State-of-the-art facilities at the Pfizer trigeneration plant
Several cogeneration plants, including some biomass-fuelled and at least one trigeneration installation, operate successfully in the liberalized energy markets of Singapore — without any particular support from the government. But generation over-capacity may stifle further growth for a while, writes Benjamin K. Sovacool.
An equatorial island between Indonesia and Malaysia, and home to a growing population of 4.7 million people but only 700 square kilometres of land, Singapore is one of the most densely populated countries in the world. The country imports most of its energy for domestic use. Furthermore, the country's 193 kilometres of coastline and uniform temperatures make Singapore at potential risk from increases in sea level and sudden changes in climate.
In response to these pressures, Singapore has developed a distinct approach to energy policy. The government does not subsidize any form of energy supply and encourages competition through a liberalized electricity market framework. Generally, development and implementation of combined heat and power (CHP) and distributed generation (DG) technologies (perhaps remarkably) are occurring with minimal government interventions.
Figure 2. Fuel mix for the Singaporean electricity sector, 2007
This article investigates what's going on and why is it successful. It begins by exploring the dynamics of Singapore energy policy before detailing six case studies of cogeneration and trigeneration facilities. The article finishes by looking at the opportunities for the expansion of CHP and DG in Singapore.
The dynamics of Singaporean energy policy
Singapore is a highly developed city state with vibrant industrial and commercial sectors and is one of the world's largest shipping ports. The country, nonetheless, does not possess a significant endowment of natural resources and relies heavily on imported fuels to generate electricity and deliver energy services. In 2007, for example, more than 97% of the fuel used to produce electricity in Singapore was imported. The bulk of Singapore's electricity generation is from natural gas which is relatively abundant in Indonesia and Malaysia.
Singapore imports more than one billion cubic feet per day (mcf/day) through 2319 kilometres of natural gas pipelines (and associated long-term take or pay natural gas contracts totalling more than US$33 billion), see Table 1. Currently, Singapore depends predominately on natural gas-fired power plants to generate about 80% of its electricity, with the rest coming from a collection of oil, diesel, and waste incineration generators, see Figures 1 and 2.
The government, interestingly, takes a unique approach to energy and electricity regulation. Singapore's electricity market framework attempts to ensure a ‘level playing field' for all types of generation technology and fuel mixes. Central to this strategy is ensuring that the wholesale and retail electricity markets are competitive, and that the markets harness competition to drive down costs through improvements in innovation and efficiency. Both the electricity and natural gas markets are liberalized, an environment spurred by several important acts of legislation (including the Energy Market Authority of Singapore Act, the Gas Act, and the Electricity Act).
The 2001 Energy Market Authority of Singapore Act formally established (perhaps unsurprisingly) the Energy Market Authority (EMA), a statutory board in charge of regulating the electricity and gas markets in Singapore and promoting competition in these markets.
The EMA aims to protect the interests of consumers with regard to prices, reliability, and quality of electricity supply and services, and performs the functions of economic and technical regulator. The EMA also promotes economic efficiency in the electricity industry and oversees a regulatory framework for the electricity industry that promotes competition and fair and efficient market conduct.
The 2001 Gas Act extended EMA oversight to cover the shipping, retailing, management, and operation of natural gas and liquefied natural gas facilities.
The 2001 Electricity Act, the most sweeping of the three, restructured the retail market for electricity, began the process of privatizing government-owned electric power plants, and encouraged private investment in the electricity sector.
Informally, while Singaporean regulators have added a host of voluntary agreements, two are the most notable: The Singapore Green Plan 2012 and the National Climate Change Strategy. The Singapore Green Plan 2012 focuses on promoting cleaner power plants, refineries, and vehicles as a way to improve ambient air quality. It sets voluntary standards to reduce energy consumption, states the government's preference for cleaner forms of electricity supply, and publicizes the importance of recycling and maintaining air pollution levels within ‘good' ranges for at least 85% of the year. The government has also formulated a progressive National Climate Change Strategy noting the importance of a variety of different mechanisms, ranging from energy audits and appliance standards to managing traffic congestion and improving the fuel economy of vehicles, to cut energy use and greenhouse gas emissions. One essential component of this strategy is the endorsement of CHP and DG, which leads to higher overall thermal efficiency and thereby better utilization of energy fuels.
