The Energy Market Authority (EMA) has extended its efforts to strengthen Singapore’s energy security and resilience until 31 March 2023, considering persistent volatility in global energy markets and the situation in Ukraine. EMA will keep an eye on the situation and, depending on the global energy situation and its impact on Singapore may consider extending the restrictions further.
The globe has been experiencing an energy shortage since September 2021. Due to increasing demand and limited supply, global gas prices have risen dramatically. With the continuing crisis in Ukraine and the seasonal increase in energy consumption in the coming winter months, energy markets are projected to remain unpredictable. In preparation for the winter, countries in Asia and Europe have begun to secure fuel supplies, particularly gas.
Because Singapore relies on imported natural gas to generate nearly all its power, global energy market volatility will affect the domestic market. Domestic electricity rates will rise as global fuel prices rise.
While businesses cannot protect consumers from increasing electricity costs, it is critical that global volatility does not interrupt electricity supply or impede energy market functioning.
The EMA’s mission is to maintain a dependable and secure energy supply, promote effective energy market competition, and nurture a vibrant energy industry in Singapore, thus it has implemented several steps to safeguard the country’s energy supply and ensure the smooth operation of the wider energy sector since October 2021:
- Built a standby LNG facility (SLF) that power generation firms (gencos) can use to generate energy if their natural gas supplies are disrupted;
- Instructed gencos to keep enough fuel on hand for power generating, based on their available generation capacity. This is in addition to the existing obligation for gencos to keep fuel reserves as part of their licences;
- Modified Market Rules to allow the EMA to direct gencos to generate electricity using gas from the SLF in advance of potential energy supply shortfalls in the Singapore Wholesale Electricity Market (SWEM) to ensure power system security and reliability.
These steps have helped to secure enough fuel and energy supply while also stabilising the Uniform Singapore Energy Price (USEP) at about the cost of electricity production – $350/MWh for the first five months of 2022.
Through the Temporary Electricity Contracting Support Scheme, the EMA has worked with electricity retailers and generation firms to help large consumers acquire fixed pricing plans and retail contracts with major fixed price components.
Consumers with typical monthly use of 4MWh to 50MWh will continue to be offered longer-term fixed-price plans. The EMA will continue to constantly monitor the situation and, if necessary, take new actions.
Furthermore, starting on 17 June 2022, the contracting window for July 2022 will be open. More information on the various electricity contracting possibilities is available at https://go.gov.sg/electricity-contracting-options.
The government will continue to assist eligible consumers who are facing rising costs. The Household Support Package, which was introduced as part of Budget 2022, will assist eligible households in defraying the costs of higher electricity bills by doubling the amount of their quarterly U-Save vouchers in 2022. Businesses in need of financing can take advantage of Enterprise Singapore’s loan programmes.
The EMA is committed to ensuring that Singapore’s power supply remains secure and reliable, as well as to assisting consumers during this time. It also urged consumers to contribute to energy conservation. Energy-efficient appliances and energy-saving habits can help households reduce their energy consumption.
