Published with support from the Singapore Energy Market Authority (EMA)

A review of SIEW 2011 by Anne McIvor

The Singapore International Energy Week (SIEW) 2011 concluded end 2011 with more than 20,000 participants from over 60 countries taking advantage of the valuable exchange of best practices and networking opportunities available at the many events taking place during the week. Among the lineup were three new partner events: The PV Asia Pacific Expo, notably the largest solar show outside of China; Asia Smart Grid; and energy trading event EMART Asia.

SIEW 2011 also saw some of the world's senior political and business leaders discuss and exchange perspectives on future energy strategies for Asia and the world. The key theme, on "'Securing Our Energy Future", was, as the Energy Market Authority's Chief Executive Chee Hong Tat pointed out in his welcome address at the Singapore Energy Summit,  "much more complex and difficult today".

The summit, co-organised by Singapore's Energy Market Authority and Energy Studies Institute, provided many valuable insights into the challenges of energy security, particularly in light of the Fukushima nuclear reactor incidents and the North Africa and Middle East oil supply disruptions.

21st century energy security

Helming the summit was Singapore Energy Lecture speaker Nobuo Tanaka. Fresh from his four-year term as Executive Director of the International Energy Agency (IEA), an organisation which names "energy security"' as the first of its four main areas of focus, Mr Tanaka is perhaps the world's leading thinker on the theme of "Securing our Energy Future".

In his discussion with moderator Geoff Cutmore from media outlet CNBC Asia, Mr Tanaka spoke candidly about oil prices, climate concerns, sustainability, gas, and more specifically, nuclear energy. This is high on the agenda for the Japanese national, as Fukushima has clearly focused attention ever more strongly on the need for a coherent international strategy for the future of energy security.

Acknowledging Mr Cutmore's observations that there has been only limited co-ordination in Asia on energy security issues (and the "elephant in the room", China, which has been pursuing its own path to energy security), Mr Tanaka's view was that the fast growth of Asian economies, with their accompanying spike in energy consumption, adds a new dimension to the issue of energy security for the region.  He believes there are legitimate reasons for ASEAN countries to consider a different path from that being championed by the IEA. As he pointed out to a 900-strong audience, the agency was created to underpin 20th-century energy security during the 1970s, at the height of the oil crisis. However, 21st century energy security is different in nature, raising the question of whether Asia needs a new form of response.

Mr Tanaka emphasised the growing role of alternative sources of energy, noting that even nations such as Saudi Arabia and the UAE are championing solar power given that oil and gas will eventually be exhausted. His firm conclusion was that more co-operation is necessary within Asia, pointing to neighbours Japan, South Korea and China as examples of countries where grid connection makes sense. In his view, a connection between Korea and Japan would be more synergistic than the recently-mooted idea of connecting Japan's grid with Russia's.  

Singapore's strategies

Alongside Mr Tanaka's lecture, Mr S Iswaran, Minister in the Prime Minister's Office and Second Minister for Home Affairs and Trade & Industry, acknowledged in his opening address that increased economic uncertainties have caused much volatility in energy markets and prices. This is being caused by fiscal and financial difficulties in the US and Europe, combined with the unrest in the MENA region and the challenge of climate change negotiations. As a consequence, the policy challenge to governments to secure reliable and affordable energy supplies in order to sustain economic growth has intensified.

Minister Iswaran discussed the strategies that Singapore is adopting to underpin energy security, with diversification at the core of the city-state's plans. To this end, Singapore's LNG terminal is set to come online in the second quarter of 2013. It was also announced that the country is considering electricity imports and aims to commence a public consultation exercise by end 2011. This would gather views from industry and stakeholders on how Singapore might import electricity and integrate this into the market to benefit consumers. The thinking is also that by establishing bilateral interconnections, the city-state can help pave the way to a larger, regional ASEAN-integrated power grid.

A meeting of energy giants

The Summit's dinner dialogue between Royal Dutch Shell CEO Peter Voser and Petrobras CEO Jose Gabrielli marked a first in Asia, with heads of an IOC (international oil company) and an NOC (national oil company) on the same stage. It also highlighted Brazil's rise as an increasingly important player in the oil and gas industry. The country is also seeing fast growth in demand for energy domestically. However, as Mr Voser pointed out: "One key transition of the global energy system in the coming years will be the shifting of energy demand from West to East." With ASEAN nations set to become net importers of energy in the future, Brazil looks poised to become an important trading partner exporting energy to Asia and contributing to energy security for Asian countries.

A ministerial dialogue

That said, there is still substantial scope for Asia to supply a large portion of its energy demand from within. In a discussion among Southeast Asian Ministers on the regional challenges of energy security,  Dato' Sri Idris Jala, Minister in the Prime Minister's Office of Malaysia, reflected that his country's economic transformation from a middle- to high-income country entails focusing on 12 key industry sectors, with oil & gas and energy being the most important. Malaysia is intent on creating optimum conditions for competitiveness. Thus, the policies include encouraging enhanced oil recovery in the country's ageing oil fields, as well as increasingly putting in place appropriate strategies to encourage renewable energy resources.

According to Minister Idris Jala, Malaysia is seeking a pricing structure for feed-in tariffs (FiTs), which is "brought back to market". With a controversial consultation on solar FiTs hitting headlines in the UK and the Spanish government being challenged in the international courts over its FiT reversal, it appears that Asian governments are perhaps drawing on lessons learned from the difficult experiences of European governments with regard to FiTs. Minister Idris Jala's view on this is that "regression steps should be there when launched, so (FiTs or incentives) won't cause another form of distortion in the renewables market".

Minister Iswaran noted that Singapore's primary mission is to ensure that energy does not become a binding constraint on the nation's ability to grow and develop. On the demand side, this means responsible construction and energy efficiency efforts, as well as education--for both children and adults. On the supply side, as discussed previously, diversification is a key plank of policy to ensure that the country has access to steady, reliable and affordably-priced energy.

The encouragement of innovative energy solutions and technologies, in part by setting the country up as a "'living laboratory"' for test-beds  such as electric vehicles, also remains a cornerstone of Singapore's energy policy. The role of the country in furthering knowledge on smart cities and communities--and the energy security issues which are thrown up by urban living--was acknowledged by Mr Gunther Oettinger, the European Commissioner for Energy. In his pre-recorded address, Mr Oettinger confirmed that Europe's energy future involves a fully-fledged external energy strategy. With 80 percent of energy used in the EU being consumed in urban areas, Europe has a growing focus on smart cities and communities and the potential for greater energy efficiency in both production and consumption.

The discussions at the Singapore Energy Summit--and many of the other events taking place during SIEW 2011--covered the entire energy spectrum, from oil and gas to power, carbon markets, energy efficiency, renewables, energy trading, and much more. The underlying theme of energy security, which influences strategy throughout all of these areas, was the thread pulling them all together. As the population of Asia (in particular) and the world keeps growing--with an increasing concentration in urban communities--solutions to the challenge of energy security will become increasingly sought after.

The debate on which power trends can contribute to energy security in Asia and the role of "smart" communities in addressing the energy security challenge will continue throughout the year and resume again from 22-25 October 2012, with two new events--the Asia Future Energy Forum and the Gas Asia Summit-- joining the SIEW 2012 lineup.