Singapore government to build power generation capacity if tenders draw insufficient interest

SINGAPORE will call competitive tenders for new power generation capacity – and if these do not attract enough interest from private generation companies, the government will build the required new capacity itself.

This is to ensure that there is sufficient power generation capacity to serve demand, said Second Minister for Trade and Industry Tan See Leng during the ministry’s Committee of Supply debate on Tuesday (Feb 28).

This is one of several moves to strengthen the foundations of Singapore’s energy market, following lessons from the global energy crisis, said Dr Tan, who is also Manpower Minister.

In 2021, the Energy Market Authority (EMA) established a standby fuel facility for power generation companies to draw upon amid the global fuel crunch. This will now be a permanent feature.

The government is also exploring ways to centrally aggregate gas procurement and obtain more secure and longer-term contracts, Dr Tan added. Some 95 per cent of Singapore’s energy mix comes from imported natural gas.

Finally, EMA is looking to enhance regulatory requirements on electricity retailers, to strengthen both consumer protection and retailers’ abilities to withstand market volatility. Earlier this month, EMA launched its public consultation to seek feedback on the proposals.

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The Singapore wholesale electricity market has experienced high prices and fluctuations, causing several independent retailers to exit the market since 2021, while others have terminated their customers’ agreements earlier than expected.

Besides strengthening the local energy market structure, Singapore is developing new energy supply sources to diversify and decarbonise its energy supply, as well as tapping on international collaborations, said Dr Tan.

He cited the Laos-Thailand-Malaysia-Singapore Power Integration Project, which started in June last year and sees Singapore import renewable hydropower from Laos. This will “help us learn, build confidence, and pave the way for our larger scale electricity import projects”, he said.