abhishreshthaa
Abhijeet S
PowerSeraya Limited is one of the key energy players in Singapore, generating about 30% of the country’s energy needs through its multi-utilities platform. With a primary focus on generation and retailing of electricity, the company also offers steam, water as well as physical oil trading and storage services. Its core business with a licensed generating capacity of 3,100MW is situated on Jurong Island - Singapore's oil, gas and petrochemicals hub.
PowerSeraya sells electricity to customers through its retail arm, Seraya Energy, and manages fuel purchases through its physical oil trading arm, PetroSeraya. Its operations are supported by its corporate office located at HarbourFront. PowerSeraya was spun off from Singapore Power to become a Temasek Holdings-linked company in 2001. On 6 March 2009, the company was divested from Temasek Holdings to become a wholly-owned subsidiary of YTL Power International Berhad.
1. Political Factors
The primary political factors that can affect the entire industry are the effort of the Singaporean government to maintain the country as a clean and green city. Thus, it includes different climate change mitigation policy, extensive re-using of water, increasing recycling rates as well as continued introduction of the green spaces. As a result, different businesses have also been called to play their part, including different government agencies such as the Agency for Science Technology and Research, the Building and Construction Authority, International Enterprise Singapore and the Economic Development Board (Singapore Economic Development Board 2008).
In 2007, the Clean Energy has been elevated as a strategic growth areas for the country, thus a comprehensive blueprint has been drawn up in order to focus on the clean energy industry in the country, spearheaded by the Clean Energy Programme Office or CEPO (Singapore Economic Development Board 2008).
In terms of legislations and government regulations the Gas Act (Amendment) was passed by the Parliament in May 2007 and makes important changes to the Gas Act, that includes extending the regulatory oversight of the EMA that covers the shipping of gas, the retailing of gas, the management and operation of onshore receiving facilities as well as liquefied natural gas or LNG terminals, the production of town gas as well the importation of natural gas as well as LNG. It also includes the enhancement of EMA’s powers under the Section 38 of the Gas Act regarding the provision of the access to the relevant facilities as well as allocation of gas in offshore gas pipelines (Energy Market Authority 2008).
On the other hand, the Singaporean energy market is also in transition. The country is in the early stages of restructuring its electric power sector that transform the monopoly into a competitive market (). Singapore liberalized the energy industries and introduces competition in order to drive efficiency and keep the energy more affordable. This has been done by ensuring that the trading of crude oil and petroleum products were done by different private sector, where in the government does not impose any requirements for refiners or private oil companies that are operating in the country to hold a minimum stockpile. The reason behind the said action is to ensure that the benefits from competition in the generation are passed on to the consumers (International Energy Agency 2004).
Above all, it is also important to consider that there is growing awareness as well as the growing numbers of international pressure groups that are pushing the green energy.
2. Economic Factors
One of the important economic factors that can affect the performance of the company is the fact that the oil consumptions of Singaporean is increasing. The country had consumed 763,000 barrels per day or oil during 2005 showing a great increase of 15% compare to the data of 2000 ().
There is also an increasing rival that causes challenges to the leading of position of Singapore energy industry in the Asian market. This is due to the fact that there were new refineries in India that had began its production in 2000 that resulted to reduced Indian demand for imports of refined products. In addition, the Melaka refining complex in Malaysia had become a competitor. In 2004, Thailand declared its intentions to try to become the regional energy hub with the completion of Sri Racha oil center as well as the implementation of the generous tax incentives (Energy Information Administration n.d.).
As a result, the shortage of the oil storage space in Singapore has spurred expansion of the independent storage facilities. Major refineries hold about 88 million barrels of storage capacity, or total of 88% of the entire storage capacity of the country. It shows that in last five years the independent storage in the country shows growth of 90% in terms of capacity (Energy Information Administration n.d.). The said growth is due to the high regional demand.
