YTL PowerSeraya wins Singapore's 2-year trial project to import 100 MW of electricity from Malaysia

YTL PowerSeraya has pipped Singapore's big energy players, including Tuas Power and Sunseap Group, to snag Singapore's 2-year trial to import 100 MW of electricity from Malaysia via existing interconnectors.

As the appointed electricity importer, YTL PowerSeraya will work closely with its Malaysian-based parent company YTL Power International to import electricity into Singapore, said the firm in a press statement. To date, YTL PowerSeraya remains the only party in Singapore to have traded across the interconnector, the firm added.

YTL PowerSeraya, one of the leading power generators and electricity retailers in the city-state, is a wholly-owned unit of YTL Power - part of the sprawling empire controlled and led by Malaysian tycoon Francis Yeoh.

The award of the project follows a Request for Proposal process held in March 2021 by the Energy Market Authority (EMA), the regulator for Singapore's energy market.

Describing the project as an "important initiative" in building the Singapore energy story, John Ng, chief executive of YTL PowerSeraya, said: "The appointment marks a significant step towards the success of an ASEAN power grid, where electricity imports may eventually form a key part of Singapore's energy mix."

The project is  expected to commence in early-2022.

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In terms of market share in Singapore's electricity generation sector, YTL PowerSeraya ranked third last year with Tuas Power in pole spot, followed by Senoko Energy, according to the National Electricity Market of Singapore (NEMS) 2020 report.

Sunseap, a major Singapore-based solar firm, said back in March that it tied up with Malaysia's national utility Tenaga Nasional Bhd to trial electricity imports into the city-state from Malaysia.

Earlier this month, Tuas Power's chief operating officer Michael Wong told The Business Times (BT) that the firm also submitted a bid for the trial project and was planning to work with solar power suppliers in Malaysia.

The trial project involving Malaysia is part of Singapore's "third switch" - regional power grids; the others being natural gas, solar and low-carbon alternatives - to tap "clean energy sources" from regional countries, EMA chief executive Ngiam Shih Chun told BT a month ago.

But a surprise announcement last Friday from Malaysia's Energy and Natural Resources ministry that it will allow only non-renewable energy exports to neighbouring Singapore may cloud the prospects of the trial project.

In the statement, Malaysia said its latest move follows a review of the Guide for Cross-Border Electricity Sales and was made to boost the development of the local renewable energy (RE) industry to meet its climate goals and allow the government to allocate additional solar quota to benefit Malaysian RE players, said the ministry.

Back in April, Lee Seng Wai, EMA's policy and planning department director, said the 2-year trial will focus on imported electricity from "preferably low-carbon sources", adding that proposals involving imports from coal-fired sources "will not be accepted".

He added: "EMA will assess the carbon output from the proposals it receives, and cleaner proposals will be scored favourably. Beyond two years, EMA will require the imported electricity to be from zero-carbon generation sources."

The updated guide published on the Energy Commission of Malaysia's website on Monday read: "For the sale of electricity from Malaysia to Singapore, the electricity shall be generated from non-renewable energy sources.

"The transfer of electricity shall not exceed 100MW and be through the existing Interconnection only. No dedicated interconnection is allowed for such purpose."

When queried by BT on the matter, YTL PowerSeraya's Ng replied: "The objective of Singapore's 2-year trial project by EMA is to refine all technical settings and regulatory arrangements under the Electricity Import Framework to facilitate future import of low carbon energy.  In doing so, it also enables Singapore to diversify its energy sources to enhance energy security. We will focus on delivering the objectives during this trial and look forward to the possible import of low carbon energy to Singapore in the longer term."