Powering the solar revolution

The global climate agreement inked in Paris in December could be a game changer for the solar industry and transform the international power landscape. LYS Energy, a Singapore-based Independent Power Producer, hopes to ride this new sustainability wave by providing solar users with everything they need to make the transition.

LYS main
LYS Energy, a Singapore-based Independent Power Producer, is currently installing about 10 megawatt of solar PV projects in the country, with a pipeline of more than 75 megawatt-peak (MWp) in the Southeast Asia region due for completion over the next couple of years. Image: LYS Energy

With the inking of a historic global climate agreement, the international energy landscape is set for what could be a new era. As 195 nations agree on a low-carbon path to cut greenhouse gas emissions, renewable energy will be a key weapon in the arsenal of tools to fight climate change.  Fossil fuels could be phased out gradually.

Even before the Paris agreement, investment in solar has been rising rapidly; in 2014, solar made up almost half of total clean energy investment in 2014, its highest share ever. Solar saw US$149.6 billion committed, up 25 per cent on 2013, according to research from Bloomberg New Energy Finance.

Over recent years, the solar industry in Singapore has similarly grown by leaps and bounds. From Choa Chu Kang Waterworks, the first water treatment plant to tap the sun for its energy needs, to Changi Airport, Southeast Asia’s first commercial airport with a photovoltaic (PV) power plant, solar installations are springing up across the island.

The growth is likely to continue as solar energy is expected to play a key role in the city-state’s target to slash greenhouse gas emissions. As part of its commitment to the Paris agreement, Singapore said it would reduce the carbon dioxide it emits per GDP dollar by 36 per cent from 2005 levels by 2030, with the aim of peaking its emissions by that time.

One homegrown company that hopes to ride this new wave of opportunity is LYS Energy (LYS).

Founded in 2013 by French citizen Lionel Steinitz, a former financial industry veteran, LYS has already won 10 solar projects in Singapore despite its young age. 

Steinitz, chief executive officer of LYS, decided to enter the industry when he realized that solar energy not only yields tremendous environmental benefits but also provides a steady, attractive source of income.

His first contact with the solar industry came in almost a decade ago when he advised his first client in the solar industry on how to structure a financial deal. That sparked his interest in sustainability, pushing him to learn as much about the space and how he can contribute.

“Along the way, I came to realise, through many testimonies and studies, that there was no hiding, no denying, that our industrial footprint was leaving scars on our planet,” Steinitz says in a recent interview with Eco-Business.

“Concurrently, while I was advising several institutions on renewable energy transaction, I came to realise that we actually could articulate a value proposition that was beneficial to the entire ecosystem: the users on one end, enjoying clean and cheap electricity, and the investment community on the other end, getting nice returns.”

That pushed him “over the edge”, as he put it, and he started LYS with a group of like-minded people. The team has expanded quite rapidly to 15 people today.

He set up LYS as an IPP, which builds, owns and operates PV systems for mainly commercial, industrial and public venues, and which provides solar energy through a Power Purchase Agreement (PPA) often coined as ‘solar leasing’.

Solar leasing is a scheme under which the solar company offers the full range of solar services to install solar PV systems on the unused rooftops and site spaces of customers, without little or no upfront cost to them.

This arrangement allows building owners to begin immediately saving on their energy bills without a huge initial investment, and solar firms to have a predictable cash-flow.

Driven mainly by the House Development Board, the PPA segment has extended rapidly in Singapore, Steinitz says. “In the private sector, the PPA model has also expanded the market, by appealing to clients who prefer not to commit up-front investment into something beyond their core business. It can be very attractive to have a rooftop PV system that reduces a building’s electricity bill, with no up-front cost to the building owner.”

Depending on the size of the PV system, the price of solar energy ranges from 12 to 18 cents per kWh in Singapore. Today, household electricity tariffs from conventional power are about 20 cents.

LYS is currently installing about 10 megawatt of solar PV projects in Singapore, with a pipeline of more than 75 megawatt-peak (MWp) in the Southeast Asia region due for completion over the next couple of years.

