Recommendations and Strategies by the Economic Strategies Committee
The Economic Strategies Committee (ESC) has completed its work and has submitted the report of its key recommendations to the Prime Minister. The report is released today and can be downloaded at the ESC website.
The ESC was formed in May 2009 to:
develop strategies for Singapore to build capabilities and maximise opportunities as a global city in a new world environment, so as to achieve sustained and inclusive growth.
The ESC is chaired by Tharman Shanmugaratnam, Minister for Finance, and comprises members from the government, the labour movement, the private sector as well as academia.
We must achieve higher productivity growth of 2 to 3 percent per year, enabling our GDP to grow on average by 3 to 5 percent per year over the next decade.
Increased productivity is not achieved merely through increased efficiency, but restructuring our economy to provide more room for rapidly growing and innovative enterprises.
7 Key Strategies:
- Growing through skills and innovation
- Anchor Singapore as a Global-Asia Hub
- Build a Vibrant and Diverse Corporate Ecosystem
- Make Innovation Pervasive, and Strengthen Commercialisation of R&D
- Become a Smart Energy Economy
- Enhance Land Productivity to Secure Future Growth
- Build a Distinctive Global City and an Endearing Home
Here’s the ESC’s recommendations on Smart Energy Economy in the report:
Become a Smart Energy Economy
As a small, resource-constrained country, we have to ensure that energy does not become a limiting barrier for Singapore’s economic competitiveness and growth. We also have to play our part in reducing carbon emissions as a responsible member of the global community. We must become a smart energy economy – resilient, sustainable, and innovative in our energy use.
The ESC recommends the following:
1. Diversify our energy sources
In the medium term, Singapore should explore coal and electricity imports to diversify both the fuel types and fuel source countries in our energy portfolio. The import of electricity is an option which can free up valuable land in Singapore. It could also allow us to tap on the significant renewable energy potential in our region, such as in the form of hydro-electricity or geothermal power.
For the long-term, we must continue supporting innovation and investing in the infrastructure necessary to develop renewable energy. We should also study the feasibility of nuclear energy, a possible option in the long-run to meet baseload electricity demand, as well as energy security and sustainability imperatives. Advances in nuclear technology will make it much safer than earlier designs, and we should carefully study its viability for a small city-state like Singapore.
2. Invest early in critical energy infrastructure
Push ahead to establish Intelligent Energy Systems (IES) as the centrepiece of a smart energy economy. The IES will promote greater competition among retailers and enable households to make informed choices on their electricity consumption. At the same time, the IES will incorporate devices such as smart meters and home automation networks to programme appliances to function during off-peak hours when electricity prices are lowest.
Make early investments in public goods such as energy infrastructure to improve national energy security and efficiency. One example is the liquefied natural gas (LNG) terminal which will allow Singapore to gain access to global gas markets. Investing in the extension of the gas pipeline infrastructure can also potentially reduce the cost of electricity and open up new economic clusters in Singapore.
Develop Jurong Island as an energy-optimised industrial cluster. We should harness innovative systems-level solutions, to provide integrated, low-cost and low-carbon solutions for the industry clusters on the island. For example, recycling waste heat from industry for desalinating sea water; the desalinated water would then be channelled back to industry for cooling industrial processes, forming a virtuous cycle. With government planning and infrastructure investment to enable such “exchanges”, we can significantly improve resource efficiency.
3. Increase energy efficiency
Step up measures to promote energy efficiency for buildings, industry and in homes. We should enhance incentives, education and adopt essential legislation such as mandatory energy audits which will help build energy conservation know-how and internalise energy management practices.
Support low-carbon solutions in transportation. We should continue the shift of commuter load to public transport and support the introduction of clean and efficient technologies for public buses. This will ensure that energy-efficient public transport can be realised without higher prices for commuters. We should set the appropriate incentives for the adoption of clean vehicle technologies for private vehicles by awarding the Green Vehicle Rebate (GVR) based on fuel efficiency or carbon emissions of the vehicle.
4. Price energy to reflect real costs and constraints
Price energy to reflect its total cost, taking into account various externalities and constraints, such as energy security and environmental sustainability. Appropriate price signals could both promote the use of, as well as encourage investments in energy-efficient and low-carbon solutions.
The Government should study how best to implement a carbon pricing scheme in anticipation of future carbon constraints, should there be a global agreement on climate change. It can also insure us against future spikes in energy prices. This should be carefully calibrated and introduced gradually, with offsets for specific groups like low income households to buffer the transition.