In addition, the Singaporean petrochemical industry is also showing rapid growth due to the result of strong base in terms of petroleum refining. Thus, this is due to advantage of Jurong Island, considered as the center of the expanding petrochemicals industry of the country because companies in the said island have benefited from lower operating costs by creating a synergistic relationships, sharing facilities, integrated utilities, tax incentives as well as proximity to a vital regional markets (Energy Information Administration n.d.).
Another important factor is the changes in the price of oil. Recently the price of oil had increased by almost 300% to a more than US$75 per barrel. Aside from that it is also affected by the strong demand growth due to the energy-hungry rising economies of China and India (Energy Information Administration n.d.).
3. Sociocultural Factors
The main important sociocultural as well as trends in the behavior and cultures of the people focuses on the emergence of climate change. Primarily, the US and European countries are the one that is pushing different international laws and regulations which pertains on the said issue. As a result, more and more Singaporean are becoming aware of the said issue.
The United Nations Framework Convention on Climate Change reported that by 2050, Asia will contribute up to 37 billion tons of emissions or a total of 43% of the global emissions. This shows twice that of OECD countries.
As a result, people, as well as government are focusing on the efforts of local government and non-governmental organizations in Asia to reduce the different greenhouse emissions at the same time meeting the energy demands of the growing economies in the world (Ministry of Trade and Industry Singapore 2008).
As a result, more and more nations and companies are diversifying away from the fossil fuels to a renewable source such as hydro-electric and wind power and nuclear power. However, the nuclear power brings with the spectre of nuclear arms proliferation (Ministry of Trade and Industry Singapore 2008).
4. Technological Factors
The government focuses on different programs and plans that focuses on research and development process for the energy industry. The Singaporean government has committed its S$350 million or equivalent to US$228 million in order to develop the country as the global clean energy hub over the next years, including S$170 million or US$111 million from the National Research Foundation or NRF. The main focus of the project is the solar power, but the industry development will also extend to the fuel cells, wind power, tidal power, energy efficiency as well as different carbon services.
In connection to that, the Clean Energy Programme Office or CEPO stated their initiative to grow the clean energy development as well as internationalization. This can be done by cluster development where in the country focuses on attracting major international companies, groom local companies in order to become world-class players. The said action is supported by the technology development where in some of the initiatives consist of competitive funding that will help to improve the R&D capabilities, as well as building
PowerSeraya sells electricity to customers through its retail arm, Seraya Energy, and manages fuel purchases through its physical oil trading arm, PetroSeraya. Its operations are supported by its corporate office located at HarbourFront. PowerSeraya was spun off from Singapore Power to become a Temasek Holdings-linked company in 2001. On 6 March 2009, the company was divested from Temasek Holdings to become a wholly-owned subsidiary of YTL Power International Berhad.
1. Political Factors
The primary political factors that can affect the entire industry are the effort of the Singaporean government to maintain the country as a clean and green city. Thus, it includes different climate change mitigation policy, extensive re-using of water, increasing recycling rates as well as continued introduction of the green spaces. As a result, different businesses have also been called to play their part, including different government agencies such as the Agency for Science Technology and Research, the Building and Construction Authority, International Enterprise Singapore and the Economic Development Board (Singapore Economic Development Board 2008).
In 2007, the Clean Energy has been elevated as a strategic growth areas for the country, thus a comprehensive blueprint has been drawn up in order to focus on the clean energy industry in the country, spearheaded by the Clean Energy Programme Office or CEPO (Singapore Economic Development Board 2008).
In terms of legislations and government regulations the Gas Act (Amendment) was passed by the Parliament in May 2007 and makes important changes to the Gas Act, that includes extending the regulatory oversight of the EMA that covers the shipping of gas, the retailing of gas, the management and operation of onshore receiving facilities as well as liquefied natural gas or LNG terminals, the production of town gas as well the importation of natural gas as well as LNG. It also includes the enhancement of EMA’s powers under the Section 38 of the Gas Act regarding the provision of the access to the relevant facilities as well as allocation of gas in offshore gas pipelines (Energy Market Authority 2008).
