Measures to Mitigate High Electricity Prices Arising from Singapore's Ongoing Decarbonisation Efforts

Mr Edward Chia Bing Hui asked the Deputy Prime Minister and Minister for Trade and Industry (a) whether decarbonisation efforts during Singapore's energy transition are expected to lead to higher electricity prices before system-wide savings and environmental benefits are realised; and (b) if so, what measures will the Government take to mitigate the impact of such cost increases on households and businesses.

As we decarbonise, the share of low-carbon energy sources in our energy mix will grow. The impact on electricity prices depends on which low-carbon energy sources we introduce into our energy mix, as well as when we do so. Some sources may be expensive now, but their costs could fall over time with further research and development as well as scale. The impact on electricity prices is therefore unknown at this juncture. However, we expect electricity tariffs to rise by around 1% for every $5/tCO2e increase in the carbon tax level.

The Government will continue to safeguard our energy security and keep costs affordable as we decarbonise. In particular, lower- to middle-income HDB households will continue to receive support with their utility bills through U-Save rebates. We will also continue helping our businesses improve their energy efficiency, which will in turn lower their energy costs.