GE Jenbacher biogas engines at IUT Global Singapore
The existing regulatory environment and other incentives create a market, as shown in the next section, amenable to CHP and DG.
CHP and DG applications in Singapore
Even in the absence of government subsidies and other direct financial incentives, a variety of different users have begun employing CHP and DG units in a wide range of scales and applications. While Singapore boasts 10,453 MW of total installed electricity capacity as of July 2008, roughly half of that supply utilizes combined cycle power plants and about 15% harnesses the use of cogeneration. As a comparison, in terms of percentage these numbers are highly favourable to the United States, where less than 1%—3% of electricity supply is in the form of CHP and cogeneration (depending on the season).
This section explores six case studies in detail: an 815 MW cogeneration facility at SembCorp Cogen, a 6.0 MW organic waste bio-methanization facility at IUT, a 4.6 MW trigeneration facility owned by Pfizer Incorporated, a 1 MW cogeneration facility owned by ecoWise that combusts household waste, a 996 kW cogeneration unit at Novartis, and a 530 kW ECO SWM cogeneration facility fuelled by wood waste.
Cogeneration at SembCorp
In November 2001, SembCorp Cogen (a joint venture between SembUtilities and Tractebel) replaced three oil-fired steam units with one US$450 million, 815 MW, cogeneration combined cycle power plant (powered by GE's Advanced Frame 9FA gas turbines), which produces steam and electricity simultaneously. Running at peak production, the facility generates 650 MW of electricity and 500 metric tons of steam per hour. The plant houses two gas turbines with dual fuel capacity and one condensing steam generator with extraction for the supply of steam. The company sells the generated electricity to the competitive wholesale market and sells the steam and water to a string of petrochemical manufacturers and refineries on Jurong Island.
Bio-methanization at IUT
IUT Global, a Singapore-based environmental waste management company, operates a 6.0 MW bio-methanization plant near Tuas that processes 800 metric tons of organic waste per day. The facility collects, screens, and processes organic waste (typically discarded food) and then converts it into two commodities: biogas for electricity and heat generation, and nutrient-rich compost to be used as soil for local organic farms and landscapers. At full capacity, the US$40 million plant reduces more than half the amount of food waste delivered to local landfills for disposal. The biogas is harnessed for electricity generation in GE Jenbacher gas engines that provide enough power, not only to manufacture the compost and soil at the facility, but also to meet the electricity demands of about 10,000 nearby households.
Trigeneration at Pfizer
Pfizer Incorporated, a large international pharmaceutical company, began operating the first trigeneration facility in Singapore in 2006 at one of its $600 million ‘multi-purpose' plants near Tuas South Biomedical Park — where 265 employees manufacture pharmaceutical ingredients. Built at a cost of US$8 million with a nameplate capacity of 4.6 MW of power, the facility also generates up to 12 metric tons of steam and 2,500 refrigerant tons of chilled water per hour. Fired by natural gas, the trigeneration facility achieved 83% thermal efficiency in its first year of operation. It will help Pfizer reduce its annual electricity costs by about US$500,000 per year (and cut carbon dioxide equivalent emissions by 17% annually). The trigeneration unit is operated under a 15-year agreement with TPGS, a joint venture between Tuas Power Limited and Gas Supply Pte Limited, and the plant can be expanded to accommodate another 4.6 MW natural gas turbine to handle future demand for steam and electricity.
Cogeneration at EcoWise
In 2003, a subsidiary of ecoWise Holdings Limited began operating a 1 MW cogeneration facility fuelled by waste. The facility, which combusts trash, industrial wastes, and wood, provides 1 MW of electricity and 15 tons of steam per hour. Almost all of the fuel utilized by the facility comes from nearby industries, and plant operators have noted that the most prevalent forms of fuel during the past year have been copper slag, wooden crates, and pallets from major shipyards. The steam from the facility assists in the drying of waste and acts as a centralized dryer for dehumidifying spent grains and heating International Shipping Organization tanks. Over the course of one year, the facility displaces the need to combust 6.1 million litres of diesel and reduces 15,200 tons of carbon dioxide emissions. The project has been successfully registered under the Kyoto Protocol's Clean Development Mechanism to sell 95,000 Carbon Emission Reduction credits, which are purchased by the Kansai Electric Power Company Incorporated in Japan.
