Temporary State Control of Energy Market to Keep Electricity Prices Stable for Consumers and Businesses

Mr Yip Hon Weng asked the Minister for Trade and Industry in view of the long-term geopolitical events affecting oil prices and the high volatility of energy prices, whether the Government will consider temporarily bringing the energy market under state control to keep electricity prices more stable for consumers and businesses in Singapore.

Mdm Deputy Speaker, the world has been facing an energy crunch since September 2021. Global gas prices have increased significantly, due to high demand and tight gas supply. The global energy markets are expected to remain volatile and elevated with the protracted conflict in Ukraine, and this is also coupled with the seasonal increase in energy demand from countries in Europe and Asia, especially during the coming winter.

With Singapore relying on imported natural gas to generate around 95% of its electricity, our domestic energy prices would not be immune from the volatility in global energy markets. The higher fuel prices globally will result in higher domestic electricity prices. While our electricity prices will have to reflect the higher cost of electricity production, it is vital that the global volatility does not disrupt our electricity supply and impair the functioning of our domestic energy market.

I previously shared with the House measures that MTI and EMA have put in place to secure our electricity supply and ensure the orderly functioning of the wider energy sector. Specifically, EMA established a Standby LNG Facility, called the SLF, and also required generation companies (gencos) to bolster their own stockpile of fuel. Where there are potential shortages in electricity supply, EMA will also direct the gencos to generate. EMA also introduced the Temporary Electricity Contracting Support Scheme (TRECS) to help large consumers secure retail contracts.

These measures have helped to ensure uninterrupted energy supply and stabilised the Uniform Singapore Energy Price (USEP), without the need to bring the electricity market under state control within the short- to medium- term. EMA will continue to monitor the situation closely and we will not hesitate to introduce new measures, if necessary.

Thank you, Mdm Deputy Speaker. I thank the Minister for his reply. As the Minister said, 95% of our energy is from natural gas, which is a single modality. I wish to ask whether the Ministry is considering diversifying our electricity sources to reduce concentration of risks?

I thank the Member for his supplementary question. I think we have also shared many times in public, and also in this House, that we have been actively looking at ways and means to diversify and improve our resilience and preserve our energy security. Other than the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, which is a pilot that we started, also known as the LTMS, EMA has an ongoing Request for Proposal (RFP), to import up to four gigawatts of electricity by 2035. EMA has received various proposals from countries in the region and beyond, demonstrating the abundant renewable energy potential within this region.

We welcome these proposals and we will diversify our supply sources to secure a reliable and sustainable supply for Singapore.

Other than tapping on electricity imports, we will also continue to actively preserve some of our existing energy suppliers and also to diversify our energy sources.

First, our natural gas switch. Natural gas will continue to be a key source of energy supply for Singapore. It is good as a transition fuel and it is the lowest, in terms of carbon emission, of all of the fossilised fuels. So, we will continue to ensure that this supply of natural gas is secure.

Secondly, we are also accelerating solar deployment and we aim to be able to achieve two gigawatts peak of solar energy within our country by 2030.

Third, we are developing low-carbon alternatives, such as hydrogen, and we are also exploring the use of carbon capture utilisation and storage; and at the same time, also exploring Singapore's potential for geothermal energy.

We will continue, on the international front, our exchanges with our regional, as well as global partners to advance our mutual interests – to provide energy cooperation and ensure greater energy resilience.