Singapore recently announced a new carbon tax of $5 per ton of greenhouse gas emissions that will be applied to the nation’s top 30 to 40 organizations that produce 25,000 tons or more of emissions. The new tax aligns with Singapore’s pledge in support of the Paris Agreement to reduce emission intensities by 36 percent from 2005 levels by 2030. Over the first five years, the tax is expected to generate nearly $1 billion in revenue. After which, the government will reevaluate the program and determine whether to increase the tax to $10 or $15 per ton by 2030. While these are positive steps in reducing Singapore’s carbon footprint and curbing the culprits in industries like petrochemicals and refining, they may lead to the unintended consequence of increased energy prices overall.
How, you may ask? Power generation companies will be directly impacted by the new carbon tax, as they fall within the top 30-40 companies responsible for 80 percent of the nation’s emissions. To offset this new tax and preserve their profits, they will pass costs onto customers. The first payment for the carbon tax will be due in 2020 based on 2019 emissions, which means that retail energy prices will likely increase starting next year.
Since the carbon tax is a flat rate, the building sectors that consume the most energy will be those hit the hardest when the energy price increases take effect. While Singapore has been praised as the top performing smart city globally by Juniper Research, there is still much room for improvement when it comes to reducing KWH consumption in the built environment. In fact, energy usage is on the rise due to the increasing demand for cooling, driven by a growing population, a changing climate that produces warmer temperatures, and an amplified demand for comfort.
The biggest opportunity for savings is to increase the efficiency of a facility’s ACMV (Air-Conditioning and Mechanical Ventilation) system. The all but inevitable increase in energy pricing, spurred by the new carbon tax, and Singapore’s aggressive Paris Agreement pledge, should add extra motivation for building owners and managers to prepare now. This is where BuildingIQ’s technology can help. The first step to reducing a building’s KWH consumption is measurement. BuildingIQ’s 5i Platform of technology-enabled services provides a combination of visualization, analytics, control, and optimization.
Visualizing energy data across a portfolio creates transparency into how a building’s operating budget is being used. Using this as a base, BuildingIQ can apply Artificial Intelligence (AI) and data science to decode the energy data and create insights that identify energy drains within a building and operational benefits that increase efficiency. The next layer is continuous adjustment of building controls using the platform’s cloud-based capabilities. Lastly, using accurate predictive analytics based on advanced modeling of a building’s behavior, the platform can provide automatic optimization for maximum efficiency.
The technology-enabled services serve as a journey to energy efficiency. Some buildings may only need the visualization, while others may be ready to cross the finish line with continuous optimization. However, with the Singapore carbon tax and higher energy prices on the horizon, those buildings that are not at least actively measuring energy usage are far behind.
Singapore is making strides in becoming more energy efficient within its built environment and has the potential to serve as a key example of building energy efficiency for its neighbors in Southeast Asia.
Roy Arindam, VP of Sales at BuildingIQ, is responsible for direct and channels activities across South-East Asia, Australia and New Zealand. He has an extensive experience across energy optimization technologies, building automation systems, integrated extra low voltage systems (IELVS- OBSI), energy metering and reporting solutions, fire detection and fighting solutions, and security solutions.