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EMA can now own, operate power infrastructure

EMA can now own, operate power infrastructure

Source: Straits Times
Article Date: 03 Nov 2021
Author: Adeline Tan & Cheryl Tan

The move is intended to safeguard Singapore's energy security and reliability.

As Singapore heads towards a future with cleaner electricity, it is equipping the industry regulator with teeth to ensure there is no energy crunch.

This means the Energy Market Authority (EMA) can now acquire, build, own and operate power infrastructure, after the law was amended in Parliament yesterday.

That is because the shift to more efficient power plants, low-carbon alternatives and renewable energy sources presents many uncertainties, said Second Minister for Trade and Industry Tan See Leng.

In such an environment, power generation companies may hesitate to invest, while banks may be reluctant to finance certain types of power generation projects, he said.

"We should not underestimate how challenging this journey will be," Dr Tan told the House. "Some countries are experiencing an energy crunch because they have not provided sufficient safeguards and contingencies for their transition."

The amendments will empower the Government to secure the country's electricity supply by acquiring critical power infrastructure.

Several MPs asked if there would still be a level playing field between private companies and the EMA.

Mr Melvin Yong (Radin Mas) raised the issue of whether EMA, as both regulator and owner of power generation companies, would be able to compete in the wholesale electricity market and possibly dictate energy prices.

Dr Tan said EMA will ensure its infrastructure is subjected to the same tough standards as its private counterparts.

He said: "EMA will put in place governance structures and, if necessary, separate subsidiaries to mitigate conflicts of interest and ensure accountability.

"Nevertheless, I would like to reiterate that our preference has been and continues to be for the private sector to provide and operate the critical infrastructure.

"We remain committed to facilitating private sector investments in the energy sector."

Amendments to the Electricity Act and the Gas Act also mean it is now an offence to damage protective infrastructure housing transmission electricity cables that are 66 kilovolts and above. Previously, the law covered damage to only actual cables and pipelines.

Dr Tan said: "These are high-voltage transmission cables that serve more customers. Damage to these cables will thus have a greater impact on our electricity supply to the consumers and businesses."

Mr Louis Ng (Nee Soon GRC) asked about the Government's plans to deal with cyber attacks on Singapore's energy and water infrastructure.

Dr Tan said there have not been any successful cyber attacks on Singapore's critical energy installations. Still, owners of critical information infrastructure in the industry have to meet minimum baseline cyber requirements, he added.

EMA's regulatory functions have also been expanded so that it can implement policies and strategies to reduce greenhouse gas emissions in the power sector.

This comes as around 95 per cent of Singapore's electricity is generated using natural gas, and the fossil fuel will continue to remain an important source of energy for the next few decades.

The power sector currently accounts for around 40 per cent of Singapore's carbon emissions.

Some MPs raised concerns about electricity costs that may rise amid Singapore's energy transition.

Dr Tan agreed energy costs will rise once the power infrastructure is enhanced. "This is an inevitable and necessary trade-off to address climate change," he said. He added that EMA would continue to work on cost-competitive solutions to meet the country's energy needs and low-emission targets.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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