Singapore's multi-pronged approach to addressing its energy needs

Singapore's energy sources have evolved over the years, and diversification has brought with it opportunities in trade, technology and even talent development. In the second of a five-part series that looks at the various aspects of energy production and distribution, Arti Mulchand speaks to industry players who are all responsible for feeding Singapore's electricity grid that powers up homes, offices, factories and streets.

 IN JUST over a decade, Singapore has managed a complete about-turn in terms of its dependence on petroleum products as feedstock, which is used to create energy. In 2005, heavy fuel oil still made up over a fifth of the country's energy mix. Last year, that figure dropped to 12.3 per cent, with natural gas accounting for 84.3 per cent. Natural gas is considered a cleaner fossil fuel to use for energy since it produces between 30 per cent and 70 per cent less carbon emissions than either oil or coal.

But what has made Singapore's energy future even more secure is the opening in May of the 40ha Singapore liquefied natural gas (LNG) terminal on Jurong Island, points out Energy Market Authority assistant chief executive Kwok Foo Seng. It allows Singapore to import natural gas from anywhere in the world, instead of depending on piped natural gas from Malaysia and Indonesia. "When you talk about the right energy mix, you need to look at both having natural gas and having enough supplies of it. We now have extra sources, and that helps a lot in terms of energy security," said Mr Kwok, drawing reference to the 1973 and 1979 oil crises sparked by the Arab nations, when prices spiked. Already, expansion is on the cards both for the LNG terminal and LNG sources.

The city-state also aims to become Asia's LNG trading hub. The continent is now the fastest-growing gas market worldwide and is expected to become the second largest by 2015, says the International Energy Agency (IEA).

Singapore is also looking closely at further diversification of its energy sources, including the potential of renewable resources such as solar energy and biomass. Speaking at last month's Singapore International Energy Week, Minister in the Prime Minister's Office and Second Minister for Home Affairs and Trade and Industry S. Iswaran cited the IEA's estimate that renewable energy is currently the fastest growing sector of the global energy mix. "We have some of the best strategies and initiatives in order to diversify Singapore's energy mix, foster competition in our energy markets and help consumers make more informed choices about their energy use and one key strategy is to diversify our energy sources," Mr Iswaran said.

LNG experience a legacy to share and treasure

In May this year, the $1.7 billion, 40ha terminal on the southernmost tip of Jurong Island successfully launched commercial operations, starting a new chapter in Singapore's energy history. It is one that allows the nation to import natural gas from around the world instead of relying on piped natural gas from Malaysia and Indonesia. The LNG terminal's initial capacity of 3.5 million tonnes a year will increase to six million tonnes by the year's end after a third storage tank and additional facilities start up. There are already plans for a fourth tank. 

Plans to develop the LNG terminal on a commercial basis were first announced in 2006. In April 2008, BG Group (BG) was allowed to import and sell up to three million tonnes per annum of LNG in Singapore. But the initial business model proved untenable. "The model didn't contemplate changes in the LNG business, including the impact of shale and commoditisation. All it contemplated was domestic supply with a small capability for export," explained the civil engineer, who also holds a degree in finance. 

In June 2009, the Government announced its decision to take over the development and ownership of the terminal, and formed SLNG to develop, build, own and operate the terminal. Mr McGregor and his five-man team were tasked with modifying the business plan from something "vanilla" into one more suited to a "growing piece of infrastructure". "It meant picturing the future 20 years out from a business perspective, and then taking my 40-odd years of experience and working backwards," he explained. His plans also made  for a landmark moment for Singapore: a 100m tract of reclaimed land had to be turned back into seafront to allow large ships enough clearance to access the berth.

"It's probably the first time Singapore has given land back," he quipped.

But there were other challenges. "We needed people with key (LNG-related) experience but that had to come from the outside. It was not easy and didn't come cheap," he revealed.Many others had to be retrained from parallel industries, including the petrochemical and power generation industries.

"We leveraged firms that were downsizing through the downturn and took our new hires to South Korea to be retrained. They worked on active LNG facilities there before we brought them back to operate the terminal." Today, SLNG's team numbers about 130, of which 80 per cent are Singaporeans. The international team comes from countries that include Britain, India, Malaysia and New Zealand.

