the industry, sowe started to looking for partnerships withsimilar-sized companies,” Heng explains.

“We were able to cultivate many contactsin the renewable energy industry all across

Asia Pacific. Nurturing these contacts hasnow led us to develop a new project ofdeveloping an industrial park in Chinausing renewable energies such as wind,solar, and biomass.” The eco-park willcover an area of 5 km2 and is expectedto cost up to US $2 billion.

From R&D to

Manufacturing

As demonstrated by SERIS, the successof Singapore’s renewable energy sectorowes a lot to the country’s R&D strength,which allows companies to driveinnovation by finding a place to test theirproducts. A major government project

has been the creation of a “green tech”park in Singapore where companies areable to test their products.

One local company, Ecospec, have beenable to benefit from Singapore’s deep-seaport to test and patent a new technologywhich removes SOx, NOx and CO2 fromthermal power plant exhaust gases. IUTGlobal, which runs Singapore’s only powerplant to run on food waste, is also at theforefront of innovative technologies.

Edwin Khew, CEO of IUT Global andSEAS Chairman, explains the interesthis company has generated: “When CNNshowcased our technologies, we receivedover 100 enquiries from all over theworld within a couple of weeks. Somemunicipalities were keen to learn aboutthe operation of the plant and said theyneeded it urgently in their cities,” hesays. The challenge, of course is findingfinancial support. Although Khew wasspeaking only of his own company, muchof what he says applies to a broad swatheof Singaporean innovators: “There is noshortage of interest in our work, and withthe appropriate funding we can develop a

lot of helpful and exciting projects aroundthe region.”

When it comes to manufacturing,Singapore’s chemical and electronicsindustries make up the majority ofthe country’s exports. In the powersector there has been an emergence ofelectrical and power plant componentmanufacturers who supply to the broaderAsia Pacific region, but as in all othersectors, international manufacturers havecontinued to use Singapore as a base fortheir regional exports. Singapore’s sharesin international markets have also seen aboost from the country’s many free tradeagreements (FTAs). The country currentlyhas 18 FTAs with 24 trading partners,and more are now being negotiated.

Even chemical companies and industrialgas manufacturers have been playingimportant, if less visible roles, in thepower sector. Linde Gas, for example, isone of the world’s leading manufacturers

Q – How was EnergyCorpGlobal established?A – Two years ago wewere already involved inthe energy and powerbusiness mostly throughour work in the marineengine industry. Then anopportunity came up fromKorea, when Kowinteccompany, introduced the

world’s first dual rotorone MW wind turbine. The turbine had alreadybeen tested by this point and we thought it wasa great product and innovation. So we decidedto create a new company to deal with renewableenergies and market this new line of windturbines. It was during this time that Singapore’sgovernment began a push to grow the renewableenergy industry and our company has been part ofthat growth.

Q – Other than marketing wind turbines, whatare the other services that EnergyCorp Global canprovide to companies?

Interview with Michael Heng, CEO, EnergyCorp Global

A – Even though we are in wind turbine marketing,we don’t see ourselves as a technology providerbut we see ourselves as a value integrator. Weare a consultant defining a whole range of greentechnologies, and making them available on themarket. If an investor is interested in a renewableenergy project, then EnergyCorp Global identifiesavailable projects, we find the suppliers, arrangedeals for our customers, offer project managementservices, and when it comes to finances, ourcompany’s partnerships with investors can

guarantee a project’s financial success.

Q – How do you see EnergyCorp Global developingover the next 5 years?A – Looking ahead we will be seeing our revenueincreasing up to $20 million, from our business inthe wind turbine industry and we will be engagingin further large scale projects like the eco parkthat we are working on in China. We will also bediversifying our company’s projects into otherrenewable energy fields. We will continue togrow from our Singapore head office because thiscountry provides us with all the right resources tomake our business successful.