Cogeneration at Novartis
In September 2007, Novartis AG, another pharmaceutical company, installed a natural gas cogeneration facility at their newest US$180 million production facility in the Tuas Biomedical Park. The system supplies electricity and heat for the factory, generating 996 kW of electricity and a thermal output of 1155 kW. The facility has an electrical efficiency of 39.4% but an overall efficiency of 85.2%, making it one of the most efficient in Singapore.
Cogeneration at ECO SWM
ECO SWM Pte Limited, another Singapore-based company, started operating a 530 kW cogeneration unit at its Vyncke plant, fuelled by wood waste, in 2005, making it one of the country's only renewable power facilities. The plant produces 530 kW of electricity and 15 tons of steam per hour, with some of the recycled energy used to power the plant's waste treatment processes and pollution controls, and the steam used to clean drums and wash International Shipping Organization storage tanks. The operator collects recycled wood and woody trash, transports and stores it at the facility, combusts it, and then disposes of any remaining waste, making it a ‘one stop integrated waste management facility.' Facility managers expect the unit to pay for itself from its fuel savings in less than three years.
Opportunities for CHP and DG in Singapore
The six case studies presented above demonstrate that CHP and DG units operate in a mix of different industries, at a number of different scales and capacities, and with a collection of different fuels in Singapore. Notwithstanding their present use, there are opportunities for more widespread adoption of CHP and DG in Singapore relating to: conversion of existing excess capacity to CHP, climate change and reliability of natural gas supply.
First, installed electricity capacity in Singapore exceeds existing peak demand. Roughly 57% of capacity does not operate continually. If all existing power plants are taken into account, and assuming that electricity demand grows at a rate of 5% per year, Singapore will not need to build any new capacity until about 2018. The existing capacity presents an attractive investment opportunity for more widespread adoption of CHP, as excess capacity can be converted to CHP generation at a lower cost than building new plants.
Second, investments in fossil fuelled infrastructure, even the form of CHP and DG, still emit greenhouse gases. Singapore has been conscientiously monitoring and reducing its carbon intensity (total carbon emissions divided by total Gross Domestic Product) and achieved a reduction from 28% in 1990 to 21% in 2007 — a noteworthy improvement. This was mainly due to the increased share of natural gas in electricity generation. Natural gas, depending on its quality and how it is used, has about half the carbon dioxide content of coal and oil.
Increasing environmental concerns present an unprecedented opportunity for the adoption of DG and power generation companies to improve their production efficiency through the adoption of CHP.
Third, electricity reliability has been a relatively well-managed issue in Singapore as disruptions in supply from natural gas pipelines has occurred only five times in the past few years (and disruptions were quickly resolved). The energy environment in Singapore compares favourably to the situation in the United States, where hundreds of pipeline ruptures occur each year — or Eastern Europe, where Russia consistently shuts off natural gas supply flowing through Ukraine. A majority of existing power plants, including many CHP and DG plants, rely on natural gas as their primary fuel, all of which is imported to the country. The relatively good track record in electricity and natural gas supply reliability creates additional incentives for the development of gas-fired CHP and DG in Singapore.
While CHP and DG technologies have not yet achieved their full potential in Singapore, many individual units are already economical to own and operate without any direct government incentives, subsidies, or intervention by regulators and legislators. A collection of Singaporean firms have invested in several cogeneration and trigeneration projects. These projects range from a few hundred kilowatts to hundreds of megawatts, frequently operating at efficiencies above 80%, utilizing a variety of fuels (including natural gas, wood, and waste), and producing electricity, steam, chilled water, compost, and heat. They are owned by a variety of players, from power providers and industrial users to special companies and joint partnerships, some that have payback ratios as rapid as three years.
Rather than dictating where these units should go and how they should operate, Singapore has instead left it to the market to decide — and their adoption is a testament to the efficiency, environmental performance, and economic competitiveness of CHP and DG systems as a whole.
Dr Benjamin K Sovacool is an assistant professor at the Lee Kuan Yew School of Public Policy, part of the National University of Singapore.
All views expressed in this article are those of the author and do not necessarily represent the views of the Lee Kuan Yew School of Public Policy.
The author is grateful to Sharon Chuo and Sean Lam from the Energy Marketing Authority of Singapore, and Ramanan Suryanarayan and Venkat Kannan from GE Energy, for providing much of the data for this article.