Government sets up S$22m grant to help companies go green

Channel NewsAsia 6 Nov 08;

SINGAPORE: Going green saves costs for companies, but making that first move is not always easy.

To nudge companies along the green path, the Ministry of Environment and Water Resources (MEWR) announced a S$22 million grant on Thursday.

Implementing energy-saving measures could be as simple as switching to energy-efficient bulbs or as complicated as changing industry processes that could save a company tens of thousands of dollars.

The new Grant for Energy Efficient Technologies (GREET) scheme will co-fund up to 50 per cent of the costs incurred – capped at S$2 million per project – when companies buy energy-efficient equipment and technologies.

Many companies have given the feedback that energy efficiency is not necessarily their highest priority, especially in these troubled times. Instead, their focus – especially for small- and medium-sized enterprises (SMEs) – is on improving product yield and getting quick paybacks.

Recognising these issues, MEWR's Senior Parliamentary Secretary Amy Khor said at least part of the grant will be earmarked for SMEs.

She said: "We think that for SMEs, there may be a lot more obstacles such as lack of information and other concerns. Capital constraint is another concern."

As for the current economic slowdown, Dr Khor said there is also a flipside to the situation.

"Due to the economic slowdown, many of these industries may have (more) shutdown time. It's a good time to review operations and decide where they can cut costs. Energy efficiency is one area that is often overlooked," she said.

The grant comes on the back of another scheme that was launched some three years ago to help companies conduct energy audits.

Unfortunately, only about 12 per cent of the firms went on to implement green cost-saving measures, primarily due to initial capital costs. The new GREET scheme hopes to plug that gap now.- CNA/so

New fund for green projects
Main concern for companies is long payback time
Lin Yanqin, Today Online 7 Nov 08;

THE funding is already available to get companies to find out where they stand in energy efficiency. But, not enough companies are taking the next step of doing something to make better use of energy to save costs.

To give companies a push in the right direction, the National Environment Agency (NEA) has earmarked $22 million to co-fund up to half the cost of implementing energy efficiency projects, capped at $2 million per project.

A portion of this fund will be set aside for Small and Medium Enterprises (SMEs), who face capital constraints when it comes to investing in energy efficiency.

“There’s a clear case of under-investment in energy efficiency in Singapore,” saidDr Amy Khor, Senior Parliamentary Secretary for the Ministry for the Environment and Water Resources, launching the scheme yesterday at the Energy Efficiency Investment Forum.

Consultations with firms had shown that they were more concerned with investing to improve productivity and getting returns quickly. SMEs in particular found the payback period of an energy efficiency project — usually around three years — too long, said Dr Khor.

With the economy now in a crisis, some industry sectors — like the semi-conductor industry — have even put off their energy efficiency investments totally.

Hence, the new fund - called the Grant for Energy Efficiency Technologies (GREET) — is intended to shorten the payback period. NEA would ask for more funding if response is good, said Dr Khor.

Lawrence Leow, president of the Association of SMEs welcomed the new fund, which he said energy-intensive SMEs would find useful. “Some SMEs have been alarmed by the rising energy prices, so they should consider making use of this grant,” he said.

These projects can be anything from switching to a more efficient air-conditioning system to retrofitting equipment like chillers.

Energy service companies (Escos) also highlighted other issues to address at the forum yesterday.

Sustainable Energy Association of Singapore chairman Edwin Khew pointed out that local banks were less open to lending for energy efficiency investments compared to international banks, even though such schemes have low risks and quick returns.

Energy solutions company Johnson Controls’ regional manager (South-east Asia and India) Sarah Montgomery added that while there were incentives schemes targetting various phases of an energy efficiency process, more could be done to promote continuity from one stage to another. “For example, there’s incentives for the design stage, but something could be done to somehow get them to make use of grants for carrying projects out,” she said.

Indeed, while there have been 119 successful applications for NEA’s energy audit assistance scheme, only 16 went on to actually implement recommendations from the audit. These 16 firms, according to NEA, are enjoying annual savings of$4.83 million as a result.

