SINGAPORE: SOLAR HUB IN ASIA GOH CHEE KIONG EXECUTIVE DIRECTOR, CLEANTECH ECONOMIC DEVELOPMENT BOARD 29 TH JUNE 2015 1
Singapore s Solar Industry Strategy 2 2
Singapore has identified clean energy as a key growth area March 27 2007 Prime Minister Lee Hsien Loong S$350 million funding to grow Clean Energy with focus on solar energy announced by Prime Minister Lee in 2007 Announced in 2011: Additional S$195 million in R&D funding and S$300 million for National Innovation Challenge on Energy Resilience 3
Singapore is the regional hub for solar innovation and project development 1. 2. Epicentre for Innovation and Commercialisation New technologies, applications and business models Customisation for tropics Global control tower for project development and system integration Engineering centre Supply chain management Project development & financing 4
Singapore is the solar hub for Asia Pacific International solar companies Local solar companies 5 Wide range of regional HQ, R&D, system integration, project development and manufacturing activities *This list is not exhaustive
Singapore has a growing Energy Management Ecosystem Energy Management Systems Smart Grids/Microgrids Smart Utilities R&D team Total Energy Solutions Incubation team Grid Simulation & Modelling Home Energy Mgmt R&D team Regional Headquarters Smart Energy Business Incubation Centre Global HQ in cloud-based energy mgmt Smart Grids Centres of Competence/ Project Execution teams Advanced Metering Infrastructure 6 Centre of Excellence for Grid Simulation & Modelling Electric Vehicles Charging Service Provider Car Sharing Service Provider Developer of Smart Charging Network System Smart Communications Platform, Sales & Biz devt team for Asia Grid Analytics Co-Innovation Lab for Energy Mgmt & Demand Response Engineering Team for AMI Solutions Green Data Centres R&D and testbedding Smart Communications Platform, Project execution team Demand Response Demand Response Provider Asia Biz devt & Project execution teams Services Consulting services Asian COE for smart grids
4 main drivers to support industry growth 1 2 3 4 TECHNOLOGY MARKET CAPITAL TALENT Strong commitment to research & innovation Solar Energy Research Institute of Singapore (SERIS) Living labs with growing base of local projects Springboard to Asian Sunbelt market Growing base of project financing and VC/PE firms Specialised manpower training programmes and scholarships 7
Solar Energy Research Institute of Singapore (SERIS) Asia s top solar research institute, outside of Japan 5 research domains Novel PV concepts Silicon PV International Research Leaders PV modules Solar Energy Systems Solar & Energy Efficient Buildings R&D collaborations with industry Prof Armin AberleProf Thomas Reindl CEO Deputy CEO Cell cost reduction and efficiency improvement s All-backcontact high efficiency solar cells 8
SolarNova Programme Government taking the lead for solar adoption Accelerate solar deployment across government Central coordination and aggregation of solar demand by EDB & HDB Build up local capabilities in solar leasing and system integration Achieve cost savings, reduce carbon footprint & enhance energy diversification Opportunities to develop solutions to manage intermittency Target of 350 MWp of solar across government by 2020 Schoo ls Army Camps Public Housing Estates (HDB) Source: The Straits Times, 7 March 2014
Floating PV Testbed PUB aiming for energy independence (50% reduction) in water facilities in 10 years S$11 mil floating PV trial project by EDB, PUB and SERIS in Tengeh reservoir Encourage industry participation for R&D and testbedding Benefits: (i) improved solar module performance, (ii) reduced water evaporation Up to 1MW of 100kW systems in Phase 1, ~ 3MW of systems in Phase 2 7 PV companies have been selected for Phase 1 10
New Business and Financing Models 11 11
Innovative business models in the solar industry Solar Leasing (PPA) No upfront CAPEX required Users pay for solar electricity instead of systems Increasing system/tender sizes Direct Ownership/ Direct Hire ownership Purchase Customer pays a fixed monthly fee for a period of time until cost plus interest is recovered Rooftop Leasing Building owner provides rooftop space to solar company Solar asset owner exports solar energy to grid directly Offsite PPA Solar generated on rooftop is consumed at another location Backend accounting of green credits by retailer 12
Financing Mechanisms Business Trust Similar to yieldcos listed in the US e.g. Terraform Power and 8point3 Enables recycling of capital Green Bonds Allow private and public companies to tap on the bond market to finance solar assets Crowdsourcing Enabling Platforms Futures Market Enables hedging to help companies mitigate risk of future electricity price changes Exchange Platform Matchmaking of customers who want to install PV with system integrators 13 Allow investors to invest small sums into solar assets for a return over time
Project development and financing 14 14
Rise of ASEAN 600+ million population market with fast-growing middle class Growth Potential of ASEAN 1999 to 2012, ASEAN grew by 5.5% annually. Despite some headwinds, growth rates expected to sustain. ASEAN Economic Integration AEC a region with free movement of goods, services, investment, skilled labour & freer flow of capital. 15 15 *List not exhaustive
16 ASEAN: promising RE market supported by microgrid solutions Growing Energy Needs ASEAN s demand for energy is expected to increase by 80 percent between 2013 and 2035 RE expected to be one of key contributors Rural Electrification One in five of Southeast Asia's 600 million people do not have access to electricity Countries pushing for rural electrification e.g. Indonesia intends to complete 90% of electrification by 2025 Geography of ASEAN Geography of ASEAN requires offgrid/ microgrid solutions 17,500 islands in Indonesia 7,100 islands in the Philippines
Singapore is the Ideal Platform to Access Growing Solar Markets in APAC INDIA Promising solar market Target of 100GW by 2022 CHINA Largest solar market in the world Target of 100GW in 2020 17 THAILAN D Largest solar market in Southeast Asia with >500MW of installed capacity Target of 3GW by 2021 APAC world s largest solar market ~50% of global PV demand 35% annual growth from 2013 SINGAPOR E JAPAN 2nd largest market in the world 12 GW expected to be installed in Japan in 2015 AUSTRALIA >3GW installed capacity RE target of 23% of electricity supply by 2020
Vibrant project development & financing ecosystem Project Developers / System Integrators Equity Players RE Debt Financing Advisory / Consultancy First Business Trust Framework in the World Multilateral/Export Credit 18
Solar Plus 19 19
Singapore Aspires For Leadership In Sustainable Energy Management Natural gas trading hub; vibrant energy derivatives market GENERATION SOURCES World-class grid infra in stability and efficiency TRANSMISSION & DISTRIBUTION LOADS Sophisticated implementation of behavioural economics for energy users High solar penetration with leading expertise in intermittency management Demand response adoption and acceptance Thriving EV/car sharing ecosystem Integrated approach to develop global leadership in sustainable energy management 20
Singapore s Key Clean Energy Initiatives SolarNova Floating PV GENERATI ON SOURCES Singapore Power Centre of Excellence TRANSMISSION & DISTRIBUTION REIDS Energy Demonstrator at Semakau LOAD S Demand Response EV Phase 2 EcoCampus Energy Storage Programme 21
Smart Grid and Microgrid Innovation Platforms Singapore Power Centre of Excellence S$30 million investment to build up our national grid operator s innovation capabilities Companies to leverage partnership to establish R&D and business activities in Singapore Near-commercialisation technologies for electricity, gas, cooling and comms networks Singapore Power Centre of Excellence Renewable Energy Integrated Demonstrator Singapore (REIDS) Southeast Asia s first hybrid micro-grid which will test integration of solar, wind, tidal, diesel, storage and power-to-gas technologies at Semakau Landfill 22