Capitalizing on the Energy Conservation Act in Singapore

The new Energy Conservation Act will change how the largest energy-consuming businesses in Singapore manage energy efficiency and emissions.

This paper looks at some of the specific requirements of the Act, and outlines a journey that businesses can take in their efforts towards compliance with the new Act. It also looks beyond compliance to the opportunities presented by energy management to reduce costs, improve efficiencies and support the drive to achieve high performance.

Nearly all of Singapore’s energy needs (99.8 percent) are met by imported fossil fuels; further, the country lacks both the size and geography needed for large-scale alternative energy. As a result, the government of Singapore is committed to increasing energy efficiency and reducing greenhouse-gas emissions.

The Energy Conservation Act has been introduced to complement existing legislation by further reducing energy intensity to make the country more competitive in the global economy. The new Act aims to introduce standards for energy management by unifying all sector-specific regulations. Up to now, energy conservation efforts have been driven across different sectors, under the authority of different government agencies, leading to inconsistencies and hampering unified national efforts.

The Act articulates the minimum energy-management standards to be introduced in April 2013, primarily affecting companies from the industry and transport sectors that consume more than 15 gigawatt hours of energy per year. Sections 27 through 30 of the act are of particular interest as they mandate:

• Periodic reporting of energy use (section 27).

• Keeping accurate records of energy consumption, emissions and improvement plans (section 28).

• Preparing energy-efficiency improvement plans (section 29).

• Appointing an energy manager (section 30).

The Energy Conservation Act requires companies to make important changes to how they manage energy. What seems a daunting administrative and operational task for some companies can be simplified by breaking down the process into seven key steps, as illustrated below.

Whilst following these seven steps can help in a company’s overall effort to comply with the Energy Conservation Act requirements, companies can also use the Energy Conservation Act as a catalyst for putting in place more advanced energy-management practices across the business.

Companies can respond to the Act in a number of ways, ranging from bare compliance to building long-term value through more advanced energy-management practices. Companies will have to choose the strategy that suits them best, depending on the maturity and readiness of the business to adopt a particular energy-management approach.

At its core, energy management helps to identify and eliminate unnecessary energy use, thereby increasing the overall energy efficiency of process, facilities and organizations. Enterprise Energy Management is the practical application of energy-management principles across an organization in a sustained way. By integrating best practice in people, process and technology management with structured and strategic governance, this approach leads to transformational change in how energy is procured and managed and realizes superior cost and energy savings as well as improved compliance.

Adopting an enterprise energy-management approach allows companies to manage their energy consumption better. Without such an approach, opportunities for improvement may not be promoted or implemented because energy management is not integrated into the organizational culture and planning process.

Companies who have adopted enterprise energy management have achieved impressive results.

Whatever their approaches to the new Energy Conservation Act, companies are being prompted to ask some important questions:

• What is our total energy consumption—and spend—across the business?

• Which facilities/processes/products are the most energy-intensive?

• What actions should we take to improve energy efficiency?

• What will be the roles and responsibilities of our energy manager(s) and what support will they need?

• What processes and tools do we need to report our energy use and develop improvement plans?

• What is the return on any incremental investments we make in energy management?

• How can we capitalize on the Energy Conservation Act and gain added value by going further than meeting the minimum requirements?

Of course, vital to decision-making is consideration of two further important questions:

• How much will it cost?
• How much will it save?

Accenture also recommends that companies take advantage of the assistance offered by the government via the Energy Efficiency Partnership.

Ynse de Boer is the managing director of Accenture’s Sustainability Services practice in the Association of Southeast Asian Nations (ASEAN) region, based in Singapore. He has worked for over a decade with senior executives of a range of private- and public-sector organizations on sustainability, strategy and execution. His industry experience spans sectors such as government, energy, waste and utilities as well as logistics, advertising and high tech. De Boer holds a Master’s degree in Mechanical Engineering from Delft University of Technology, in the Netherlands.