31/10/2013
Energy prices unlikely to fall despite plans to raise S'pore LNG supply, say analysts - Channel NewsAsia
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Energy prices unlikely to fall
despite plans to raise S'pore LNG
supply, say analysts
By Sharon See
POSTED: 30 Oct 2013 22:05
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Singapore's plans to increase its supply of liquefied natural
gas (LNG) will boost energy security for the country, say
analysts. But they warn consumers not to expect lower
electricity prices in the long run.
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SINGAPORE: Singapore's plans to increase its supply of liquefied
natural gas (LNG) will boost energy security for the country, say
analysts.
But they warn consumers not to expect lower electricity prices in the
long run.
About 90 per cent of Singapore's electricity is currently generated
from natural gas that is imported from Malaysia and Indonesia via
pipelines.
The plans to increase the supply of LNG to meet growing electricity
demands are expected to strengthen the country's energy security.
Melissa Low, energy analyst for National University of Singapore’s
Energy Studies Institute, said: “This means that we've managed to
diversify our energy sources and tap on newer, perhaps
unconventional sources of gas from the Middle East.
"(And) possibly even in the future, from the US, and that might result
in greater opportunities, (for example) more jobs for Singapore."
But experts are not expecting electricity prices in Singapore to go
down.
Ms Low explained: “We have been used to (piping) natural gas from
Malaysia and Indonesia, and now we have this LNG terminal, which
definitely will enhance our energy security because then we have a
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31/10/2013
Energy prices unlikely to fall despite plans to raise S'pore LNG supply, say analysts - Channel NewsAsia
pool of natural gas available to us at easy disposal. So that definitely
it helps a lot.
“I think what we should be worried about is (the cost) because LNG
is not cheap. It could be at par in some cases with piped natural gas
but it's more expensive because of the technology to actually
refrigerate that and send it over.
"So the logistics costs are also there… (Hence) the cost of
producing our energy is not cheap.
“As energy gets (scarcer) around the world… China and India, these
countries are going to start demanding more and more energy for
domestic growth.
"Traditional exporters of LNG or gas such as Brunei, Indonesia and
Malaysia may start to import LNG as well for their own domestic
demand. As a result, they might export less to countries like
Singapore who depend on them.”
Renewable energy sources such as solar power and wind energy
have been touted as possible options in the future.
But experts said these are likely to account for only 15 per cent of
Singapore's energy supply in the long term.
Nilesh Jadhav, programme director of Nanyang Technological
University’s Energy Research Institute, said: “They're having studies
done that we could put in a lot of solar panels on our rooftops
because we don't have free land available for solar.
"But that would possibly contribute five to 10 per cent of our total
energy in the future. At the moment it is really very small.
“We're (also) not blessed with a lot of wind… so wind resources are
limited. But then through research and through better technologies
that could harness even lower flow wind turbines -- for example,
harness the wind energy at an even lower wind speed -- we could
actually enhance the motion of wind.
“The third resource I can think (of)... are sea currents -- there is tidal
flow that we could harness, so people have been harnessing that, for
example, in the UK.
"So this, I think, would contribute another five per cent. So we are
looking somewhere in the range of five to 15 per cent from the
renewable resources that I mentioned.”
Ms Low said: “The government has been expanding its solar
capacity. The Housing and Development Board has been putting up
enough solar panels in Punggol and so on.
"But due to grid capacity and... cloudy skies in Singapore -- we call
that dispersed irradiation -- sunlight can't come through as much as if
it were in the desert, for example.”
Experts believe the best solution is to keep energy efficiency high.
Mr Nilesh said: “Our surest bet for now, I think, would be energy
efficiency. I think we should think about how to decrease our demand
rather than keep on increasing our demand.
"Actually some colleagues in the US, for example, they are surprised
that we're not doing any shift in efficiency because even at 10 to 15
cents of price of electricity, they're doing it and we, at 25 to 28 cents,
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Energy prices unlikely to fall despite plans to raise S'pore LNG supply, say analysts - Channel NewsAsia
are not doing it yet.”
Observers believe government policies are well-aligned to maximise
energy efficiency.
They said that efforts to encourage more energy efficient buildings
and products may cost a small premium to build, but the savings will
be much higher in the long run.
- CNA/gn
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