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of industrial gases and has done a lot ofwork in a variety of clean energy areas. Asa supplier of gases used in the productionof wind turbines and solar cells, LindeGas is deeply embedded within thesemanufacturing processes. As a producerand distributor of LNG, the company hasalso been increasingly active in the pursuit

of LNG opportunities in the region. SanjivLamba, Managing Director of Linde’sgases business in South & East Asia,predicts many opportunities for LNG inAsia: “In this geography, we see manyremote areas and islands with energyneeds, as well as stranded gas assetswhere Linde can apply its technologyto produce LNG. This also aligns closelywith the interests of these countries toleverage LNG to enhance their energysecurity while managing energy costs andsafeguarding the environment.”

PRÜFTECHNIK

A global leader in the shaft alignmentand condition monitoring systems power

generators need to keep their turbines andalternators running reliably, PRÜFTECHNIKhas been providing its technologies topower plants in south-east Asia since1989.

“This was one of the very first subsidiariesthat PRÜFTECHNIK established afterthe UK,” says Arun Nair, who currentlyruns PRÜFTECHNIK’s south-east Asiaoperations. “Singapore was the perfectplace to cover south-east Asia, and at thetime there were not many companies whoworked in our field performing alignmentservices in the region.

“Alignment and condition monitoring

are very important to keep power plantssafe,” Nair explains. “When dealing withturbines you cannot afford not to havealignment done from the very beginning,because otherwise it will cause very baddamage to the turbine and can causethe plant to have unplanned shutdowns.We offer services and products that arespecifically made for turbine alignment.”

While PRÜFTECHNIK’s Singapore officenow covers eight different countries, mostof the sales still come through Singapore.Nair’s major goal has been to capitaliseon the opportunities in other countries.

“Power has huge potential for us and wesee tremendous opportunities to developthat sector,” he says. “We see verylarge potential in wind energy as well,especially for the condition monitoringaspect. I believe we are still only scrapingthe surface in south-east Asia, and wehave the potential to grow and develop

even more in the future.”

Services: from Cranes to

Banking

Service industries account for most ofSingapore’s GDP. A variety of companiessupport the power sector’s growthby offering services in constructionand engineering, financial services,professional recruitment, and energyefficiency.

As emerging economies continue todevelop their infrastructure in the AsiaPacific, opportunities for companies tooffer engineering and construction services

out of Singapore are endless. With manycountries lacking adequate infrastructurewhere power plants are needed most,engineering and construction firmswho have the ability to offer innovativesolutions are well positioned for growth.

MammoetPower plant components such asturbines – including wind turbines – andgenerators are “very expensive, verydelicate and very heavy”, points out RobinKoenis, head of Asia Pacific business forheavy lifting contractor Mammoet. Thepower industry accounts for a quarter ofMammoet’s revenue, and the companyhas been involved in major power plant

and renewable energy projects all overAsia.

“For Mammoet, Singapore presents agood market in terms of shipping andwe are close to the shipping industrywhich uses heavy-lift vessels to carryvarious components, including those forthe power industry,” Koenis says. “Weship big modules everywhere from thePhilippines to Singapore or from Singaporeto Australia. Our biggest growth marketin the Asia-Pacific is definitely Australia.In the power sector it is also Japan,Indonesia and China.”

Mammoet employs the largest lifting andconstruction cranes in the world and itsengineers have a track record of gettingheavy objects from one place to the nextsafely and efficiently. When it comesto the power sector, safety is essential.“Make sure that you transport the heartof your power plant in a safe and well-managed way,” is the advice Koenis givesto developers. “We do see cases whenthe transport of a generator or turbinefrom one location to the power plant goeswrong. For a turbine costing millions ofdollars, you have to ensure that you aretransporting it safely and are using thebest equipment.”

Singapore is one of the world’s topfinancial centres, and when it comes tofinance many companies find that the

country’s close-knit environment greatlyfacilitates the management of largeprojects. “Singapore is a tremendousplatform for anyone who wants to bein the region,” says Mumtaz Khan, thefounder of Middle East and Asia CapitalPartners, which operates a US $500minvestment fund for renewable energyprojects in Asia.

