Singapore Introduces Bill to Strengthen Power Sector Regulation and Promote Energy Transition

Establishes a $5 billion Future Energy Fund for investments in low-carbon projects. centralizes the purchase of gas to guarantee supply and diversify energy sources.gives EMA the ability to control expenses, gain access to infrastructure, and deal with crises.

In an effort to change the Gas Act, Electricity Act, and EMA Act, the Ministry of Trade and Industry (MTI) presented the Energy Transition Measures and Other Amendments Bill to Parliament. 

These changes will:

• Put limits on the market for power.
• Bolster the regulatory powers of the Energy Market Authority (EMA).
• Create the Fund for Future Energy.

 

About 40% of Singapore’s carbon emissions come from the country’s electricity generation, which is mostly based on natural gas. In order to achieve net-zero emissions by 2050, Singapore has to decarbonize its power industry while preserving cost competitiveness and energy security. To accommodate different decarbonization approaches, this necessitates modifying regulatory structures.

After public and business stakeholder engagements, the Bill contains a number of crucial recommendations:

Future Energy Fund:

• Announced at Budget 2024, this $5 billion fund will support investments in low-carbon energy sources.

Centralized Gas Procurement: 

To centralize procurement for power producing businesses and aggregate demand, a Central Gas Entity (CGE) is established.

This is an attempt to ensure adequate gas supply and diversify energy sources.

Cost Recovery for Energy Initiatives:

• EMA can recover costs for initiatives related to energy security, market development, and decarbonization from benefiting entities.
• Shared Access to Critical Infrastructure:
  • EMA can direct owners of critical energy infrastructure to allow access for other licensees, ensuring energy security and reliability.
• Approval for Repurposing Key Assets:
  • Owners must seek EMA’s approval before repurposing critical electricity and gas assets to safeguard energy security.

Power Rationing During Emergencies:

• EMA gains the authority to implement power rationing to maintain system stability during supply disruptions, similar to measures in France and Germany.

These actions are intended to aid Singapore’s energy transition and guarantee a competitive, safe, and sustainable energy supply in the future.