Singapore seeks views on proposed changes to energy laws, such as centralised gas procurement

Centralised gas procurement for the power sector and power rationing in emergencies are among proposed changes to the laws for which the government is seeking feedback.

Launched on Wednesday (May 8), the public consultation will seek feedback on amendments to the Energy Market Authority (EMA) Act, Electricity Act and Gas Act. It will end on Jun 5, 2024.

The Ministry of Trade and Industry (MTI) and EMA said jointly that Singapore’s energy landscape will “change significantly”, including in planning for infrastructure development and how energy markets are regulated.

“We will therefore need to update our regulatory regime to support decarbonisation, ensure energy security, and keep our power sector cost competitive.”

Centralised gas procurement

The first proposal includes the establishment of a regulatory regime for centralised gas procurement, which is seen to allow Singapore to benefit from demand aggregation, diversify its energy sources and ensure there is sufficient gas to meet its power needs.

To implement this proposal, the government intends to introduce the requirement for power generation companies to procure gas solely from a central gas entity (GCE), with existing gas supply contracts to be exempted.

This will be made under the Electricity Act, under which the government also aims to empower EMA to introduce gas procurement terms on generation companies, such as minimum gas contracting obligations.

Singapore is also looking to amend the Gas Act to “empower EMA to regulate the GCE” by adding such centralised procurement and supply of gas to the power sector as a licensable activity by EMA, while also allowing EMA to regulate the GCE on matters such as sources and tenures for upstream gas contracts.

Cost recovery

MTI and EMA further intend to amend the Electricity Act and Gas Act to allow EMA to recover costs for initiatives in strengthening energy security, developing a competitive market, and supporting the decarbonisation of the power sector.

“Any costs recovered will have to be approved by the minister, and will be collected from licensees or from consumers who benefit from these initiatives. We will exercise these powers only when necessary and with due care, to ensure that overall electricity costs are kept in check,” said both parties.

Shared access to infrastructure 

Citing Singapore’s limited land size, the government foresees instances where electricity or gas licensees may need access to critical infrastructure owned by others. The government therefore intends to amend the Electricity Act and Gas Act to allow EMA to direct owners of critical infrastructure to enter into an agreement for licensees to gain such access, with “reasonable compensation provided of the owner”.

Should both parties fail to reach an agreement, either may request for the minister to establish an appeal panel to “determine the reasonable terms for the agreement” – though this would only be in the instance if EMA considers access necessary in the public interest to ensure energy security and reliability.

Approval for infrastructure repurposing

MTI and EMA 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 for other uses. This is to facilitate EMA’s system planning and safeguard Singapore’s energy security, they said.

Power rationing during emergencies

While Singapore avoided supply disruptions during the 2021 and 2022 global energy crisis, MTI and EMA highlighted the importance of preparing for future emergencies, “no matter how unlikely they might be”.

They therefore intend to amend the Electricity Act to equip EMA with powers to direct both licensees and consumers to ration power for extended periods to maintain 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. Similar regimes are in place in other countries, such as France and Germany,” added MTI and EMA.

Members of the public are invited to submit their feedback via e-mail to [email protected], or send mail directly to MTI with the subject Energy Legislation Consultation, by Jun 5. 

To maintain confidentiality of feedback contributors, the government said it will anonymise and aggregate the results of this public engagement. 

Source: Business Times © SPH Media Limited. Permission required for reproduction.

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