This is our seventh instalment in the Smart Cities Expert Interview series. Niklas and I had the privilege to invite the CEO of SP Digital, Sau Sheong Chang, to join us in this discussion.
SP Digital, an energytech company, is part of SP Group, one of the leading utility companies in Asia Pacific. SP Digital builds and sells energytech products to power sustainability, focusing on renewables and energy efficiency. Their customers include airports, universities, shipyards, warehouses, commercial buildings and utilities.
Prior to joining SP Digital, Sau Sheong has a long career in the tech industry, working in well-known tech firms like Yahoo!, PayPal, HP, and Garena (now known as Sea Group).
We are delighted that he is the first Singaporean to join us for the Smart Cities discussion, as SP Digital plays a critical part in Singapore’s journey to become a Smart Nation.
Niklas: Thank you Sau Sheong for joining us today, it is a pleasure to meet you. Let us kick off the discussion with our first question. What do you see makes Singapore unique in the sense that it has held the No. 1 spot in the Smart City Index for several years in a row?
Sau Sheong: Sometimes it seems that Singapore has an obsession on rankings, and it is a policy by the government to be ranked No. 1 in many areas. Personally, I don’t put too much weight on the ranking.
As a city, Singapore is a liveable city. Human beings can live comfortably, securely and grow families in the city. There is technology to support the smooth running of the city. The “smartness” is driving the city to be more liveable for humans and families.
In my view, there are three main reasons that make Singapore a unique Smart City:
1) Singapore is a small island. It is a lot easier to manage, for example, in my industry: power and utilities. Looking at many other countries, the reliability for utilities and electricity network is not as strong as Singapore. If you are look at the System Average Interruption Duration Index (SAIDI), which measures how much time in a year a person encounters interruption in the power supply, some countries’ results are measured in hours or even days. In Singapore, it is less than a minute, one of the best in the world.
Of course, for bigger countries, there are more natural disasters and weather interruption that affect the transmission lines. In Singapore, we put our main transmission cables across Singapore in the 18.5km North-South Tunnel and 16.5km East-West Tunnel. There is little disruption to the transmission network, and this makes our network a lot more reliable.
We had utility poles previously and there are still some utility poles in Singapore, where going underground does not make sense. We thought ahead when we decided to dig the tunnels. It is not a cheap tunnel or a short project. It is more than 30km and it covers the entire country. This is a good example on how it takes foresight and pre-planning to create a better city.
2) The government is very much forward-looking, and they try to stay ahead of time. They are trying to do new things and experiment with new solutions. The Singapore government has been preparing for the Smart Nation for many years. They are willing to push the boundaries in order to bring benefits to the citizens.
3) There is uniformity in communication. Communication is critical when working towards becoming a Smart City. A lot of us, Singaporeans, are geared towards the same direction. We tend to engage and follow given instructions closely. The government gives a lot of push to make it easier.
Ricky: Tell us more about SP Group and how it is supporting the development of Smart Cities. What are some exciting initiatives / projects that you can share with us?
Sau Sheong: SP Group is the only utility transmission and distribution provider in the country. However, the power utility landscape is evolving quickly, and utility companies have been greatly disrupted by changing regulations, new technologies and changing consumer mindset towards sustainability. We need to keep up or become obsolete.
Five years ago, SP Group hired me to perform digital transformation. I came in with different set of ideas. In my view, there are four levels for the transformation:
After three years, we came out to setup SP Digital, which creates new products and business opportunities. It is one of the first unregulated business for the Group.
Utilities business is very operational in nature. Companies will buy utilities in tens of millions of dollars. In the new mode, the agile world, we need to turnaround and go faster. We decided to build our own intellectual property (IP).
SP Group is building “Smart Towns” in Singapore. In one of our businesses, Singapore District Cooling, we built a district-level cooling network, which we can centralise water cooling and pipe cold water to various nearby buildings to reduce overall energy consumption.
This is done at the well-known landmark, Marina Bay Sands (MBS). The infinity pool that is one of the most Instagrammable location in Singapore plays a part in the cooling process. The entire area has a lot of buildings and instead of having normal air-conditioning units, we have the DCS to drive down energy consumption by a great amount. We also take it one step forward by connecting to other buildings around the area.
Today, we look at a new town in Tengah. The government, Housing Development Board (HDB), approached us to talk about this project. How do we do centralised cooling? It is a similar technology in MBS, but not exactly the same. It does not have one centralised chiller. We connect different chillers in different buildings. In each HDB apartment, instead of an individual condenser, we pipe cold water to each home. We can do a “Smart Energy Town” that allows more digital capabilities.
For example, we can build Electric Vehicles (EV) charging station, solar power generation, battery storage and cooling for residential, schools and commercial offices. A Smart City is built up of smaller areas or Smart Towns. Several Smart Towns will form a Smart City.
