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  Business Times 7 May 07
Solar power the next big thing for S'pore?
After decades of gradual technical progress, demand is set to take off
By Matthew Phan

(SINGAPORE) The next five to ten years will be a golden period for Singapore, chairman of the National Research Foundation Tony Tan said at the close of a recent trip to Europe.

As golden as the sun, it turns out. Clean energy, driven strongly by solar power, could be a major engine of Singapore's growth by 2015, Dr Tan said.

Judging from the track record of the biomedical sector, this is not improbable - pharmaceuticals and medical technology contributed nearly a quarter of manufacturing value-added in 2006, up from virtually nothing as recently as 2000.

With the variety of alternative energy sources, why pick solar?

One misconception is that solar panels would be effective here because Singapore is so hot. While this is understandable - given the sweltering weather here - it may not be a true picture.

Scientists say that within a decade, Europe will be able to produce solar energy cheaply enough to sell it at a price comparable to that offered by existing power utilities.

Progress in solar technology is taking place not where the sun is hottest, but where business and manufacturing activity is located.

So while it is true that for Singapore, solar power might be a more cost-effective alternative than wind, wave, geothermal or hydroelectric energy, it is inaccurate to think that it would have a competitive advantage just because it is in the tropics.

Rather, the choice of solar demonstrates shrewd foresight.

According to Dr Tan, the solar industry is approaching a breakthrough - the above-mentioned point where solar power achieves 'grid-parity' - comparable to when desalinated water was first produced at a cheap enough price to compete with water drawn from natural sources like rivers and lakes.

Just as that breakthrough led to broader use of desalination, a breakthrough in solar cell production will lead to widespread adoption.

In effect, Singapore wants to quickly gain exposure to a sector that, after decades of gradual technical progress, is set soon to hit a point where demand could take off.

Given the technology gap, it looks like there are two ways to achieve this. First, Singapore can play the middle-man: the technology is in Europe, but the demand will come from Asia.

There are over one billion people without electricity in South and South-east Asia, many in rural areas without access to grid power, according to the Economic Development Board.

And as the overall production cost of solar cells falls, transport costs become increasingly significant, so manufacturing close to the market - like in Singapore - offers solar players an attractive alternative.

Singapore's second option, articulated by Dr Tan, is to exploit the gap in existing solar technology - it has worked well so far in cold, dry, temperate climates, but it is unclear whether hot, wet, tropical conditions will affect the effectiveness or durability of the modules.

By helping with the research, and providing a site for reliable test-bedding, Singapore could play catch-up, or even leap-frog.

But there's no guarantee that Singapore's success with water will automatically rub off on clean energy.

For one, Singapore has historically worried over water but only recently picked up the solar theme.

Further, the Public Utilities Board is a major customer of the water solutions and also oversees much research; for solar, the market is de-centralised and there is no equivalent agency to foster R&D.

The latter is why incentives to foster broad market demand and to stimulate innovation are critical.

The Energy Market Authority has been sensitive to the suggestion that it might subsidise solar generation, yet industry players have said it may be the most effective way to nurture a thriving domestic hub.

The government is still considering the best way forward; meanwhile, the solar scene in Korea and China is already throbbing. Industry players also say skilled manpower, and research institutes to jointly develop technology with industry, are essential.

The EDB argues that solar cell manufacture complements Singapore's existing skills in handling silicon wafers, material science and process engineering.

Meanwhile, according to Dr Tan, the NRF's initiative to attract foreign institutes - the so-called Campus for Research Excellence and Technological Enterprise (Create) programme - has drawn attention.

Singapore is building a critical mass of scientists and has increasing influence in high-tech sectors, he says. No wonder Dr Tan is so positive about the future. Yet, he noted at the same time: It feels strange that older people are more optimistic than younger people on this score.

Going forward, this is the challenge: to figure out how to bridge the disjoint in perception between the strategists at the top, who can see the golden horizon, and those in the trenches, who may not.

Sharing a vision is quite separate from the actual setting of strategic policy, but it is inseparable from policy success. Policies will not work unless warm bodies respond to incentives, learn related skills and get involved.

Dr Tan puts it well: There is a need to make the public, especially the young, 'realise the potential of what we are doing'.
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