August 2nd, 2012
08:35 AM GMT
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Editor’s note: Outlook is CNN's in-depth look at business climates around the world. To August 12, 2012, we’re focusing on Singapore.

Singapore (CNN) – 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 center 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 center 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 U.S. 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% of the world’s population,” says Enger. “Nevertheless, there have only been limited installations of solar in the region. In 2009, some 91% 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.

CNN’s Outlook series often carries sponsorship originating from the countries we feature. However CNN retains full editorial control over all of its reporting.

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Filed under: Outlook Singapore

soundoff (11 Responses)
  1. Kheng Chan

    Sir, Your print function does not exist and therefore not a very friendly page, "Command 'Print'" includes all the other side rubbish that I do not want. I suggest you employ a better team, CNN sure can afford that.
    Thank you.

    August 3, 2012 at 4:28 am |
  2. Ags Solar

    Great read here, I really hope they can pull it off by 2015

    August 3, 2012 at 7:23 am |
  3. Paul

    Such BS. Its Singapore their talking about. Thats a very very small part of SE Asia. 30 million people live in poverty here in the Philippines where the government won't spend a peso on renewable energy. Most of the governments in the region are corrupt and do nothing for the environment. As far as Nestle, lets talk about deforestation and palm oils.

    August 4, 2012 at 12:55 am |
  4. M. Straub

    Another form of energy ready to join in the fight for much of the region is Ocean Thermal Energy Conversion (OTEC). It creates an endless flow of power from the temperature difference in shallow and deep water. It's been proven for decades, and the cost is affordable compared to fossil fuels across Southeast Asia. Also, to give Paul a little hope, the Philippines is currently exploring OTEC options as part of their feed-in-tariff program. Basically, OTEC is happening now around the world, and it's the kind of technology that give hope to millions of a cleaner, more affordable energy future today, and for generations to come.

    Lots more on how OTEC works at The On Project.

    August 8, 2012 at 3:47 am |
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