Jamie Lee, Business Times 17 Jul 08;
BUSINESSMEN in the renewable energy sector crossed swords with the government yesterday as the two camps debated the use of subsidies to lower energy costs in a roundtable discussion.
The discussion 'Is Singapore Ready for Renewable Energy', at the Lee Kuan Yew School of Public Policy, concluded on a pessimistic note as industry players said Singapore - which is pumping substantial funds into green research - was not developing a sustainable market by shunning subsidy options.
Energy players Phoenix Solar and Conergy Renewable Energy Singapore suggested Singapore explore feed-in tariff systems or power purchase agreements (PPA). Under a feed-in tariff system, consumers are offered an incentive for every kilowatt hour of clean energy fed into the grid over a set number of years, said Stefan Mueller, Asia-Pacific managing director of Conergy Renewable Energy Singapore, adding that Germany rewards every kilowatt hour of feed-in with the equivalent of 40 Euro cents under a guaranteed payback period of 20 years.
Phoenix Solar suggested looking into PPA, under which utility companies pay for the feed-in tariff but recover the cost by raising the general retail tariff, said the company's managing director Christophe Inglin. He said that based on calculations over about 30 years, the maximum tax on the current retail tariff of about 25 cents/kwh would not exceed 0.3 cents/kwh. Based on an average consumption of 381kwh per month for a four-room HDB flat in 2007, the monthly surcharge would be limited to $1.15, Mr Inglin said.
But the government has rejected subsidies to avoid market distortion and to encourage energy conservation, said David Tan, deputy chief executive of the Energy Market Authority.
'We do not subsidise energy. We believe in the right pricing of energy because by pricing energy correctly, that would drive certain behaviour in consumers,' he said. 'As a result of that behaviour, we believe consumers will learn to conserve energy. The government has no plans to implement feed-in tariffs.'
The Building and Construction Authority (BCA) is focused on raising energy efficiency through its $20 million Solar Capability Scheme that rewards developers that build certified environmentally friendly buildings and by pumping $50 million into research to develop green building technologies, said Tan Tian Chong, BCA's director of technology development division.
'Energy efficiency is a low- hanging fruit that is not going to cost us very much,' he said.
The government has said it will invest $350 million to develop clean energy technology. It expects to create a $1.7 billion clean energy industry here that will hire 7,000 people by 2015.