“For people like us in the finance of therenewable energy industry, Singaporeis a very good location. We are in theright place because our work is all aboutfinding the financing of the clean energyprojects throughout the region. The othermain element is that the government ofSingapore is very supportive of companieslike ours. Our ability to set up shop here isvery welcome.”

Q – When did FM Globalfirst establish a presencein Singapore and how hasit developed since?DB – FM Global has beenaround for 175 years,and we have followedour customers around theworld; from north Americawe expanded into Europeand then more recently intoAsia-Pacific. In Singapore

we recently celebrated our 25th birthday. We didn’tcome to Asia solely to develop business within thearea, but we found that there are indigenous clientsinterested in our risk management philosophy. We’redeveloping our strategy, our infrastructure and our

partnerships throughout Asia, especially in China andIndia, in order to deliver the idea that the majority ofloss is preventable.

PM – FM Global is a company run by engineers andwe are therefore selling the engineering philosophythat losses can be prevented; in the power industrythis means avoiding power interruptions or creating amore sustainable, long-term infrastructure. We havefound some very supportive clients in the region. Asa matter of fact, we insure about two-thirds of thepower generation capacity in Singapore.

Q – What competitive advantages does FM Global

Interview with Dennis Bessant (Vice-President) and PeterMadeley (Operations Vice President), FM Global

bring to the insurancemarket?DB – It is important tounderstand that manyinsurance companies lacksufficient engineeringexpertise. In the insuranceindustry, it is usuallyconsidered that themost important step isrisk transfer. We handlethis from a different

perspective. For us, risk transfer is only the last step,preceded by risk identification and risk mitigation.We look at the risk from a holistic perspective,rather than individual components. This is what hasattracted prospective clients in Singapore to contact

us. The fact that many of our customers have beenwith us for at least 25 years, sometimes for morethan 100 years, shows that our model works in thelong term.

Q – How do you see FM Global’s future growth?DB – We are very active in south-east Asia,particularly in China and India, and we see thepotential for future long-term mature core markets inthese territories. At the moment we are building theinfrastructure for our own activity in these territories,and by working with governments we are using ourengineering credibility to pioneer the future codes andstandards emerging in these territories.




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As well as finance, power plantprojects also need insurance to makerisks manageable. One specialist in thebusiness is FM Global, an insurancecompany whose unique approach to riskhas distinguished it from other players inthe field. Boasting a history going backalmost 200 years, FM Global is run by

engineers and is the insurance providerof choice for most of Singapore’s powergeneration companies.

FM Global’s hands-on approach towardensuring that power plants will run safelyis part of the reason why the companynow insures 7% of all generation capacityworldwide. Peter Madeley, who runs thecompany’s operations in Asia Pacific,explains: “We spend several days at eachpower plant, in order to physically seethe facility and the protective devices andwitness the critical equipment tests. Weneed to conduct a very comprehensivereview, so that the client knows that whenthe FM consultation has been complete,

they can be sure that their protectivedevices will work as designed.”

ActsysThe service sector also has plenty of roomfor independent engineering consultancies,of which one example is Actsys. Startingas a one-man company, Actsys hasgrown into the leading energy efficiencyconsultancy for the power industry inSingapore and beyond. Celebrating its10th anniversary this year, Actsys wasfounded by Norman Lee, a chemicalengineer who has used his experience inthe process sector to increase efficiencyand operating capacity in energy-relatedindustries.

“The main area facing the power sectorwhere we can help is by doing energyaudits and performance management,”Lee says. “What this means is if apower plant is going for an inspection ormaintenance shutdown, they would liketo know which parts of their plant arenot performing well, especially in termsof efficiency. Power producers often donot have this capability themselves. Theyunderstand that they might not be runningat full efficiency but they are not able toput a finger on which respective partsof the plant are losing their efficiency.