Since then, SLNG together with EMA have been jointly awarded the 2013 CWC LNG Innovation Asia Pacific Award for excellence in commercial or technical innovation, an industry award covering the region.SLNG also signed its first vessel cool-down services agreement and performed its first vessel cool-down within five months of starting commercial operations, earlier than expected. A newly-built or newly-repaired LNG ship's tanks must be "cooled down" before they can load a new cargo of LNG.

 Mr McGregor will hand the baton to Mr John Ng, former CEO of YTL PowerSeraya Group, which generates and retails energy as a wholly-owned subsidiary of YTL Power International. Mr McGregor will remain on the SLNG board as a non-executive director.

"But that's also the benefit of having the Government behind you. Things move," he conceded.  People do, too, and at the end of this year.  

WHEN 28-year-old Valerie Choy graduated with honours in chemical engineering from the National University of Singapore in 2008, she admitted that the prospect of a job in the power sector was not even on the radar. "I wanted a career that was both challenging and meaningful. But the power sector?  I don't think fresh graduates are very excited by working in a power generation company and being stuck in the day to day. It was hard to see the long-term benefits of joining the power sector. They had an image problem." she says.

Ms Choy's reaction was typical of a graduate - one that was highlighted by a 2011 study by the Energy Market Authority (EMA) and the Singapore Workforce Development Agency. In the end, Ms Choy joined another aspect of the sector - energy consulting - but the power sector in Singapore is at a critical crossroads, dealing with an ageing technical workforce yet not attracting much interest among the young. And for all the advancements that the sector has made in technology and know-how, it is this people problem that now threatens to cause the next major trip.

So in March last year, a new Power Sector Manpower Task Force was set up. Led by former Singapore Power Group chief executive Quek Poh Huat, it looked to delve deeper into the issues and propose responses. What followed was a consultation exercise involving more than 300 respondents, a "landscape" review of both local and international manpower initiatives, and then a wider seeking of input from more than 100 stakeholders, including industry leaders, government agencies and even students.

The study turned up some sobering numbers. The median age of the power sector's technical workforce is 48 years, compared with the national median of 42. More than 60 per cent are over 40 years old, and less than 15 per cent are under 30. And the sector could not seem to hold on to its precious young. The attrition rate of young people in the sector was about 15 per cent, much higher than the 2 per cent to 3 per cent for the entire workforce.

The implications for a nation that relies heavily on the unfailing supply of essential utilities like electricity and water to power its key manufacturing and services industries were serious.

"If we don't have the people, we cannot keep up this performance. We know this will be a big challenge for us," says Mr Quek.

In December last year, his task force proposed three key initiatives:

1. the establishment of a fresh talent attraction, retention and development framework;
2.  a sector-wide branding exercise, and 
3. a more coordinated approach to driving manpower efforts within the industry.

In January, they were accepted by the Government, and the wheels of change are currently in motion.

Going upstream

CULTIVATING new talent means having to go as far upstream as secondary schools. So to infuse interest in energy-related matters at an earlier age, EMA has begun working with the Education Ministry to review the lower secondary geography curriculum. The idea will be to incorporate energy-related issues, such as getting students to think about the various constraints to the adoption of renewable energy. The revised curriculum is expected to be implemented as early as next year.

Meanwhile, the new electrical power engineering degree course jointly run by the Singapore Institute of Technology and Newcastle University kicked off last month with its first batch of 60 students. A total of 380 applications were received for the course, which is the country's first undergraduate power engineering course and targets polytechnic upgraders.

Looking to convince more graduates to join the sector, EMA introduced the first-ever dedicated energy sector pavilion, "Powering Lives", at the National University of Singapore and Nanyang Technological University career fairs earlier this year. It also held Open House sessions at Singapore's largest power generation plant, Senoko Energy, and organised Energy Connect, a new national competition and seminar that connected youth with energy industry representatives. Work is now ongoing to develop a sector-wide competency framework and more scholarships for students at various levels.

BUT will all that be enough, given the "unsexy" image of the power sector?

Industry watchers like Mr Ravi Krishnaswamy, Frost & Sullivan's vice-president of energy and environment systems practice (Asia-Pacific), are cautiously optimistic, but add that the sector needs to clear the air about what it really can offer. He says: "Some positions within the sector are perceived to be purely manual and on the ground. Young professionals may not find them attractive - especially the cream of the crop. The beauty is that with developments in technology, the nature of these positions is changing. Those perceptions have to be fixed."

