Lower Reliance on Liquified Natural Gas to Hedge against Rising Electricity Prices and Pilot Trial to Import Electricity from Malaysia

Ms Ng Ling Ling asked the Minister for Trade and Industry whether Singapore is on track with national plans to rebalance by lowering the reliance on liquified natural gas with other energy sources in order to hedge against rising electricity prices.

Ms Ng Ling Ling asked the Minister for Trade and Industry whether he can provide an update on the pilot trial to import electricity from Malaysia.

Under the Energy Reset pillar of the Singapore Green Plan 2030, Singapore will decarbonise our power sector by tapping on solar power, low-carbon electricity from the region and emerging low-carbon alternatives such as hydrogen and geothermal energy.

Solar is currently the only viable renewable energy for large-scale deployment in Singapore. The Energy Market Authority (EMA) is on track to achieve its solar target of at least two gigawatt-peak (GWp) by 2030, and accelerated target of 1.5 GWp by 2025. It will continue to maximise solar deployment, including on rooftops and reservoirs. Nevertheless, given our land and geographic constraints, solar deployment will still only serve around 3% of Singapore’s energy demand in 2030 even as we seek to maximise deployment.

Imported electricity is more scalable as we sit in a region with strong potential for renewable energy. We are working with our regional partners to develop regional power grids and tap on them for electricity imports. In October 2021, EMA announced plans to import up to four gigawatts (GW) of low-carbon electricity, or around 30% of our electricity supply, by 2035. EMA issued the first Request for Proposal in November 2021, for the import of up to 1.2GW of electricity by 2027.

EMA has also been working with various partners on trials to import electricity1, so as to refine the technical and regulatory frameworks for large-scale electricity imports into Singapore. This includes the two-year trial to import 100 megawatts (MW) of electricity from Malaysia via the existing interconnector between Singapore and Peninsular Malaysia. In October 2021, EMA appointed YTL PowerSeraya (YTLPS). YTLPS is in the process of securing approvals from the relevant authorities and entering into connection agreements with off-takers, and is on track to commencing the trial this year.

Over a longer time frame, there are emerging technologies to provide low-carbon electricity, including hydrogen and carbon capture, utilisation and storage. Under the Low-Carbon Energy Research Funding Initiative, the Ministry of Trade and Industry (MTI) had awarded $55 million to support the development of such solutions. MTI also entered into several partnerships with countries such as Australia, Chile, the Kingdom of Saudi Arabia, New Zealand, and the US, to collaborate on low-carbon solutions including hydrogen. EMA will continue working with industry partners to explore other forms of renewable energy which are not yet viable in Singapore, including geothermal energy.

Over the past few months, a confluence of recovering economic activity, severe weather events, and a series of gas production outages have sent global energy prices significantly higher. These have raised electricity prices in many countries. As around 95% of Singapore’s electricity is generated using natural gas, we were also susceptible to the increase in global gas prices. EMA has also put in place various measures to safeguard our energy security and resilience.

While the development of the alternative energy sources will enable us to reduce reliance on natural gas in the long-run, Singapore will still have to import most of our energy supply, in one form or another. We therefore cannot be fully insulated from the volatility in the global energy market regardless of the type of energy we import. Our pace of transition to cleaner energy sources will ultimately depend on when emerging alternative technologies become economically viable.

MTI and EMA will continue to develop alternative energy solutions to decarbonise and diversify our energy sources. Singaporeans are also encouraged to conserve energy as a way of life.