Debated in Parliament on 18 Sep 2023.
Mr Sharael Taha asked the Minister for Trade and Industry with increasing electricity demand from new investments in energy-intensive sectors and the retiring of older power generation plants (a) what is the plan to ensure grid reliability and to generate above the required reserve margin of 27%; (b) whether older power generation plants will be considered for continual operation if the newer plants are not ready; and (c) whether such consideration will put our transition to low- or zero-carbon power generation plans at risk and its impact to our environment.
The reserve margin, which provides for planned and unplanned outages of generating units to safeguard the reliability of our power system, is currently in excess of 30% today, which is above the 27% required reserve margin (RRM). While we expect the reserve margin to decrease over the next few years due to increasing demand, there will be sufficient generation capacity to meet the RRM of 27%.
To ensure sufficient generation capacity, the Energy Market Authority (EMA) has introduced a new Centralised Process to launch a Request for Proposal when additional generation capacity is needed in our power system. Only companies awarded a licence under this process may plant new generation capacity. EMA launched the first RFP in July 2023 for new generation capacity needed in 2028. This process strikes a balance between ensuring sufficient capacity for grid security and reliability while minimising the risk of overcapacity. EMA has also been working with Singapore Power to upgrade our grid. These upgrades are planned in tandem with EMA’s Centralised Process.
To mitigate potential delays to new generation capacity coming online, EMA is working with the generation companies on measures, such as the installation of temporary generation units and reviewing the retirement plans of the older generation plants.
We are also continuing with our plans to decarbonise the power sector by 2050, by maximising solar deployment, importing low-carbon electricity and exploring low-carbon alternatives, such as hydrogen. To improve plant efficiency, EMA will also be introducing emission standards by end-2023.
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