Growing New Industries that Promise Economic and Non-economic Benefits

Mdm Speaker, as a nation, we have always prided ourselves on our ability to think long term and our willingness to defy conventional wisdom about our limitations.

Water is a prime example. In the 1990s, few thought we could move towards some degree of self-sufficiency in water supply. But two decades on, Singapore is making good progress on this front and in the process also built up an economically relevant water-related technology sector. We can turn necessity into opportunity. We can do what is needed for security and turn it into exportable know-how.

Singapore faces two other limitations which can likewise be turned into opportunities: food and energy, both of which are largely imported.

First of all, I shall speak on indoor farming, which is a growing form of urban farming where crops are grown in a highly controlled environment, protected from the elements. In indoor farming, environmental factors such as the exposure to light, water, humidity and the temperature are carefully calibrated to create an optimal environment for crops to grow.

In 2013, Panasonic Factory Solutions Asia Pacific opened a major indoor vegetable farm in Singapore in one of its factory buildings which illustrates these techniques. Panasonic started with 10 types of vegetables in its 248-square-metres facility. By March 2017, Panasonic aims to increase the number of crop varieties to 30 and aims to supply 5% of local vegetable production, up from the 0.015% in July 2014. This is not an insignificant target given that all local farms currently produce only 8% of all the vegetables consumed in Singapore. While Panasonic's crops are currently grown in a soil-based environment as opposed to soilless methods that have been gaining popularity, the company is looking into R&D to boost yield, including vertical farming which utilises vertically stacked racks for space optimisation.

Vertical indoor farming is not completely new in Singapore. In fact, the Government has collaborated with local company Sky Greens to develop a low carbon footprint vertical farming system. Sky Greens began its commercial operations in 2012 and was able to produce 800 kilogrammes of vegetables daily in 2015.

Mdm Speaker, with more investment in R&D, there is every reason to believe that the current price difference between indoor farmed and conventionally farmed vegetables will fall over time.

We are still some distance away from the scale of production seen in other countries where more land is readily available for indoor farming. The world's largest indoor farm in Japan spans 25,000 square feet and produces 7.7 million heads of lettuce a year.

The Government has acknowledged the potential of the sector. To this end, the Government announced the launch of a $63-million Agriculture Productivity Fund (APF) in end-2014 that replaced the Food Fund Scheme. However, only $0.69 million of the $63 million has been disbursed in the year since the launch of the APF. According to a Government statement in October 2015, this $0.69 million, or less, had been shared among 20 local farms owned by 17 companies. It is unclear how much of the Fund was disbursed to Singapore-based companies.

I believe that there is much more that can be done to encourage local firms to excel in this field. We should recall that indoor vertical farming is a high-tech, knowledge-intensive activity that requires the integration of many different types of expertise. Singapore, as a developed country with limited land and high population density, offers a good test bed. If economic development agencies adopted a proactive approach of grooming local Singapore-based SMEs to develop leading-edge technology and know-how in indoor farming, Singapore could be producing an even higher share of our consumption needs and developing an exportable sector that could contribute to our economy.

The Workers' Party would also like to propose that the Government go beyond what is currently being done in urban farming and develop some of our underground space into large-scale indoor vertical farms.

It was reported in 2013 that the Government was exploring various uses of underground space. The then-Minister for National Development suggested that, "We can try to push the boundary of usage [of underground spaces] – to experiment, to learn and to evolve practical innovative solutions – so as to prepare for the future."

We believe that large-scale indoor vertical farming should be given due consideration for the use of our underground space in Singapore.

The world's first underground farm opened in mid-2015 in the heart of London, in a WWII air raid shelter 33 metres under the ground. In London where space comes at a premium, an enterprising firm has found an innovative and sustainable way to grow crops and deliver them to restaurants in under four hours.

The benefits of underground vertical farming are, essentially, three-fold. Firstly, food security. Underground indoor farming promises to protect our food supply from catastrophic events, security threats, crop disease and so on. As for affordability, new technologies have enabled higher crop yields for indoor farming. Sky Greens, for example, has been able to produce at least 10 times more yield per unit of land area versus conventional methods. The world's biggest indoor farm in Japan has claimed to be 100 times more productive than traditional farms.

Certainly, not all our food supply can come from underground vertical farming; there are still price differences but it is moving in a positive direction.

Secondly, sustainability. The amount of water used in indoor vertical farming has been found to be substantially lower due to the layout of the racks and the implementation of water recycling features built into the system. The underground farm in London uses 70% less water than traditional farming. Indoor farming also reduces shrinkage, which is loss of crops during transportation. The much-shorter journey from the farm to the marketplace also means that the crops remain fresh for longer periods after they reach our shelves.

The third benefit is developing expertise and IP for our economy. Singapore is well-positioned to become a global leader in the field of underground urban agriculture. Our local enterprises can be nurtured to not only operate indoor farms effectively in Singapore for the benefit of Singapore and Singaporeans, but also to cultivate expertise in designing, installing, implementing and managing such facilities in similar high-density urban environments around the world. That could be an exportation sector for our economy.