So what we do is create our own verydetailed thermodynamic model of theplant. We are then able to quantify whichrespective parts of the plant are losingenergy efficiency, and further tell themhow to do their plant maintenance.”Actsys has worked with the all the majorSingaporean power plants year after year,

and has now expanded to offer its serviceselsewhere. With many power plants inthe region experiencing efficiency issues,Actsys is well positioned to offer itsservices more broadly.

“Our track record sells us, and we needto be manning up to expand,” Lee says.“Unfortunately people taking on ourservices have to overcome the inertia thatthey have built up by operating powerplants for 30–40 years without everseeing a value in our work. When theysee the results, then they realise whatthey have been missing out on for sucha long time. However, to demonstratethese results takes time and effort.”

With a total population of around 5m, oneof the major challenges facing Singaporehas been finding the appropriate talentto support the country’s industries. As aresult, Singapore has attracted numerousprofessional recruitment agencies eagerto become the talent supplier of choicefor the region.

Recent steps taken by the government,such as relaxing the visa regime to allowcontractors to sponsor themselves for afive-year stay, have also improved thesituation. Mark Sparrow, the head ofASEAN for recruitment company KellyServices, explains the result of this

change: “Professionals in the energyindustry whose contracts run out, butwho want to stay in Singapore, are nowable to search for another job here. Whilethis may sound like an insubstantialtweak, it made a massive difference inretaining intellectual property within thecountry. It’s something the governmenthas done to retain a lot of good talentwithin Singapore’s shores.”

In an effort to remain competitive,professional recruitment agencies havealso been increasing their focus on energyand engineering as demand for specialised

personnel in the power industry increases.Companies like Robert Walters, which nowhas a strong presence over south-eastAsia and 100 people in Singapore, hasspecific teams targeting the engineeringand energy sectors. While competitionbetween professional recruitment agencieshas been particularly fierce, it has not

stopped others from entering the market.

EarthStream was established in Singaporeless than two years ago and already has 70people, nine global offices and a databaseof over 160,000 energy specialists.Founder and CEO Kevin Gibson thinksthat increased specialisation in the energysphere makes EarthStream different. “Asa recruitment firm we are not focused onfinding very general skill levels – ratherwe like to find very specialised skills setson the engineering and technical side ofthings,” he says. “We are also looking atenhancing the skill transference process,so that individuals who have goodexperience in generation or transmission

in one industry, like oil and gas, are ableto transfer their skills to other industrieslike clean energy.”

Industry Outlook

After a record GDP growth year in 2010,Singapore is well placed to strengthenits position in the energy sector. Withthe domestic power market growingand expanding, Singapore continues toshowcase its liberalised market structure

and influence its neighbours to openup their power sectors as well. A risingstar in the renewable energy sector, thecountry’s R&D sector continues to attractcompanies from many areas within cleantech. The incoming LNG terminal will seeSingapore continuing to establish itself asa trading centre for all of south-east Asia

over the course of the decade. Singapore’strack record demonstrates that it is wellpositioned for investment in a varietyof spheres, and much of the incominginvestment trickles down to Singapore’sregional neighbours. Singapore is nevermore than a five-hour flight from AsiaPacific’s most prosperous economiccentres, underlining its central location.

Areas for improvement remain: Singaporewill have to address further the efficienciesof its plants as well as the never-endingstruggle to locate suitable talent, a taskthe country’s small population makesespecially difficult. The regulatory andlegal framework is important, but not

the most significant factor. Instead, asNg Quek Peng of GMR puts it: “I cannotoveremphasise Singapore as a societypositioned for investment. When Chinese,Indians, Malaysians and even Caucasianscome here they feel at home, and thiscreates a very conducive environmentfor everybody to invest in Singapore. Wecome and invest here not because of thelegal or economic system, but because ofSingapore’s society’s ability to make usfeel very much at home.”

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