April 17, 2012

Singapore: New Energy Conservation Bill passed in Parliament

Singapore now has a new Energy Conservation Bill, which aims to introduce mandatory energy management practices for large energy users in the industry and transport sectors.

The Bill also consolidates laws on energy efficiency under one Act.

The Energy Conservation Act will be jointly administered by the Ministry of Environment and Water Resources and the Transport Ministry.

Minister for the Environment and Water Resources, Dr Vivian Balakrishan, will oversee the measures for the industry and household sectors while the Minister for Transport, Lui Tuck Yew, will oversee the transport sector measures under the Act.

Moving the Bill in Parliament on Monday was Dr Balakrishnan.

He told the House that Singapore imports all its energy needs to fuel the economy.

He said: "The more we grow, the more we need to think of conserving energy and using it efficiently. Otherwise, we will pursue an ultimately unsustainable growth path. Today, countries face a stark choice - to compete aggressively for finite resources - this is not a viable option for a small city state with no natural resources like ours - or to advance towards a more energy efficient economy and more sustainable pathways to prosperity."

He stressed that for Singapore to continue being prosperous and secure, it must learn how to get more power, mobility, lighting, heating and cooling from less energy.

The key is to minimise wastage by focusing the minds of corporations and citizens on building and achieving breakthroughs in energy efficiency through more rigorous energy management practices.

Dr Balakrishnan stressed that this has to be a national effort.

Hence, Singapore's efforts on improving energy efficiency have been focused on raising awareness, building capabilities and incentivising the adoption of energy efficiency practices.

From next year, the Act will require that all large energy users in the industry and transport sectors that consume more than 15 gigawatt-hours of energy equivalent each year have to appoint an energy manager.

They will also have to monitor and report energy use and greenhouse gas emissions, and submit energy efficiency improvement plans.

Dr Balakrishnan said: "Large energy users in the industry and transport sectors were consulted by MEWR, MOT, NEA (National Environment Agency) and EDB (Economic Development Board) on the energy management practices to be mandated.

"In December 2011, the draft EC (Energy Conservation) Bill was released for consultation and subsequently revised to incorporate feedback received. MEWR and MOT, together with our statutory boards, will continue to engage stakeholders on the implementation details of the Bill."

The Bill also consolidates several existing standards.

These include the Mandatory Energy Labelling Scheme (MELS) and Minimum Energy Performance Standards (MEPS) for household appliances, and the Fuel Economy Labelling Scheme (FELS) for passenger cars and light goods vehicles under the Environmental Protection and Management Act (EPMA).

Meanwhile, eight MPs spoke in support of the Energy Conservation Bill, including opposition and nominated members.

Several had proposals on how to move Singapore towards the goal of being more energy efficient.

The Workers' Party suggested a greater shift towards use of renewable energy sources.

Dr Balakrishnan said Singapore's land scarcity and lack of natural resources mean it is an alternative energy-disadvantaged country.

So setting targets for renewable sources would be unrealistic.

Other suggestions made to push companies towards eco-friendliness include help to develop their expertise in this area, rebates for eco-minded firms and also tiered-tariffs so higher energy users pay more for electricity.

Associate Professor Muhammad Faishal Ibrahim, member of the Government Parliamentary Committee for Environment and MP for Nee Soon GRC, said: "To facilitate this transition, I would like to call on the government to adopt a humane perspective in allowing companies to coherently infuse into such a framework by providing the relevant assistance and support.

"This could be in the form of guidance and advice on management practices as well as providing grants for the expected costs some of these companies may incur in its journey towards realising an efficient energy-management culture."

Non-Constituency MP Gerald Giam said: "I suggested two tax rebates actually, for companies which achieve their energy-efficiency targets as well as those that attain the energy-efficiency certification that they will be assessed under. So, even though the tiered tariffs might result in some high energy users paying a bit more for their energy, this could be actually returned to the companies through the tax rebates.

"And in fact the tiered energy tariffs that will be imposed on the higher energy users could serve as a further incentive for them to reduce their overall bill, which actually would benefit them overall, economically."

Dr Balakrishnan said: "If I take your proposal to add another levy on top of the market price, it is a real burden on our industry sector. And if you say, well, let's just only target the big consumers, then you can start playing games by having a big company decide it has got multiple subsidiary units and qualifying for the low rate.

"All these are regulatory games, which I believe are counter-productive. The key point is that you have the right pricing for energy, it makes sense for everybody to save energy."


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