Business Times 2 May 08;
GREEN power is starting to take root here. But it will need more encouragement by the authorities (read: incentives) for it to flourish.
Amidst rocketing oil prices - which impact on the fuel costs of power plants here and consumers, in turn, feel the pinch - some Singapore players are starting to look at how they can meet growing utility demands by using alternative or renewable feedstock.
Sembcorp Industries got its first taste of biomass at its Wilton coal/gas-firing plant in the UK back in 2004, when it burnt tallow or solid cattle fat (which it successfully bid for cheaply in an auction) as fuel, earning 'green certificate' revenues in the process. And late last year, it opened a $193 million wood-firing biomass power plant there, making it the first such large-scale industrial power facility in the UK to be fuelled entirely by renewables. These include green crops like Willow coppice specially grown nearby, as well as waste wood from sawmills, furniture, packaging and other industrial activities. It now wants to replicate this in Singapore, with plans to use refuse-derived fuels - tapping on its waste collection business here - as well as heavier oils, like off-specification products from the oil refineries, to fire a new co-generation plant that it plans to build on Jurong Island.
Sembcorp chief Tang Kin Fei says that given today's high oil prices, this will help it move from using just natural gas (which is contractually pegged to oil prices) to other cheaper alternatives that will allow it to produce competitively-priced steam for petrochemical industries there. It disclosed its plans last month the same time as Indonesia's Medco Energi announced it had entered into a $55 million biomass plant joint venture here with Singapore's Biofuel Industries. The latter is in the wastewood business here and their 24.8 megawatt cogeneration plant in Jurong will use horticultural and industrial waste wood as fuel. The Indonesian partner - which is so far involved only in geothermal, coal and gas generation back in its country - hopes to learn from the Singapore experience to replicate this in eastern Indonesia, which has no natural resources like gas.
The Singapore joint venture, apart from making electricity sales to the Republic's electricity grid, hopes to also earn revenue from the sale of carbon credits to global customers under the United Nations' Clean Development Mechanism. The upcoming projects mark the start of what promises to be a 'green' revolution here in the power business. But will there be more to come?
The relevant authorities here, be it the National Environment Agency, Energy Market Authority or Trade and Industry Ministry, will need to come up with a concerted plan of action, including possibly some form of carbon trading mechanism, to really see it take off.