Presently, about 47 MWp of photovoltaic capacity is installed across Singapore, generating enough electricity to power 9,400 two-bedroom apartments.

By 2020, the Singapore government wants to raise the total installed solar capacity in the country to 350 MWp, with solar power being the mainstay in the country’s renewable energy strategy.

Steinitz believes that the government will not stop there. Despite being a land scarce and densely-populated country, Singapore has enough roof space to accommodate 2GWp of PV capacity.

The country can easily support 600 MWp of solar energy capacity without threatening grid stability, he says, citing research conducted by the government and the Solar Energy Research institute of Singapore (SERIS), a unit of the National University of Singapore.

Currently, more than 95 per cent of Singapore’s energy need is met by natural gas. 

The three pillars of the solar revolution

With the industry enjoying so much progress, Steinitz points to three reasons driving the solar revolution.

The first pillar is the rise of distributed power generation, that is, producing electricity at the point of consumption. Examples are solar PV systems installed in rural or in self-contained campus such as a universities

In remote areas with no access to the public grid, distributed renewable energy systems offer an unique solution to increase energy access” he says. 

The second pillar is the development of electricity storage in the form of batteries, which allow building owners to stockpile the excess solar energy generated during the day to use at other times when the sky is overcast. LYS’s Research and Development is already working on solar and storage solutions for users.

The third pillar is the so-called smart grid, or “the ability of buildings to talk to each other”, as Steinitz calls it.

Using sensors and predictive software, smart grids aim to automatically direct electricity to where it is needed, increase energy efficiency, and integrate renewable energy sources into power networks.

The technology is being tested on a small scale in many parts of the world, including Singapore, but it may be a few years before smart grids are used by utilities to manage electricity flow in towns and cities.

LYS strongly believes that there are the pillars that will support the revolution in energy, and the company working on eventually deploying all three solutions for customers.

Changing mindsets

 Despite the clear advantages of solar energy, many companies in Singapore and rest of Southeast Asia are still not adopting the technology; some companies still do not recognise that using conventional energy exposes them to rising energy costs if natural gas or petroleum becomes more expensive.

“They don’t take into consideration that solar gives you long-term cost stability whereas the conventional energy contracts are usually 18-24 months, and such contracts make them exposed to rising tariffs,” Steinitz says.

Beyond dollars and cents, other factors also play a part in making people switch from conventional to renewable energy. To find out what these factors are, LYS and the Sustainable Energy Association of Singapore (SEAS) are jointly conducting a market research study to better characterise the driving factors (both industrial and commercial) behind solar adoption in the region.

“The purpose of that survey is to answer very simple question: What will make consumers adopt solar energy?”

They hope to collect enough data to better understand why some companies behind trendsetters – the big firms that are already accounting for their carbon footprint in their annual reports and making efforts to offset that impact – and others become followers.

Prior to this marketing study, Steinitz did an audit featuring a survey and best practices among companies that have made the switch to solar, for a client which has 40,000 workers worldwide. The audit found that each employee was generating 1.5 tonnes of carbon dioxide every year, pushing the company to eventually partially offset that environmental impact by installing a solar plant in Singapore, where it has 400 staff.

“The 400 employees in Singapore will generate 2 tonnes of CO2 credit per year,” Steinitz says. “That’s the kind of metrics that’s increasingly important and visible to those companies.”

As companies in Singapore will be increasingly asked to increase their energy efficiency and embark on a low-carbon path, Steinitz believes that this will lead to a shift in mindsets and eventually behaviour.

“The energy revolution is upon us. In fact, the “energy transition”, as the Europeans like to name it, has already started,” he says. 

To participate in the LYS-SEAS survey on solar power adoption, click here to find out more. 

Did you find this article useful? Join the EB Circle!

Your support helps keep our journalism independent and our content free for everyone to read. Join our community here.

Most popular

Featured Events

Publish your event
leaf background pattern

Transforming Innovation for Sustainability Join the Ecosystem →