Ricky: Can you elaborate on how SP Digital’s apps are benefiting consumers?
Sau Sheong: We also asked ourselves, “how do we give back more power to the consumers?” The new kind of consumers are all about having information and being in control. We developed a mobile app for consumers. They can pay their utility bills and monitor their utility consumption. The app shows half-hour reading of their utility usage. Moving forward, we would like to drive sustainability and put more capabilities in the hands of the consumers.
For example, one feature that we are developing is to the ability to connect with EV chargers. Singapore has a fleet of >300 EV charging points and >100 charging stations, which provide a mix of slow and fast charging. The app will allow the consumers to control, locate and pay for the charging.
We introduced Renewable Energy Certificates (RECs) for companies to contribute to the green movement. For example, if the company consumes 10MW of energy, they can buy 10MW of RECs to support to the solar movement. In Singapore, the Apple Stores are using 100% green energy and they are using RECs to cover their usage.
In the app, consumers are able to buy the smaller RECs and we are one of the first in the world to launch the product. We also have solar farms, which include rooftop solar from warehouses, windfarms in Vietnam and solar farms in Thailand.
Ricky: How is this linked to Smart Cities?
Sau Sheong: We drive engagement with consumers, and we drive people to be greener and more sustainable in their behaviours. There is a Carbon Footprint calculator [#SS3] in the app to help consumers to calculate their carbon contribution. We perform small surveys to help consumers to understand their electricity and water consumption.
Smartness is not based on pure technology. It is based on integrating human behaviour into the technology.
We use the app to nudge people to behave in a certain way. We are trying to enable people to be smarter. Smartness is not based on pure technology. It is based on integrating human behaviour into the technology.
Niklas: What suggestions do you have for cities who wish to become Smart Cities? Where should they start?
Sau Sheong: I’m not a big fan of telling people what they should do. Every city is unique, and it is not a single entity. It consists of individuals, communities, and districts – combining with one another to form a collective city.
We need to engage people at the ground level. The top-down approach is to build an over-arching infrastructure for the city. Another approach is a ground-up approach, where you engage with the individuals and the communities, encouraging them to come up with their own initiatives.
Building up the smartness of the buildings, communities, districts, and business parks, will form a foundation of data and communication – which again enables the overall smartness.
With the ground-up approach we can build a network of communities, which can easily grow and are easier to scale. If you build it from the ground up, the ability to scale is already built in. We need to build a protocol and to have a unified platform that allows the exchange of data and information between the different communities and districts.
Ricky: What are the challenges that you see in the process of becoming a Smart City? How can cities overcome these challenges?
Sau Sheong: The most obvious challenge is that the city is already built up and is already in existence. How do you deploy technology in an existing city? Do you tear up everything? How do you pair up the existing building management systems with sensors and equipment? The costs will be high and can easily skyrocket!
Sometimes, it is easier to give up and do it somewhere else. In Indonesia, the government is ‘giving up’ on Jakarta to move to somewhere else. This is quite common as it is too complicated to start fixing the existing foundations compared to building something totally new.
If you wish to make an existing city smart, you need to look at the technology that will integrate. I’m an advocate of the ground-up approach. You can have a common approach, apply customisation, and don’t need to destroy what already exists.
You can take a greenfield or brownfield approach. We have already discussed the greenfield approach taking place in the Tengah smart town. For brownfield, we are doing it in the Tampines town by building smart meters and transforming an old town into an “Eco Town”.
The second challenge is politics. As politics waiver and political parties changed, they might oppose to the earlier ones and move away from previous initiatives. This is a big risk for long-term developments. All the projects that are discussed by a previous government can be thrown away.
The third challenge is “good old” economics. Why do we build a smart city? What value does it bring to me? Does it make financial sense? As an organisation and as the politician, there must be a benefit for everyone. Tragedy of the commons can easily happen where everyone wants something, but nobody wants to pay.
Niklas: What advice do you have for business and government leaders who are working on developing smart cities?
Sau Sheong: Whoever is building the city needs to consider, what is the value that they bring to the individuals living there. Is a smart city the best thing to do for the country? Those things need to be considered and clearly addressed.
Try to do it from the ground up. Aim to have a couple of benefits to start with. You can thrive on a smaller scale. The effort needed to build a smart city is tremendous. Try different things on a smaller scale and grow one initiative at a time. After that, you can connect the smaller parts together.
I believe a more organic growth, which focuses on gradual growth it the most feasible approach to develop Smart Cities.
Ricky: Sau Sheong, thank you very much for joining us for today’s discussion! Your contribution gives us a good insight on what makes Singapore No. 1 on the Smart City Index list. Looking forward to hearing from you again!
Interested to learn more about SP Digital? You can read Sau Sheong's annual blog here.
Article was previously published on LinkedIn by Ricky Foo on 5 May 2021 Smart Cities Interview Series: Sau Sheong Chang, CEO of SP Digital