On the other hand, the Singaporean energy market is also in transition. The country is in the early stages of restructuring its electric power sector that transform the monopoly into a competitive market (). Singapore liberalized the energy industries and introduces competition in order to drive efficiency and keep the energy more affordable. This has been done by ensuring that the trading of crude oil and petroleum products were done by different private sector, where in the government does not impose any requirements for refiners or private oil companies that are operating in the country to hold a minimum stockpile. The reason behind the said action is to ensure that the benefits from competition in the generation are passed on to the consumers (International Energy Agency 2004).
Above all, it is also important to consider that there is growing awareness as well as the growing numbers of international pressure groups that are pushing the green energy.
2. Economic Factors
One of the important economic factors that can affect the performance of the company is the fact that the oil consumptions of Singaporean is increasing. The country had consumed 763,000 barrels per day or oil during 2005 showing a great increase of 15% compare to the data of 2000 ().
There is also an increasing rival that causes challenges to the leading of position of Singapore energy industry in the Asian market. This is due to the fact that there were new refineries in India that had began its production in 2000 that resulted to reduced Indian demand for imports of refined products. In addition, the Melaka refining complex in Malaysia had become a competitor. In 2004, Thailand declared its intentions to try to become the regional energy hub with the completion of Sri Racha oil center as well as the implementation of the generous tax incentives (Energy Information Administration n.d.).
As a result, the shortage of the oil storage space in Singapore has spurred expansion of the independent storage facilities. Major refineries hold about 88 million barrels of storage capacity, or total of 88% of the entire storage capacity of the country. It shows that in last five years the independent storage in the country shows growth of 90% in terms of capacity (Energy Information Administration n.d.). The said growth is due to the high regional demand.
In addition, the Singaporean petrochemical industry is also showing rapid growth due to the result of strong base in terms of petroleum refining. Thus, this is due to advantage of Jurong Island, considered as the center of the expanding petrochemicals industry of the country because companies in the said island have benefited from lower operating costs by creating a synergistic relationships, sharing facilities, integrated utilities, tax incentives as well as proximity to a vital regional markets (Energy Information Administration n.d.).
Another important factor is the changes in the price of oil. Recently the price of oil had increased by almost 300% to a more than US$75 per barrel. Aside from that it is also affected by the strong demand growth due to the energy-hungry rising economies of China and India (Energy Information Administration n.d.).
3. Sociocultural Factors
The main important sociocultural as well as trends in the behavior and cultures of the people focuses on the emergence of climate change. Primarily, the US and European countries are the one that is pushing different international laws and regulations which pertains on the said issue. As a result, more and more Singaporean are becoming aware of the said issue.
The United Nations Framework Convention on Climate Change reported that by 2050, Asia will contribute up to 37 billion tons of emissions or a total of 43% of the global emissions. This shows twice that of OECD countries.
As a result, people, as well as government are focusing on the efforts of local government and non-governmental organizations in Asia to reduce the different greenhouse emissions at the same time meeting the energy demands of the growing economies in the world (Ministry of Trade and Industry Singapore 2008).
As a result, more and more nations and companies are diversifying away from the fossil fuels to a renewable source such as hydro-electric and wind power and nuclear power. However, the nuclear power brings with the spectre of nuclear arms proliferation (Ministry of Trade and Industry Singapore 2008).
4. Technological Factors
The government focuses on different programs and plans that focuses on research and development process for the energy industry. The Singaporean government has committed its S$350 million or equivalent to US$228 million in order to develop the country as the global clean energy hub over the next years, including S$170 million or US$111 million from the National Research Foundation or NRF. The main focus of the project is the solar power, but the industry development will also extend to the fuel cells, wind power, tidal power, energy efficiency as well as different carbon services.
In connection to that, the Clean Energy Programme Office or CEPO stated their initiative to grow the clean energy development as well as internationalization. This can be done by cluster development where in the country focuses on attracting major international companies, groom local companies in order to become world-class players. The said action is supported by the technology development where in some of the initiatives consist of competitive funding that will help to improve the R&D capabilities, as well as building