The Escos were also optimistic about business prospects in spite of the gloomy economic climate. “Yes, demand might be affected somewhat, but no matter what, energy costs can be about 30 per cent of a company’s overheads, and we’re in the business of helping them lower costs,” said CPGreen vice president (energy and environmental) Derrick Hong.

More about GREET on the the E2 Singapore website.

$22m carrot for firms to step up energy efficiency
NEA to subsidise up to half a firm's spending on green technology and equipment
Tania Tan & Amresh Gunasingham, Straits Times 7 Nov 08;

THE Government is dangling a new carrot to get companies to bite into energy efficiency.

Yesterday, the National Environment Agency (NEA) announced a $22 million fund to help firms defray the cost of buying green technology and equipment.

As initial investments in energy efficiency can reach millions of dollars, only a handful of firms have embraced the practice. The new fund is designed to change that, said Dr Amy Khor, Senior Parliamentary Secretary for the Ministry of the Environment and Water Resources.

Up to half a company's spending can be subsidised, to a maximum of $2 million. Firms need to submit a proposal to get the money.

An unspecified portion will be set aside for small- and medium-sized enterprises, which make up the bulk of companies here, said the NEA.

'If take-up is good and the fund runs out, we'll be more than happy to expand the project,' Dr Khor said at an investors' forum yesterday.

Energy efficiency has been 'largely overlooked' by companies, she said. 'Understandably, they're more concerned about overheads.'

While the initial investment can be substantial, firms stand to save in the long run by conserving power, said experts. That is especially true due to the 20 per cent electricity price hike.

Instead of tightening their belts, companies should take advantage of the economic downturn and invest in energy efficiency, said Mr Edwin Khew, chairman of the Sustainable Energy Association of Singapore. 'Payback is guaranteed,' he said.

Sixteen companies under a separate programme by the NEA have already saved $4.8 million in annual power bills by doing things like improving air-conditioning systems, said the agency.

Subsidies will also mean that companies will likely see payback on their initial investments within three years or less.

But some are still not sold on energy efficiency. 'Given the grim economic outlook, why not provide tax breaks instead of co-funding,' said Alstern Technologies executive director Sam Cheok Whai.

Mr Lai Wan Fong, who heads a steel manufacturer, said: 'I believe my company is too small to invest in such technology.'

NEA puts up $22m grant for energy-saving projects
Jamie Lee, Business Times 7 Nov 08;

COMPANIES wanting to go green can now tap a $22 million fund to offset costs amid the tighter credit market.

The National Environment Agency (NEA) launched a grant yesterday that would co-fund up to half of the cost of energy-saving equipment or technology, or $2 million per project, which ever is lower.

Part of the grant will be set aside for small and medium enterprises (SMEs), which are likely to be more constrained by financing, said Amy Khor, senior parliamentary secretary for the environment and water resources.

'What we're hoping to do is to shorten the payback period,' she told reporters.

Some SMEs have put green plans on hold because of capital constraints brought about by the financial turmoil, while others are side-stepping energy efficiency projects because they are not part of their core businesses, Dr Khor said.

'We thought that implementing (the grant) would be very timely,' she said.

Edwin Khew, chairman of the Sustainable Energy Association of Singapore, urged local banks to support green projects despite the tight credit situation.

'In most countries, banks readily support schemes like these because it's environmentally friendly, the risks are very low, (and) they get very good returns,' he said. 'Hopefully, the banks will come around, especially the local banks.'

The association is looking to partner the Asian Development Bank and the World Bank in providing risk guarantees for energy- efficient projects.

While some companies have taken the first step of conducting energy audits, few have followed through with green projects.

NEA has received 119 applications to co-fund energy appraisals that would save 339.2GWh or $29.8 million of energy per year when projects are implemented.

But just 16 companies have implemented projects, for a total energy savings of 80.2GWh or $4.83 million annually.

The new grant has been set up for energy-saving projects over the next five years. Dr Khor said that NEA was open to expanding and extending the fund if the take-up rate is good.