Mr Sanjeev Gupta, Ernst & Young's Asia-Pacific transactions advisory services leader for oil and gas, agrees. But given the global competition for talent, he feels the sector must move faster. "Hiring and development need to take place more quickly and more creatively than they have in the past Companies with strong talent management in place will be the most competitive," he says.

One suggestion Mr Gupta has is for energy companies to continue to invest heavily in the in-house development of talent through training. "(This) is a costly and time-consuming process, but is wholly necessary in the absence of graduates with the necessary skills and expertise," he explains. "The need for companies to invest in their own training programmes is becoming increasingly acute."

In this vein, Singapore Power launched "Edge", a graduate development programme, in July. Fresh graduates undergo one full year of structured training, followed by at least two job rotations to various parts of the company's operations over the four years that follow.

"We expose them to the various parts of the business, give them overseas postings and try and keep things interesting," Mr Quek explains.

Still, it will be tough going and may take many years to change an image of the sector which is, for the average man in the street, dominated by the heat and dirt of pipes and tanks.

Until then, Singapore's power sector may get the occasional hand from market forces, says Mr Gupta.

"Every profession has ups and downs but we will always need energy. "And in five or six years when the talent crunch is at its most acute, salaries will evolve and things will right themselves," he adds, before giving, perhaps, the ultimate sales pitch.

"This is a sector without a sunset."

Senoko's activities to engage the young

Another organisation received special mention for rallying youth around energy causes. The Straits Times speaks to the inaugural winners of the Singapore Energy Award, which honours those who have made transformational changes in the energy sector, and finds out what fuels their passion.

  

IT IS a Saturday but one of Senoko Energy's vice-presidents is at Woodgrove Secondary School helping staff to develop an education module for next year and exploring how the school can become more energy-efficient. Woodgrove Secondary is one of 18 schools that has been adopted by Singapore's largest power generation company as part of the NEA Corporate and School Partnership Programme (Casp). 

Senoko offers the schools training attachments, plant tours and project sponsorship among other things, and Mr Kwong Kok Chan has made it his personal mission to work with them. "When I first started in 2004, I saw it as just part of my job. Now I can't differentiate between work and personal interest," says the 60-year-old, an engineering graduate from the University of Malaya. "The students treat me like an uncle, and I've also learnt from the way they see things. One Admiralty student even challenged me, asking why Singapore didn't harness electricity from lightning. I had no idea what to say!"

It is people like Mr Kwong that Senoko Energy president and chief executive officer Brendan Wauters credit for the company's win in the Organisation category of the inaugural Singapore Energy Awards. "The award reflects the continued and consistent efforts we have put in over the past decade," he says. 

"A lot of people like Mr Kwong are instrumental to what we have done. Mr Kwong loves to interact with students and their teachers. His passion is infectious."

But Casp is only one of many community outreach activities undertaken by Senoko, the only power generation company located in the north of Singapore. "Being in the north, we are closer to residential areas, so it important that we have a relationship with our neighbouring communities," explains Mr Wauters.

Senoko has also partnered with the PUB to adopt Sungei Sembawang and help make young people aware of the need for water conservation. In 2012, the company launched the Senoko Sustainability Challenge, which challenged students from primary schools to junior colleges to come up with solutions to environmental problems.

"It aims to create awareness of the importance of sustainability in general and climate change in particular among the younger generation, who are ultimately the ones who can impact future outcomes the most," says Mr Wauters. A total of 120 teams from 52 schools participated this year.

Senoko, which started in 1975, has, through the years, delivered several firsts.

In 1991, it became the first power generation company to import natural gas into Singapore from Malaysia. It was a landmark moment, representing the nation's first step away from liquid fuel.

Senoko was also the first to use combined cycle gas turbine (CCGT) technology in 1995. Being able to fire with either natural gas or fuel oil or a mix of both translated into about 10 per cent in energy efficiency gains and cleaner emissions.

Senoko was also the first company to take the 3R principles of reduce, reuse and recycle to a new level: Its "repowering" approach so far has resulted in a more than 40 per cent drop in carbon intensity over 1990 levels.

Senoko is still on the cutting edge of other innovations, including adopting and testing electric vehicles.