Mdm Speaker, with more investment and governmental promotion, we can develop a sizeable indoor vertical farming sector, not to completely replace imported food – that is not practicable in the short term – but to mitigate our dependence on imported food and harness economic benefits from a new and knowledge-intensive exportable sector.

Next, I would like to speak of another such sector: renewable energy and in particular solar power generation.

Solar photovoltaic (PV) power generation is the most relevant renewable energy technology for Singapore – or one of the most relevant, certainly – given our equatorial location and relative lack of feasibility for other renewable energy sources, such as biomass, wind, tidal, hydro-electric or geothermal.

Countries are finding that shifting towards renewable energy enhances energy security and economic stability in the face of volatile global fossil fuel prices. Moreover, the cost-effectiveness of technologies such as solar PV technology is continuing to improve rapidly. The cost of solar panels has come down by a factor of five in the past six years and is expected to halve in the next 20 years. The solar power sector globally has grown by over 10% a year for the better part of a decade and is now worth over $3 trillion.

Domestically, solar power would help to build up industrial capacity and create good jobs within the entire supply chain, from maintenance to operations, to research and development. In particular, there is an opportunity for Singapore to develop leadership in the deployment of solar power generation in dense urban environments. This could be know-how that is developed, internalised and then exported by our locally based companies.

As early as 2007, "cleantech" was identified as a key economic growth area by the Government, which led to EDB's Clean Energy Initiative. In recent years, EMA has also introduced a number of enhancements to the regulatory framework governing the interaction of intermittent renewable sources with Singapore's electricity grid.

Spending on solar power is dwarfed by current public spending on fossil fuels. It is no doubt necessary to invest in and upgrade our infrastructure for oil, natural gas and LNG in the short to medium term. However, there is room to invest more on solar energy in several ways.

Firstly, more can be done to exhaust opportunities for rooftop solar panel deployment. In this regard, we are fortunate that most housing in Singapore is public housing, which facilitates the achievement of this goal. In October 2014, HDB began awarding the zero-dollar solar leasing tender, meaning that the full costs of solar PV systems are borne by the PV developers. In June 2015, HDB called the first consolidated tender under the SolarNova programme for 220 megawatt peak, which is a small fraction of the estimated six megawatt peak of solar capacity that is potentially available, according to estimates in Singapore. This initiative was leading to the installation of solar panels at some 5,500 HDB blocks. We can be more aggressive here and set a goal to install solar panels on every HDB building roof by 2025.

Secondly, more should be done to study and exploit opportunities in unorthodox solar panel deployment, such as on water bodies. PUB has been looking into building solar panels on the Tengeh reservoir and Choa Chu Kang waterworks. One that is being built in the UK – that is, water-borne solar panel deployment – is reported to cost about £3.5 million or about S$7 million, and will generate around three megawatt. The UK deployment covers an area about half the size of Bedok Reservoir, which is one of our smaller reservoirs. Solar panel deployments across all our reservoirs and also some available parts of our territorial waters outside of established sea lanes, could contribute significantly to energy production. Japan has floating solar panels in Hyogo prefecture and is now working on building the world's biggest floating solar farm in Chiba prefecture by 2018.

Mdm Speaker, these measures by themselves will not enable us to replace fossil fuels in the foreseeable future. But they will tilt the balance towards greater energy security, lower carbon footprint and exportable economic opportunities for Singapore-based firms to develop expertise in managing, maintaining and deploying urban solar panels, in the same way that Singapore firms have cultivated expertise in urban master-planning and industrial park design and management, expertise that has been very successfully exported.

Above all, there is a need for us to examine the facts and then set a stretch target for what percentage of energy consumption should be achieved by solar by, say, 2030.

According to a recent paper by the Clean Energy Committee of the Sustainable Energy Association of Singapore, a conservative projection suggests that the capacity available for solar generation in Singapore is actually 17% of electricity demand in 2025, far above the expected 7% that would be achieved by 2025 without government intervention. A recent study by the Solar Energy Research Institute of Singapore (SERIS) suggested that solar PV could contribute as much as 20% to the overall electricity mix by 2050 but that figure could be pushed to 30% under an accelerated scenario.

We suggest that a study be undertaken to assess what can be a feasible target for solar power as a share of total electricity generation by 2030, under both a conservative and a stretch scenario, so that we can debate how much should be invested, where and towards what goals in developing solar power generation in Singapore.

In short, we suggest a more aggressive approach to better exploit rooftop and water-borne opportunities for solar power generation, together with investments in R&D in areas such as electricity storage.

Mdm Speaker, in conclusion, we hope that these suggestions will lead to more fact-finding on the part of the relevant Government agencies, working with academia and the private sector so as to develop these two sectors as engines for economic and non-economic benefits for Singapore. We are at our best when we apply ourselves to overcoming our natural limitations.