Power policy

Singapore wants to harness four supply “switches” to decarbonize its power sector - natural gas, solar, regional power grids and emerging low-carbon alternatives, coupled with improving efficiency.

Due to the lack of natural resources, solar is the most viable renewable energy option. Singapore targets deploying at least 2 gigawatts of solar capacity by 2030, with an accelerated target of 1.5 gigawatts by 2025. Much of the development is constrained to rooftops and floating solar as the city state’s lack of land resources (indicated by the high population density) has proved an obstacle for ground-mounted grid-scale development.

The SolarNova program, which aggregates demand and rooftop space across public housing, schools and government buildings, has been the driving force for solar PV adoption. To date, the Energy Development Board and the Housing Development Board issued six SolarNova tenders for 366 megawatts of capacity.

Floating solar is also increasingly becoming an area of focus as the government looks to maximize available space for solar installations. In 2021, Sunseap installed a 5-megawatt offshore floating solar plant in the Straits of Johor; Sembcorp has completed a 60-megawatt floating solar plant on the Tengeh Reservoir. The Public Utilities Board is now looking to study the feasibility of another two floating solar plants with a total of 144 megawatts.

To expand renewable energy options, Singapore is exploring potential power imports from neighboring grids, starting with a proposed 100-megawatt import trial from Malaysia.

Power prices and costs

Singapore’s power market is fully liberalized with a competitive electricity wholesale market and retail market. Singapore’s power prices are currently linked to the price of oil: the city-state is 95% dependent on imported natural gas for generation, most of which is purchased at oil-linked prices. Most of the existing gas supply contracts are set to expire over the next two years which could give rise to an increasing role for liquefied natural gas over pipeline gas as companies may prefer the flexibilities of different LNG contracts over the rigidity of long-term

Power market

Tuas Power Generation, Senoko Energy, YTLPowerSeraya, Keppel Merlimau Cogen, Sembcorp Cogen, PacificLight and Tuaspring account for more than 90% of the generation capacity in Singapore. Half-hourly price-quantity bid offers are submitted to the wholesale market operated by the Energy Market Company – a subsidiary of Singapore Exchange. Prior to the inception of the OEM, only consumers whose monthly consumption exceeded 2MWh (‘contestable’ consumers) were allowed to purchase electricity from licensed private retailers. Those who did not meet this consumption threshold (‘non-contestable’ consumers) had to purchase electricity at the regulated tariff from state-owned utility SP Group. Under the OEM regime, which was rolled-out island wide in May 2019, all consumers, regardless of their monthly consumption, are allowed to purchase electricity from a licensed retailer. The retail market is highly competitive, with 29 licensed firms, out of which 12 are competing in the residential segment.

Doing business and barriers

The government does not provide subsidies for renewable energy, but instead relies on introducing regulatory frameworks to facilitate renewable energy’s access to the power market. Although corporate demand for clean energy is healthy and private project developers can secure private power purchase agreements, space and natural resource constraints remain the biggest barrier for large-scale renewable energy deployment.

EV market

Since 2018, Singapore has imposed a cap on the number of vehicles allowed to be registered. In its 2020 budget, Singapore further announced it will phase out internal combustion engine vehicles by 2040, allowing only hybrids, plug-in hybrids or zero-emission vehicles.

EV policy

The 2021 budget followed up with additional fiscal incentives in the short term such as a rebate against the additional registration fee (ARF) and the removal of the minimum ARF for battery electric vehicles. The government also increased the taxes on petrol to discourage the use of petrol and diesel cars which can help to accelerate the adoption of electric vehicles (EV).

The government is also ramping up efforts on public electric vehicle charging infrastructure, increasing its target to 60,000 connectors at public carparks and private premises by 2030. The government has allocated S$30 million ($22 million) over the next five years to promote public-private partnerships that will support the roll-out of EV chargers across the island. A shortage of public chargers can be a big hurdle to rapid adoption of EVs in Singapore where 95% of households live in high-rise apartments.

Buildings market

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.

Buildings policy

Under the country’s long-term low emission strategy, Singapore aims to green 80% of its buildings (by gross floor area) by 2030. There are several schemes to drive sustainability in the construction sector and buildings. Both existing and new buildings in Singapore are subjected to minimum environmental sustainability standards, locally known as Green Mark standard. There are seven compliance requirements including energy consumption, air-conditioning system minimum operating efficiency, energy improvement on lighting systems and water consumption monitoring.

Singapore also developed a Super Low Energy buildings program to encourage the deployment of energy efficiency and renewable energy solutions and development of ‘Zero Energy’ (that are self-sufficient in terms of power generation) or ‘Positive Energy’ buildings (that produce excess power).

Singapore offers various grants to support companies in different sectors to be more energy efficient. One example is the Energy Efficiency Fund which supports the efforts of businesses with industrial facilities to improve energy efficiency, with up to 50% of the investment amount going to equipment or technologies.