KEPPEL Corp : BN4 0% has inked a pact with Cambodia’s Royal Group Power for the long-term import and sale of one gigawatt (GW) of low-carbon electricity, in a move that marks Singapore’s largest cross-border electricity contract and progress in the city-state’s decarbonisation goals for the power sector.

This development also makes Keppel the first to clinch conditional approval from Singapore’s Energy Market Authority (EMA) in its search for parties to import and sell up to 4 GW of low-carbon electricity by 2035, said EMA in a statement on Thursday (Mar 16).

The conditional go-ahead was awarded to Keppel Energy, wholly owned by Keppel Infrastructure, which counts Keppel as parent company.

Keppel Energy’s proposal to import electricity includes harnessing solar energy, hydropower and, potentially, wind power, supported by battery-energy storage systems or pumped storage hydropower, said EMA.

In a statement, Keppel said the low-carbon electricity will be generated and supplied from an integrated energy system of more than 4 GW of installed capacity, comprising largely solar power, complemented by those other sources.

The power will be transmitted from Cambodia to Singapore through onshore overhead high-voltage transmission lines, and new subsea cables more than 1,000 km in length.

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Subject to requisite regulatory and other approvals, this import of electricity from Cambodia is expected to start after 2030, said Keppel.

In the power purchase and export agreement (PPEA) signed by Keppel Energy and Cambodia’s Royal Group Power on Wednesday, the Cambodian side will do the supply and export, and Keppel, the import of utility-scale, low-carbon electricity into Singapore.

The PPEA creates many “firsts” to guide the way for cross-border electricity trading in the region, similar to how it has been done in Europe for decades, noted Second Minister for Trade and Industry Tan See Leng, who was at the signing ceremony.

The subsea cables will be the longest cross-border subsea interconnector in South-east Asia. They will be even longer than the Viking Link Interconnector Project between Denmark and the UK – thus far the longest subsea cable, and which is expected to be completed by year’s end, Dr Tan added.

This latest development follows a binding and exclusive collaboration pact signed between both firms last October.

Keppel, not new to the game, has said it will leverage its experience in the first multilateral cross-border trade in renewable electricity involving Laos, Thailand, Malaysia and Singapore. In trade that commenced last June, up to 100 megawatts (MW) of electricity is being traded from Laos to Singapore via Thailand and Malaysia using existing interconnections for a two-year period.

Keppel Energy will also look into scaling and hybridising imported electricity with renewable energy sources in Laos. 

Keppel said the conditional approval from EMA will be converted into an electricity import licence once financial close is achieved.

EMA’s conditional nod indicates that the project has been preliminarily assessed as technically and commercially viable. It also enables the participants (in this instance, Keppel Energy) to conduct further studies and secure regulatory approvals from the source and transit countries.

EMA’s request-for-proposal for potential electricity importers, which closes at the end of the year, has so far drawn more than 20 proposals from six countries, with a combined import capacity of more than 10 gigawatts (GW), said EMA’s energy connections office director Lee Seng Wai.

Companies from Australia, Cambodia, Indonesia, Laos, Malaysia and Thailand have so far expressed interest to be importers; their proposals offer renewable sources of power from solar and wind to hydro and geothermal power.