Energy Consumption and Energy Efficiency Trends in Singapore: The Case of a Meticulously Planned City

Singapore is a small island-state and meticulously planned city. The lack of energy resources has underpinned its unwavering focus on energy efficiency. Yet to date it is unclear to what extent energy efficiency, or the so-called “hidden fuel” or “invisible fuel”, has contributed to reductions in its energy consumption. Using a comprehensive and unique set of energy and sectoral activity data, this study applies the energy intensity concept and index decomposition analysis technique to study the role of energy efficiency in reducing Singapore’s energy consumption from 2005 to 2018. The results obtained show variations across energy consuming sectors, but overall energy efficiency has led to significant energy savings. A composite energy efficiency index is also constructed to quantify the extent of energy efficiency improvement economy-wide over time. The performance as captured by this index shows a slower rate of improvement as compared to that given by the reduction in Singapore’s aggregate energy-to-GDP ratio. This development is similar to that observed in most OECD countries. The framework developed can be applied to the study of other major cities especially those in Southeast Asia. It should be noted that, while the approach used has been widely accepted in the energy efficiency literature, the energy efficiency trends derived are dependent on the activity indicators chosen to represent the useful work performed in the respective sectors. The results should therefore be interpreted in this context.