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  Business Times 9 Aug 07
NATIONAL DAY SPECIAL ENVIRONMENT
Going green for a profit
Increasing investment in energy efficiency is reaping big rewards for the developers of environmental technology, learns MATTHEW PHAN

A WORD search for 'Singapore' and 'climate change' in the Straits Times turned up: 122 articles in the first six months of 2007, 44 in the second half of 2006, and 24 in the first half of 2006.

Three numbers do not a trend make, scientists will warn, but even so there is evidence Singapore is increasingly concerned about environmental management.

Recent moves in government policy and regulation are driving many changes. Activists and intellectuals have discussed the issue for years - meeting scepticism in previous decades - but things seemed to get rolling with Singapore's accession to the Kyoto Protocol in April 2006.

Shortly after the Kyoto signing, the Economic Development Board announced a $350 million fund for clean energy research and test-bedding, which adds to an existing $330 million fund for water technology.

The government is clearly targetting environmental technology as a next step forward in economic growth.

The National Research Foundation led a delegation to Europe to observe the latest in water, solar and green building technology. It is hoped clean energy will be a $1.7 billion sector with 7,000 jobs by 2015; separately, the environment and water industry also aims for $1.7 billion in value added and 11,000 jobs by 2015.

Singapore's own climate change strategy targets energy efficiency, chiefly in power generation and buildings. Natural gas-fired power plants are already running at 44 per cent efficiency, thanks to combined cycle technology, higher than coal-fired plants in the region.

Academics say efficiency could be pushed up to 80 per cent with localised power plants, because waste heat can be re-used. Oil majors ExxonMobil and Shell are building such co-generation plants within their multi-billion crackers under construction on Jurong Island; Australia's Natural Fuel is doing the same for its biofuel plant.

As for buildings, commercial and industrial structures account for about 15 per cent of Singapore's emissions. This is chiefly due to electricity consumption, of which over half goes toward air-conditioning.

The National Environmental Agency has launched programs like the Green Mark or Energy Smart, to reward efficient buildings and set a benchmark for others. It also launched the Energy Efficiency Improvement Assistance Scheme in 2005 to subsidise energy audits.

Over 40 buildings have applied, and so far, 13 office buildings, four hotels and one library have achieved the Energy Smart label.

Critics point out that this is a mere fraction of buildings here and more awareness is needed.

At a recent award ceremony for Energy Smart Hotels, Lee Siew Eang of the National University of Singapore's School of Design and the Environment told reporters many hotels did not even know they were inefficient.

And, when NUS conducted a survey of hotels' energy use, 'a few told us that energy efficiency is not relevant to them because theirs is a posh hotel', said Prof Lee. 'The mindset is that as a posh hotel their duty is to be extravagant.'

The incentive structure could be improved.

For example, as Reits start to dominate urban real estate, Joseph Chun, a law professor at NUS, said in a paper last year titled Are Reits Green?, that Reit's incentive structure emphasises 'short-term financial gains at the expense of sustainable social benefits in the long-term'.

The pressure is to enhance assets by increasing net lettable area (NLA) or improving facade, rather than reducing long-term energy costs. One way to align incentives could be to increase NLA for green buildings, he suggested.

Meanwhile, the SME sector is actively developing technologies and seeking to profit from climate change.

Some, like Boustead or Advanced Holdings, already provide equipment and services to petrochemical or oil and gas plants. So, for Boustead, it is a natural step to burning alternative fuels, like rice husks or biowaste, in small-scale plants.

Meanwhile, Advanced extracts contaminants like sulphur during the refining process itself, which cuts emissions and improves efficiency. It also wants to use algae to absorb a plant's emissions, and then use the algae for biofuel.

Other new technologies have emerged at Enviro-Hub, which licensed a method from India to melt and extract plastic from electronic goods, or Beng Kuang Marine, which plans to treat industrial sludge and turn it into construction material.

Many carbon projects from South-east Asia now come from Malaysia or Indonesia, economies based on heavy industry and agriculture.

But the next wave of carbon projects, generated by new technology that improves efficiency, could come from Singapore within 12 to 18 months, according to Erik Chan of EcoSecurities, which develops and finances such projects.

Said Mr Chan: 'There is a lot of activity in Singapore; it is inevitable the second generation will emerge.'
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