The Business Times

No subsidies for renewable energy use

It leads to wasteful over-consumption, says Iswaran

Published Mon, Oct 28, 2013 · 10:00 PM
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[SINGAPORE] The Republic will not subsidise renewable energy options, even as it moves to incorporate solar energy - which seems the most viable alternative here - into the power system, S Iswaran, Minister in the Prime Minister's Office, said at a media briefing yesterday.

Mr Iswaran, who is also Second Minister for Home Affairs, and Trade & Industry, had earlier announced that to further diversify the energy mix here - where currently 85 per cent of electricity is generated using natural gas as a fuel - Singapore is now preparing the system "to effectively incorporate solar energy as it becomes commercially viable".

He said that the Energy Market Authority (EMA) was raising the current cap on intermittent generation sources (including from solar) from the current 350 megawatts (MW) to 600 MW (representing 10 per cent of current electricity peak demand of 6,000 MW) as a first step towards this, adding that the regulator yesterday launched a public consultation on a regulatory framework for such intermittent generation sources.

The increase in the cap to 600 MW as a first step will ensure that there is sufficient electricity reserve needed to back up intermittent sources and ensure system stability, Mr Iswaran explained.

While he did not say so, the introduction of renewables such as solar energy into the system at this stage will not be disruptive, as total power generation capacity here is currently around 10,000 MW, way above peak electricity demand.

Responding to a BT query on whether there are plans to introduce subsidies to spur solar use here, he said that Singapore does not subsidise energy consumption as this leads to "wasteful over-consumption and more importantly, market players will not have a true sense of the cost of energy so their energy use decisions will also be distorted".

There is, however, targeted help here for lower-income households through the use of Utilities-Save vouchers and schemes, he added.

"As for renewables, these should enter the system on a fully costed basis," he said.

However, Mr Iswaran emphasised: "We have been investing through R&D and working with industry to ensure efforts to make renewables more efficient and to converge more quickly with grid-parity."

He was referring to ongoing test-bedding efforts and support for solar research institutes to study technical aspects of bringing solar energy here. Singapore also launched a micro-grid test-bed on Pulau Ubin earlier this month involving solar and biodiesel power to gain a better understanding of how such intermittent generation sources can eventually be applied on the mainland.

"There are also certain positive externalities associated with renewables and the latest EMA consultation will look at these to see how they can be factored in to ensure that the true cost and benefit of renewables are reflected in any system we have going forward," he added.

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