Singapore starts consultation to amend acts related to energy, electricity, gas

Singapore's Ministry of Trade and Industry and the Energy Market Authority are seeking public consultation on proposed amendments to the Energy Market Authority of Singapore, or EMA, Act, Electricity Act and Gas Act, to support the city-state's decarbonization goals while also keeping the domestic power sector cost-competitive, the EMA said on its website May 8.

Power generation -- primarily fueled by natural gas -- accounts for about 40% of Singapore's carbon emissions today, the EMA said. Developing various decarbonization pathways, such as electricity imports and hydrogen, entails significant investments, necessitating changes to regulatory requirements and planning for appropriate infrastructure development, it added.

The public consultation, which started May 8 and ends June 5, includes five proposals -- establishing a regulatory regime for centralized gas procurement; allowing the EMA to recover costs for energy security, market development and decarbonization services; facilitating shared access to critical energy infrastructure; requiring approval obligations for repurposing critical energy infrastructure; and empowering the EMA to implement power rationing in times of emergency.

In October 2023, the MTI and EMA announced their intention to establish the Central Gas Entity, or CGE, to aggregate the demand for gas from power generation companies and centralize gas procurement for the power sector.

"To implement this proposal, we intend to amend the Electricity Act to introduce the requirement for power generation companies to procure gas solely from the CGE, with existing gas supply contracts to be exempted from this requirement, up till the contract expiry date; and empower EMA to introduce gas procurement terms on generation companies, such as minimum gas contracting obligations to ensure they contract sufficient fuel," they said.

"In addition, we intend to amend the Gas Act to empower the EMA to regulate the CGE, by adding the centralized procurement and supply of gas to the power sector by the CGE as a licensable activity by the EMA and allowing the EMA to regulate the CGE on matters such as sources and tenures for upstream gas contracts," they added.

The second proposal envisages a plan to amend the Electricity Act and Gas Act so that the EMA can recover the costs of its initiatives to support the energy transition.

These pertain to expenses related to strengthening energy security, developing a competitive market and/or supporting the decarbonization of the power sector. Such costs will have to be approved by the trade and industry minister and will be collected from licensees or the consumers benefiting from such measures, the EMA said.

Critical energy infrastructure, power rationing

The EMA also aims to facilitate shared access to critical energy infrastructure. For instance, electricity importers may want to access electricity distribution infrastructure owned by other licensees to import electricity from other countries, it said.

"Therefore, we intend to amend the Electricity Act and Gas Act to allow the EMA to direct owners of critical energy infrastructure to enter into an agreement for licensees to gain access to the critical energy infrastructure, with reasonable compensation provided for the owner," the EMA said, adding that if both parties fail to reach an agreement, an appeal panel for resolution may be established through the minister.

Meanwhile, owners of existing critical energy infrastructure might intend to repurpose such infrastructure for other uses.

"To facilitate EMA's system planning and safeguard our energy security, we intend to amend the Electricity Act and Gas Act to require owners of critical energy infrastructure to seek EMA's approval before repurposing such infrastructure," it said.

The EMA also stated its intention to amend the Electricity Act, allowing it to direct licensees and consumers to ration power for extended periods during emergencies to ensure the overall stability of the power system.

"These powers will be exercised as a last resort under extreme situations, and the duration of power rationing will not be longer than necessary," it added.