WHILE not as large as electronics or petrochemicals today, clean technology (cleantech) holds great potential for Singapore because of the demand for it in the region, said Minister for Trade and Industry (Industry) S. Iswaran on Tuesday.
The demand is not just in terms of the technology, but also in financing models and business structures that Singapore can develop, he said.
Pointing to the climate change conference which will take place in Paris in December, he told delegates at the Asia Clean Energy Summit: "Regardless of the outcome, many countries and cities are already planning their economic growth within an increasingly carbon-constrained operating environment."
Not only is clean and renewable energy seen as a key solution to pollution and mitigating the effects of climate change, it has become attractive because of its growing cost competitiveness and contribution toward enhancing energy security.
"The 'clean energy' part of any energy mix is really an important component of energy strategy going forward for all countries around the world," Mr Iswaran told reporters later.
It is in Asia that the tension between growth and energy requirements versus carbon constraints will be the sharpest; it is this which will contribute to demand for sustainable forms of growth.
The US Energy Information Administration noted that Asia's energy demand is expected to more than double by 2035.
This is accompanied by the desire for sustainable growth: China recently raised its solar deployment ambitions to 150 GW by 2020; India has announced a target to install 100 GW of solar power by 2022.
"We are also seeing a growing renewables market in South-east Asia," Mr Iswaran noted, adding that Singapore has become an attractive location for international cleantech companies to develop key capabilities and serve markets in the region.
New cleantech investments secured by the Economic Development Board (EDB) this year in solar, fuel cells, smart grids and testing services will, over the next five years, create more than 100 professional jobs and S$150 million in cumulative business spending, he added.
Among these are Grass Energy, a German solar engineering, procurement and construction firm that is setting up its global headquarters in Singapore in a joint venture with Singapore-listed SBI Offshore, an offshore support-services firm.
Consultancy group Accenture will launch its Smart Grid Services team, which will lead the development of global micro-grid solutions architecture; DNV GL will set up its test centre for substation automation - its first outside Europe - to test new network technology innovations.
"These are the kinds of investment and initiatives which will catalyse and grow the cleantech sector in Singapore and the region," said Mr Iswaran.
The sector will be an important part of Singapore's research and development (R&D) efforts in the next five-year plan by the Research, Innovation and Enterprise Council, which is chaired by Prime Minister Lee Hsien Loong. Efforts will home in on taking the technologies from research to commercialisation.
Besides having established dedicated research centres and funded R&D activities through the Energy Innovation Programme Office and the Energy National Innovation Challenge, Singapore is pioneering new innovation models through public-private partnerships; it is also creating living lab platforms where new innovations can be tested and commercialised before being scaled-up for regional markets.
Mr Iswaran cited the collaboration between the Economic Development Board (EDB) and Singapore Power - the S$30 million Singapore Power Energy Advanced Research (Spear) Development programme - as an example of a public-private partnership pioneering new innovation models.
Under the programme, partners will be able to test their technologies on Singapore's grid, ranked among the best performing ones globally.
3M and Omnetric, a joint venture between Siemens and Accenture to provide smart-grid solutions, have been selected as Singapore Power's first innovation partners under the programme, he announced. "This kind of public-private partnership is really what we seek to engender in the clean-energy sector in Singapore."
In the creation of living lab platforms for the testing of new technology, Singapore has established micro-grid demonstration platforms on Pulau Ubin and Pulau Semakau as test-beds for companies. These will integrate and test renewable energy and energy storage on micro grids - expected to be in demand in Southeast Asia, where many towns and villages are not connected to the main grid.
Mr Iswaran pointed out that, with cutting-edge research in cleantech being developed around the world, Singapore needs to ensure that it remains an important node.
To this end, the Sustainable Energy Association of Singapore has, with the Asian Development Bank and IE Singapore, launched the Sustainable Energy Centre of Excellence (SECOE) to drive thought leadership and deliver training programmes for sustainable energy in the region. These programmes will equip regional policy makers with capabilities in areas such as energy efficiency, renewable energy financing and energy access in rural areas.
The minister added that SECOE addressed a key point: "It's not just about industry innovation and R&D, it's also the enabling regulatory and larger business environment."
Asked about the impact of sustained low oil prices on renewable energy, Mr Iswaran replied that, even more so now, the cleantech sector will have to show the competitiveness of its solutions; factors such as the general awareness and global commitment towards reducing the carbon footprint, work in the sector's favour.
"If you're able to be competitive against lower oil prices - and these things move in cycles - then certainly in the future, when oil prices will be higher, cleantech will become even more competitive. So I think the prospects are there because of government priorities and the need in the market ... Industry players see significant potential, in Asia in particular."