Speech by SMS Chee Hong Tat at the Launch of EcoLabs Centre of Innovation for Energy

Prof Subra Suresh, President of Nanyang Technological University (NTU) 

Mr Edwin Khew, Chairman of Sustainable Energy Association of Singapore (SEAS) 

Distinguished Guests, 

Ladies and Gentlemen,

1. Good afternoon. I am pleased to join you today to witness the launch of the EcoLabs Centre of Innovation for Energy at NTU.

Introduction

2. The global energy sector is going through a paradigm shift. With rising awareness of the impact of climate change, more countries and companies are taking environmental and sustainability considerations very seriously when making long-term decisions on their energy mix. Global demand for clean energy and energy efficient technologies is also on the rise. By some estimates, the global clean technology market is expected to exceed US$4 trillion by 2020. 

The changing energy landscape brings new challenges and opportunities

3. There are three key forces underpinning this paradigm change in the energy industry – decarbonisation, decentralisation, and digitalisation; each bringing its own set of challenges and opportunities.

Decarbonisation

4. Governments and enterprises around the world have been pushing the limits in the adoption of renewable energy to try and reduce their carbon footprints and fulfil their climate obligations. However, the cost has hitherto been a hurdle. With technology advances, the cost of low-carbon technologies like solar photovoltaics and battery energy storage systems is dropping. With increasing energy options that are sustainable and cost efficient, the demand for such low-carbon technologies is poised to take off. And I believe that the adoption will not be linear. I think beyond a certain point, you will see an exponential increase.

5. So we must continue to apply an objective and disciplined approach in assessing the technologies and the economics behind each one, so that we remain outcome-focused and are not driven by a desire to chase sexy technology or to rule out options prematurely.  We made the right decision some years ago to be technology-neutral, and resisted the pressure to follow other countries in providing subsidies and feed-in tariffs for renewables.  

6. I was CE/EMA at that time, and as CE/EMA, I was convinced that prices would drop over time and the renewables would soon achieve grid parity without the need for subsidies, which will inadvertently create distortions in the market and lead to higher energy prices for consumers.  We see this happening in Europe and Australia, and once the subsidies are given, they are in place for 20-30 years, even after the prices of renewables have fallen and subsidies are no longer needed.  In economics, we learn that policies should be assessed based on the incentives and outcomes they create, and not by the intent of the proponents.  Good intent can lead to bad outcomes if the incentives are not correctly structured.  

7. I am also of the view that we should not prematurely rule out technologies, even if the current versions are not good enough to meet market needs.  In some countries, such decisions are made based on political considerations – supporting or ruling out coal and nuclear to win votes during elections.  We must not go down this path.  Coal has its downsides, but if these can be overcome by technologies like carbon capture, it can remain an important component of the world’s energy mix. And in some countries, if you do not use some of these technologies as baseload, what are the options? The same goes for nuclear.  If the safety concerns can be addressed, for example through modular reactor technology which some countries are experimenting with, it can be a clean and stable source of energy to provide the baseload and complement intermittent sources like wind and solar. We should assess these energy technologies from an objective and practical perspective, and not be ideological about supporting or opposing them.  

Decentralisation 

8. Second, providing access to electricity remains a challenge in some parts of the world. In some countries, less than half of the population, or a significant proportion of the population, still do not have access to electricity. In this part of the world, in the Philippines and Indonesia, the cost of providing electricity to remote islands through centralised grids can be prohibitive. However, with improvements in energy storage and power systems technologies, enterprises can now work with governments to develop cost effective distributed energy infrastructure tapping on renewable energy to power rural communities and improve their quality of life. 

Digitalisation

9. Third, the rising prevalence of digital technologies and data science has unlocked new solutions and business models across the value chain in the energy sector. Recent innovations include smart meters and real-time energy management tools to optimise energy usage, as well as renewable energy certificates and blockchain to support the trading of clean energy. However, these solutions will require rigorous testing and piloting to build up credibility and track record, before they can be commercialised at scale. As Prof Suresh mentioned earlier, we do need to be willing to try out some of these in a manner which you manage the risk, take some risk, try out some of the new ideas, experiment with new ideas and see how they go.
The Government is committed to helping energy companies in their innovation and tech commercialisation journey.
  
