POWER rationing in emergencies, centralised gas procurement and other previously announced measures to strengthen Singapore’s energy security have been proposed under a new Bill.
The Energy Transition Measures and Other Amendments Bill was introduced in Parliament for its first reading on Tuesday (Aug 6), following a public consultation in May.
Under the Bill, Singapore’s energy regulator will gain the power to direct licensees and consumers to ration power in emergencies where electricity supply is disrupted.
The Energy Market Authority (EMA) will “implement power rationing as a last resort and lift measures expeditiously”, it said in a joint press statement with the Ministry of Trade and Industry (MTI).
While Singapore avoided disruptions during the global energy crisis in 2021 and 2022, “we must prepare for future emergencies, no matter how unlikely they might be”, said EMA and MTI.
The Bill also has five other proposals that will strengthen EMA’s ability to regulate the power sector, introduce new guardrails, and establish a fund announced in Budget 2024 to support Singapore’s energy transition.
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Centralised gas procurement
The Bill proposes setting up a regulatory regime for centralised gas procurement. In October 2023, MTI and EMA announced that they would set up a Central Gas Entity (CGE) to aggregate the demand for gas from power generation companies.
“This will allow us to benefit from demand aggregation, diversify our energy sources, and ensure that there is sufficient gas to meet our power needs,” they said in Tuesday’s press statement.
The Electricity Act and Gas Act will be amended to require power generation companies to procure gas solely from the CGE, and to empower EMA to regulate the CGE.
Cost recovery
Another proposal allows EMA to recover costs for initiatives that strengthen energy security, develop a competitive market or decarbonise the power sector. The cost recovery will be from entities and persons who benefit from the initiatives.
“EMA will exercise these powers for cost recovery only when necessary and with due care, to ensure that energy costs are kept in check,” said EMA and MTI.
They added: “EMA will ensure stakeholders are consulted and given adequate notice prior to introducing new initiatives and associated costs, which will be transparently communicated.”
Shared access to critical infrastructure
There may be instances where electricity or gas licensees need to access critical energy infrastructure owned by other persons, due to Singapore’s limited size, EMA and MTI noted.
Under the proposed amendments, EMA will be able to direct owners of such infrastructure to enter into an agreement allowing licensees to gain the required access.
“EMA will only issue such directions if access is necessary and in the public interest to ensure energy security and reliability,” the regulator and MTI said.
Approval for repurposing assets
Owners of key electricity and gas assets will also have to seek EMA’s approval before repurposing such infrastructure, under the Bill.
“When assessing requests, EMA will consider owners’ needs and circumstances, while ensuring that overall energy security and system reliability is not compromised,” EMA and MTI said.
They noted that with the energy transition and the limited availability of land earmarked for public utilities, owners of existing energy infrastructure might seek to repurpose such assets.
Future Energy Fund
The Bill will enable the Future Energy Fund, announced during Budget 2024, to be set up under EMA. It will have an initial injection of S$5 billion and support Singapore’s adoption of low-carbon energy sources.
Such energy sources “will likely involve nascent technologies, higher capital expenditures, and exposure to significant commercial and geopolitical risks”, said EMA and MTI.
“The government will ensure prudent use of funds and oversight over projects,” they added.
