Singapore has no room for solar mirror farms, its coast is used for ports and shipping lanes and its tropical air may be ideal for holidaymakers, but no good to generate wind power.
Despite these natural disadvantages, the country is trying to position itself as a world leader in clean energy.
With strong capabilities in electronics, precision engineering and chemicals – essential for solar, fuel cells and biofuels – the government says its aim is to make the renewable energy sector contribute $1.36 billion to the island state’s gross domestic product and employ 7,000 people by 2015.
Its proximity to Malaysia and Indonesia, the world’s largest producers of palm oil- one of the main ingredients of biofuel – has also meant that Singapore is well placed to become a centre for Asia’s increasingly diversified fuel mix.
Companies such as Finland’s Neste Oil, which has a $1.2 billion biodiesel plant at the Tuas industrial area, is part of the push by the second generation of biofuel producers to make Singapore one of the centers of its operations.
Petri Jokinen, managing director of Neste Oil Singapore, said the maturity of the country’s refining industry was attractive for the company.
“The majority of Neste Oil’s growth is expected to come from its renewable fuels business division and it is expanding at the moment in two locations; one is Rotterdam in Europe and the other is Singapore,” he says. “We have established our global feedstock sourcing from this region, so it is natural to be located here.”
Danish windpower company Vestas Asia Pacific is another clean energy producer that has followed the trail to Singapore, moving its headquarters from Denmark just over four years ago to position itself closer to its market. Its R&D centre in Singapore is one of its largest outside Denmark.
“Asia is actually forecasting a higher growth in the wind energy industry compared with more stable markets like Europe,” a company spokesman said.
While development of solar power in South East Asia has been slow compared with developments in the US and China, solar companies are still optimistic about the prospects for the region.
Ole Enger, president and chief executive of Renewable Energy Corporation, whose company recently opened the world’s largest integrated facility for solar cells in Singapore, says Asia has yet to come to the solar party but offers tremendous opportunities.
In his opinion the experience in Europe has already shown that solar can stand on its own as a viable energy source.
“Currently the solar energy industry needs subsidies to compete in most markets,” Enger said. “Growth in the sector has to a large extent depended on end customer-incentive schemes in Europe and particularly in Germany.
“The rapid cost reduction driven by this growth has reduced the level of incentives needed and in Germany from 2004 until now the incentives have been cut in half. This year alone the European region is consuming double the amount of solar power it did last year and in Germany they consumed 7GW alone. That’s quite impressive,” he said.
Japan aside, where enormous strides have been made in the installation and development of solar power, Asia has lagged despite it being the perfect geographical fit for energy harnessed from the sun.
“Asian sunbelt countries constitute about 50 percent of the world’s population,” says Enger. “Nevertheless, there have only been limited installations of solar in the region. In 2009, some 91 percent of photovoltaic installations were outside the sunbelt.
“In Singapore and in the rest of the Asian region, there is such a large potential right outside the door,” he said.