10. The three forces of decarbonisation, decentralisation and digitalisation will transform the energy sector. Enterprises that innovate and stay ahead of the curve will secure themselves a piece of this growing pie.

o Champions such as Tesla and Envision have emerged, while incumbent utilities players are exploring new technologies and business models to remain competitive. 

11. We want our Singapore companies to innovate and capture these new opportunities. However, we recognise that not all companies, especially SMEs, will have the scale or resources to embark on this journey on their own. 

12. This is where a collaboration like this comes in very useful. I am glad that Enterprise Singapore, NTU, and the Sustainable Energy Association of Singapore (SEAS) have joined hands to set up EcoLabs. As Singapore’s 9th Centre of Innovation, EcoLabs will serve as a one-stop centre to support our companies, especially our SMEs and startups in the energy sector, in their innovation journey. 

13. Besides providing access to cutting-edge R&D equipment and NTU’s pool of top quality research scientists to assist companies with developing their technologies, EcoLabs will also expand its support into technology deployment and acceleration, and provide services such as business incubation and investment facilitation.

14. EcoLabs will also aggregate test-bedding infrastructure from the private sector so that companies can easily validate their innovations at scale and build a track record for internationalisation. This is important as on their own, companies may not be able to have the resources, to have the equipment or the test facilities. So an infrastructure like this, for example, requires enough scale. And when we can share this, as a shared facility, with all the companies, I think it will benefit the entire ecosystem. This addresses a longstanding gap in the energy sector, and we are plugging this gap by bringing together partners from academia, industry and government.

o Over the years, we have established several energy testbeds, which include the Pulau Ubin Micro Grid testbed and the Renewable Energy Integration Demonstrator Singapore on Pulau Semakau. However, we need more testbeds of different types, ranging from commercial buildings, industrial facilities, campuses to carparks, residential areas to support the wide range of energy technology commercialisation needs of our enterprises.

o EcoLabs will organise 30 such testbeds across Singapore, making Singapore a dynamic living lab for energy innovation. EcoLabs is also in talks with foreign partners to enable Singapore enterprises to testbed their technologies overseas.
EcoLabs fosters market-led innovation by bringing together expertise from the academia, industry and government

15. The establishment of this Centre is a good example of the benefits of building close partnership between academia, industry and government to support market-led innovation that is commercially relevant and practical. EcoLabs has also brought on board 14 partners, comprising private investors, energy corporates, and industry mentors. We can leverage on their expertise and networks to facilitate a market-led approach to innovation.    

16. I am glad to know that 18 SMEs have expressed interest to work with EcoLabs. This is a good validation of the value that EcoLabs can bring. I am confident that more companies will come on board over time, when they learn about this Innovation Centre and the good outcomes it can deliver.   
 
o NTU will provide the technical expertise and extensive infrastructure to enable the development of new technologies;

o SEAS will create feedback loops with corporates and industry partners to generate private sector problem statements, to help EcoLabs focus its efforts on developing industry-relevant solutions; and 

o Enterprise Singapore will work closely with the Energy Market Authority to provide support and platforms for local enterprises to test-bed innovative solutions.  An important area is to ensure that our rules and regulations are flexible enough to allow these new ideas to be piloted, perhaps starting with a regulatory sandbox if we are not yet ready at the initial stage to expand into the entire market.  

Conclusion

17. Let me conclude by once again congratulating our partners Enterprise Singapore, NTU and SEAS on the launch of EcoLabs. Through such collaboration, we can grow more local enterprises by helping them to level up, scale up and team up. I would like to share that NTU is part of the Jurong Innovation District ecosystem driving innovation and R&D. We can work with our researchers to bring research ideas from the lab into the corporate world, to bring good ideas from our innovation centres to commercialise them into the market, to bring good ideas from Singapore, test-bedded, proven, from here to different cities around the world. So I am very confident that we are off to a good start and I wish EcoLabs and all our partners a successful journey ahead.

18. Thank you very much.