Government Initiatives Respond to Rising Global Gas Prices and Supply Risks
SINGAPORE: The Energy Market Authority (EMA) announced on Thursday (Mar 30) that measures designed to enhance Singapore’s energy security will be extended until the end of June. This decision comes in response to the ongoing global energy crisis and the conflict in Ukraine.
The EMA highlighted that global gas prices have surged due to high demand and limited supply, with the situation further complicated by the Ukraine conflict, which poses additional risks to gas and oil supplies. Since approximately 95% of Singapore’s electricity is generated from imported natural gas, consumers will inevitably face the impact of global price fluctuations and rising energy costs.
“EMA will monitor the situation closely and may consider further extending these measures depending on the global energy landscape and its effects on Singapore,” the agency stated.
Originally implemented in October last year, these measures include the establishment of a standby liquefied natural gas (LNG) facility. This facility allows generation companies (gencos) to generate electricity in the event of disruptions to their natural gas supplies. Additionally, gencos are required to maintain sufficient fuel reserves based on their available generation capacity, augmenting the existing fuel reserve requirements outlined in their licenses.
The EMA has also modified regulations to enable gencos to proactively utilize gas from the standby LNG facility if potential energy supply shortages are detected in the Singapore Wholesale Electricity Market, thereby ensuring power system security and reliability.
These actions have contributed to maintaining an adequate supply of fuel and electricity, with the EMA reporting that such measures have stabilized the Uniform Singapore Energy Price to around the cost of electricity production—averaging S$350 per megawatt-hour (MWh) in the first quarter of this year, compared to an average of S$460 per MWh in the fourth quarter of 2021.
The Temporary Electricity Contracting Support Scheme (TRECS), which allows gencos to utilize EMA’s standby fuel facility for electricity generation, will also be extended until the end of June. This program has assisted large consumers, including businesses with an average monthly consumption of at least 4 MWh, in securing fixed-price plans and retail contracts with substantial fixed price components.
So far, participating gencos and retailers have successfully met demand under TRECS on a voluntary basis. The EMA has collaborated with Sembcorp Power and Keppel Electric to offer long-term fixed price plans for business consumers with average monthly consumption ranging from 4 MWh to 50 MWh. These plans vary from six months to three years, with fixed electricity rates for two- and three-year plans set at 25 cents per kWh, excluding additional charges such as transmission and market fees.
To provide greater price certainty, eligible consumers are encouraged to consider these fixed-price plans. The authorities acknowledge the financial pressures faced by households and businesses. The Household Support Package introduced in Budget 2022 aims to assist eligible households with the rising costs of electricity, while businesses seeking financial support can access loan programs provided by Enterprise Singapore.
The EMA also urges consumers to contribute to energy conservation efforts and highlights the National Environment Agency’s (NEA) Energy Efficiency Fund, which assists eligible firms in adopting energy-efficient technologies. Additionally, residents living in one-room to three-room Housing Board flats can receive e-vouchers under the Climate Friendly Households Programme by the NEA and PUB to help offset the cost of purchasing water-efficient and energy-efficient household products.
