Q. Let's take up the point on how energy might be a disruptor. We've seen oil prices plunge over the past months and now they are hovering around US$50. We've seen the emergence of shale gas over the past decade, bringing new energy supplies to the market, and serving as a disruptor to the whole energy industry. So the energy sector is facing disruption, with major implications for other sectors, too. What is the impact on Singapore, today and in the future?

GOH SWEE CHEN When we look at the last five to 10 years, when the price of crude was accelerating, going above US$150, that was when the most number of innovations came through in our industry.

At that high price, it did encourage investments. The industry saw investments in renewables treble and in many cases rise more than five to six times. And the investment in these technologies has actually driven down prices of renewables. So the industry has seen that the cost of solar energy has gone down more than 60 per cent. Since 2011, the price of electricity per kilowatt hour from wind has decreased, and it's about as much as from gas. In fact, the cost of energy from solar sources is now lower than from gas.

So, in our view, in order to live in a world where we need to provide more energy but with lower CO2 emissions, we need to think about energy sources as being on a transition pathway. The transition from coal to oil to gas, renewables, and nuclear as well, is something the world needs to grapple with.

SUBODH MHAISALKAR There have been significant new investments in energy innovation. The investment in renewables in 2013 was higher than investments in fossil fuels. So, from that perspective, 2013 was a game-changer.

I'm very optimistic that this will continue, regardless of oil prices, for two reasons. First, renewables are really the simplest answer in terms of electrification of remote areas. The second reason is the realisation that this would be a start for addressing the low CO2 future.

ALVIN YEO Could I take up a point that Swee Chen made... In Singapore today, 95 per cent of our electricity is produced from natural gas. And that is expected to continue over the medium term. But interestingly, we have seen solar jump by 19-fold since 2010 to reach about 70 megawatts peak.

That's very encouraging and the question, again, is how does the Government work with businesses, as well as push some technologies, to make sure that in the future we have more of this renewables-mix?

So, for example, what the Government has done is to streamline the connection process to the grid to seven days. That's a major move. And, we have seen how Frank managed to bring together 800 different sites to power up Apple's operations in Singapore. That's a great example of innovation (See story on B4).

FRANK PHUAN Having been in the solar industry for the last 20 years, I have seen three waves of change. The first wave was that of feed-in tariffs, when government incentives were given to push the investments of renewables like solar, which usually has a high upfront cost.

The second wave has been the grid-parity wave. Grid parity means that we are operating at a point where the cost of producing renewable energy is on a par with your energy tariff. In some cases, renewable energy is even cheaper. For example, in Singapore, when our company offers to sell electricity to potential customers we actually offer discounts (on existing utility charges). So the very fact that we can offer a discount and allow customers to get savings is an economic benefit.

The third wave stems from what happened in Paris during the COP21 (climate change summit), which called for carbon reduction. So everybody, especially a lot of US multinational corporations, are now aligned in terms of carbon reduction. They come to our company, requesting carbon-free energy solutions. Apple, for example, made such a decision. It has been followed by many other US companies. I think local listed companies, because of sustainability reporting, will follow suit. When the third wave comes, it will be so huge that we will see supply falling behind demand for renewables.

Q. So when do you see this third wave coming?

JESSICA CHEAM It's already here.

PHUAN Yes. In the last six months, since the commitment made to COP21, we have seen a lot of companies approaching us for clean energy solutions that they don't mind paying a premium for. This has never happened in Singapore. Most of the time a typical Singaporean company will ask you, "How much savings do I get?" And if there are no savings, that's a no-go.

But nowadays, companies do approach us and say, "I don't mind paying a premium as long as it allows me to reduce carbon, as well as treat it like an energy hedge over a long period of time."

CHEAM I think the growing momentum behind the Paris Agreement, which Frank mentioned, has everyone talking about CO2 price. They know it's coming in some form. It might be as in China, where they have a cap-and-trade system, or it might be like in Europe, where they have a fixed carbon price. But whatever it is, businesses realise that in this business environment, if you do not price in the carbon risk, if you do not price in climate-related risks, your business model might not be feasible. And so that's driving the investments.

Governments are also cognisant of that fact. That they are parties to the UN Paris Agreement also means they now have a responsibility.

In some countries, governments play a stronger role than others. In Singapore, the Government is very persuasive, and that's good, because the Government sets the legislative framework and it also sets the incentives for businesses to adopt these energy solutions.

In this respect, in some areas, the Government is doing better than others. I would say in solar, it has been taking the lead in recent years. But in other areas, like electric vehicles, they have been a little slow.

Q. Why is that?

MHAISALKAR Going for solar is really a no-brainer. But what needs to be realised is that for any solution with renewables, it has to be coupled with energy storage.

What has happened in the past five years with energy storage is you've seen up to 50 per cent reduction in the costs of batteries. So if you look at battery pricing, we are now down to about $350 per kilowatt hour. The forecast is over the next five years, that $350 per kilowatt hour is likely to come down to $200. So that will have a two-fold impact. The first impact is it will be even easier to couple the energy storage with solar, which is already price-competitive.

The second impact it will have will be on electric vehicles. It is forecast that within the next five to 10 years, the electric vehicles will be more or less on a par with internal combustion engine vehicles. So from this perspective, I think we are really in for quite a revolution in terms of what would be possible in terms of CO2 reduction by use of electric vehicles. If you convert practically all of our buses and 60 to 80 per cent of our taxis to electric vehicles, it would reduce our CO2 emissions by up to 30 per cent.

Q. So why do you think electric vehicles are not getting as big a push?

MHAISALKAR Solar has taken off because it's made business sense. With electric vehicles it has not made business sense so far. For several reasons. The first reason is the cost of batteries, which we see coming down tremendously.

The second reason is it still needs six to eight hours to charge an electric car. So that revolution is also coming. Fast charge solutions from a battery perspective are coming.

The third aspect of it is availability of charging stations. And that is also changing. All of these factors are converging to a solution. Last factor, perhaps, one would just argue is the range. On a full charge, a car like a BMWi3 would give you 140km in a place like Singapore. For the most part it's good enough. But the next-generation vehicles would give you 200km to 250km in terms of range.

Q. In a city like Singapore, this would make eminent sense?

MHAISALKAR Absolutely...

PHUAN The availability of the charging points is an issue. Also, from the grid perspective, if everybody owns an electrical car, and everybody goes home and charges their cars at the same time, the consumption curve of Singapore would look very different.

Q. But you could use differential pricing to manage that?

PHUAN Yes, I think we are on the verge, but it will take a little bit of a push from the Government.