An “all-green” strategy to preserve resources security and independence
Known as the “City in a Garden”, Singapore built international reputation for its strong commitment to a green and sustainable city. Loved by some or decried by others who claim that the city has lost its original soul, the result is anyway quite astonishing when compared to other international bubbling financial hubs.
Such an obsessive approach couldn’t come however without a clear subtended interest. Given Singapore’s geographical location, soaring population and industrial booming sector, a huge amount of power generation capacity is needed. Likewise, water supply poses a long-term challenge that desalination and water catchment solutions (NEWater program) have not yet completely solved (50% of the city’s water still comes from Malaysia).
Singapore’s support for green oriented projects set-up
Thanks to attractive connections with the rest of South East Asia, Singapore is strategically positioned to play a leading role in supporting the development of cleantech industries in South-East Asia. Among some of Singapore key strengths, let’s name a few:
- Strong logistic capabilities supported by world-class infrastructure facilitating regional distribution.
- Strong R&D capabilities thanks to significant government funding for energy, water and green building sectors.
- A cleantech incubator & accelerator aimed at: 1/ providing cleantech companies with business support in Singapore and 2/ help international enterprises expand their technology and business to the region, using Singapore as a springboard.
South East Asia urgent need for renewable energy resources
Be it strategic or purely philanthropic, green issues are a growing matter in emerging markets particularly in Asia where the expected urban population boom and related energy needs pose massive challenges: infrastructures, access to water and electricity are among the most important ones that the region will have to tackle over the next decades.
On top of environmental issues (water supply, pollution), an exacerbated reliance on imported fossil fuel energies represent a tremendous economical and geopolitical risk that governments have to tackle so as to support the expected economical growth prospects of the region.
According to a report published by the IEA (International Energy Agency), the region’s energy demand has expanded two and a half times since 1990 and it should keep increasing dramatically over the next decade as per capita use of energy in the region is still very low (half of global average). IEA estimated that about USD1.7trillion of cumulative investments in energy-supply infrastructure are required by 2035 in order to match South East Asia needs. Renewable energy sources are abundant in South East Asia: the potential of bioenergy (agricultural and animal feedstocks) is large while hydro already plays an important role in the region. Geothermal is under used relative to its potential while Wind and Solar PV remain small but deployment is growing. According to Armstrong – clean energy Asset Management, the installed capacity of solar power systems in South East Asia was close to 400MW in 2012 and should exceed 2400MW by the end of 2014.
Much to be done still but initiatives and financial supports are gaining ground
Although the renewable energy sector is still encountering some difficulties (financings, oil subsidies, grid issues administrative hurdles), governments have been clearly encouraging initiatives and gradually improving energy policies in favour of renewables. In the meantime, development banks such as IFC or ADB are playing leading roles, actively participating to the financing of the sector. Specialized investment funds have also joined the effort, providing the sector with additional financing support.
All in all, South East Asia offers incredible potential for renewable energy investment projects. International equipment providers have already settled in the region, utilizing Singapore as a regional hub. Additional players keep investing in the region. Non-outstanding the fact that fossil fuels will still be needed in the future, a rebalancing of the energy mix is one of the top priorities on which Asian governments are working on. Much needs to be done yet but a gradual shift is on track. The soon to be launched regional economic integration (AEC) should also further enhance common energy policies and regulations in the region, therefore facilitating the development of the sector.