Impact of Collapse of Sun Cable Project on Singapore's Renewable Energy Targets

Miss Cheryl Chan Wei Ling asked the Minister for Trade and Industry with the current state of the Sun Cable project (a) what are the implications to Singapore’s ambition to import low carbon electricity; (b) whether Singapore has made actual financial investment into the project; and (c) what considerations are in place to assess the commercial risk and project execution of such future projects.

Mr Edward Chia Bing Hui asked the Minister for Trade and Industry (a) what are the implications of the collapse of the Sun Cable project on Singapore's renewable energy targets; (b) whether the Ministry has studied the reasons for the collapse; and (c) if so, whether similar risks apply to other regional renewable energy grid projects that Singapore has committed to.

My response will also address the Parliamentary Question filed by Ms He Ting Ru due for a later Sitting on the same topic.

Singapore currently relies on natural gas, the cleanest source of fossil fuel, for almost all our power generation. To decarbonise our power sector, we are tapping on three sources of clean energy. First, we are accelerating the deployment of solar energy, which is the most viable renewable energy source in Singapore. Second, we are working with our regional partners to develop regional power grids and import up to four gigawatts (GW) of low-carbon electricity by 2035. Last but not least, we are exploring new alternative sources of energy such as hydrogen and geothermal energy. We published our National Hydrogen Strategy in October last year and have launched an Expression of Interest (EOI) exercise for an ammonia power generation project to be operational from 2027.

There are abundant renewable energy resources in the region and beyond, and considerable interest from companies to bring electricity into Singapore. The Energy Market Authority (EMA) has received more than 20 proposals for its ongoing Requests for Proposals exercise. Sun Cable’s proposal is one of them. As part of the tender process, EMA has been clarifying our technical requirements with Sun Cable. However, Singapore has not made any commitment, financial or otherwise, into the Sun Cable project. Singapore therefore bears no financial impact from the recent actions taken by Sun Cable to enter into voluntary administration.

EMA remains on track to import up to four GW by 2035. Discussions with companies on the projects are in progress. We also welcome Sun Cable to resume discussions when it is ready to do so.

Strong international collaborations are also necessary to facilitate commercial electricity trading projects and the development of regional power grids to support both Singapore’s and regional decarbonisation, and enhance our collective energy security and resilience.

To this end, Singapore has signed Memoranda of Understanding with Brunei, Cambodia, Indonesia, Lao PDR and Vietnam in the past year, to strengthen our energy collaborations, and develop regional power grids and cross-border electricity trading. We are also working with the US Department of Energy on the Feasibility Study on Regional Energy Connectivity in Southeast Asia, with the aim of enhancing energy connectivity in the region so as to improve energy security and strengthen grid resilience.

We have also embarked on small-scale projects such as the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, under which we are importing up to 100 megawatts (MW) of hydropower from Lao PDR. On 30 January 2023, YTL PowerSeraya and TNB Genco exchanged a Cross-Border Purchase Agreement to import 100 MW of electricity from Malaysia as part of a two-year trial. We look forward to the implementation of this project and further small-scale import projects which serve as important pathfinders for scaling up electricity trading.