"Power companies are often seen as part of the problem in terms of the environment, but in Singapore, we can say we have become part of the solution," says Mr Wauters.

THE RECYCLER  : Waste-to-energy operations picking up steam

WHEN people think of waste, they don't often think of waste wood. Even fewer think of turning waste wood into energy. But that's what fuels Mr Lee Tse Luen every day. The 36-year-old, who spent close to a decade doing waste management for Sembcorp Environmental Management, now produces steam from waste wood at Sembcorp Industries. "This has been my most exciting posting so far because of the impact we have on the chemical and petrochemical companies here on Jurong Island," said the assistant vice-president of power and utilities. 

"The steam that we produce is economical and competitively priced compared to other energy sources, so we help make these companies more competitive and reduce their carbon footprint. It makes a difference."  The plant he manages, Sembcorp's first renewable energy plant in Singapore, was built in 2011. Following a $30 million expansion, it recently tripled its output to 60 tonnes of steam per hour, produced from 400 tonnes of wood chip processed from the construction and demolition waste collected by Sembcorp's solid waste management operations each day. 

This allows Sembcorp to provide its customers with energy that is clean and environmentally friendly, as well as secure and cost-competitive. It also reduces the amount of waste being tipped into landfills.

Mr Lee oversees the day-to-day running of the plant, which is manned by up to four people at any one point, including him. He checks on production numbers and troubleshoots issues on the ground.

One of the biggest misconceptions among people he speaks to is that the waste-to-energy process is simpler than it is. Construction waste is collected, but it doesn't just contain waste wood. It first goes to a plant in Tuas to get sorted. The waste wood then needs to be shredded to less than 100mm to make it suitable for burning. Each day, over 50 trucks transport seven to eight tonnes of wood chips each to the Jurong Island plant. The 400 tonnes of waste wood, burned at 700 to 800 deg C, become the steam that is distributed to Sembcorp's Jurong Island customers.

By 2016, Sembcorp will also have a $250 million plant that will convert industrial and commercial waste into 140 tonnes of steam per hour. Together, the two projects will cut carbon dioxide emissions by about 120,000 tonnes annually. 

"It hasn't been easy getting people to recycle. The cost of disposing is so low, so it makes alternatives like recycling less viable."That change in mindset takes time. Ten years ago, we thought it would take 10 years. Maybe it will take another 10," he said. 

Sembcorp's growing global footprint - it now has a presence in 16 countries that include the United Kingdom, the United Arab Emirates and China - also allowed Mr Lee to spend two years over 2006 and 2007 doing a stint in Nanjing. At the time, Sembcorp was working with a Chinese company on a waste-to-resource battery recycling project, and Mr Lee was the assistant to the then-joint venture's chief executive officer Jason Chan. The experience was an eye-opener. "It was really quite a challenge to get the locals to accept some of the things we wanted, like safety standards. So something that would have taken two to three weeks to get done here, took two to three months there," he said.

Even back home, challenges abound.

Solar photovoltaic (PV) power

The rising potential of solar photovoltaic (PV) power is another game changer, said Associate Professor Tseng King Jet, who heads the power engineering division at Nanyang Technological University (NTU). "The falling price of PV panels, the gradually rising costs of grid electricity and the easing of restrictions on incorporating solar PV systems into building roof-tops will result in greater energy security, diversity and flexibility for Singapore," he said.

Today, about 90 per cent of the country's energy needs are met by natural gas, but Singapore has been ramping up its use of solar energy, the only renewable energy source currently connected to the national grid. As of the end of last year, the installed capacity of grid-connected solar PV systems had reached 9,989 kilowatts-peak (kWp) - the measure refers to the amount of electric power that can be produced by a solar PV system at its peak, up from 5,938kWp the year before. Last month, the cap for intermittent energy supply to the national grid was raised from 350MWp to 600MWp. The cap is in place because energy reserves are required as a backup to ensure system stability.

The Energy Market Authority's chief executive, Mr Chee Hong Tat, says there is room for expanded use as long as unstable output arising from weather conditionsand shadows can be managed to avoid outages. "The good news is that we have enough reserves in the system to support up to 600MWp of solar or almost 50 times the total amount of solar currently installed in Singapore.

Despite the growing penetration of solar PV power, it is unlikely to be able to meet more than five per cent of Singapore's average energy needs in the foreseeable future.