Electricity demand expected to rebound as economy recovers from COVID-19 fallout: MTI

SINGAPORE: Electricity demand is expected to rebound as Singapore’s economy recovers from the impact of the COVID-19 pandemic, and the Government is working to diversify energy supplies, said Second Minister for Trade and Industry Tan See Leng on Tuesday (Jan 5).  

Responding to several parliamentary questions, Dr Tan said electricity demand is expected to have declined by about 2 per cent to 4 per cent in 2020 amid COVID-19.  

“However, electricity demand will rebound as the economy recovers and grows, and this is also driven by new users such as data centres, 5G telecommunication networks, the agri-tech facilities as well as electric vehicles,” he added. 

Singapore will harness “four switches” to diversify its energy supply - natural gas, solar energy, regional power grids and emerging low-carbon alternatives like hydrogen, said Dr Tan. 

Natural gas currently accounts for 95 per cent of the electricity produced in Singapore, as the country has progressively transitioned from oil-powered power plants since the early 2000s to adopt natural gas, he added. 

Solar energy is the “most viable” renewable energy source in Singapore, and installed solar capacity increased by more than 100 times in the past 10 years, Dr Tan said, reiterating Singapore’s target for solar energy to supply 3 per cent of its total electricity consumption by 2030. 

READ: Singapore sets solar energy target for 2030 that would provide enough power for 350,000 homes

“Depending on the state of technology at that point in time and cost, we hope to be able to do more,” he said, adding that local companies also partner the Government in the deployment of solar photovoltaic systems. For example, Sunseap Group participates in the SolarNova programme, which encourages government agencies to deploy solar power in its buildings and spaces. 

Dr Tan also reiterated Minister for Trade and Industry Chan Chun Sing’s announcement in October that Singapore will be trialling electricity imports from Peninsular Malaysia, importing 100 megawatts (MW) of electricity for two years.

This will make up about 1.5 per cent of Singapore’s peak electricity demand, so there will be “minimal impact” on the reliability and cost of electricity supply, said Dr Tan. 

“Our preference of course is to import electricity from renewable energy sources. And hence, the cleanliness of the generation source will be a major consideration in selecting the importer,” he added. 

READ: Trial to import electricity from Malaysia a 'useful first step' as Singapore prepares to connect with regional grid: Experts

Discussions on solar farm company Sun Cable’s proposal to supply solar power from Australia’s Northern Territory to Singapore are ongoing, Dr Tan said, but the Energy Market Authority (EMA) cannot share more details due to “commercial sensitivities”.  

The Government is also working with the industry and research communities to study emerging low-carbon technologies such as hydrogen and carbon capture, utilisation and storage, he added. 

The S$50 million Low-Carbon Energy Research Funding Initiative, which was announced in October, will be used to explore the supply, storage and downstream uses of hydrogen, as well as carbon capture and storage for use in building materials or fuels, said Dr Tan. 

READ: Singapore Government sets aside S$49 million for low-carbon energy research

“By tapping on all four switches, Singapore will be able to diversify our energy sources. This will enhance our access to secure and competitively priced energy supplies, and this will reduce our energy security risks,” said Dr Tan. 

“The future energy mix will depend on technological advances in the four switches. This will need to be complemented by efforts to enhance energy efficiency across all sectors and consumers.”  

In a supplementary question, Member of Parliament Saktiandi Supaat asked Dr Tan about the targets for the energy mix of the four switches, noting that Singapore is heavily reliant on natural gas, largely from Malaysia and Indonesia. 

“It’s difficult to give a percentage breakdown. But suffice to say that by 2030, we expect to peak in terms of carbon emission at about 65 million tonnes of carbon dioxide emission. Our target is to halve that by 2050,” said Dr Tan, adding that Singapore aims to achieve net zero carbon emissions by the “latter half of this century”. 

“Depending on the technology development over the next 10, 15 to 20 years, we should see an increased migration towards renewable energy, of which solar is one of them. And depending on the trial import of this 100 MW from Peninsular Malaysia, a higher reliance on drawing from the regional power grid as well.” 

Workers’ Party MP for Sengkang GRC Louis Chua also asked whether the ministry would consider setting a target mix for the amount of energy to be generated from renewable energy sources. 

He also asked about how electricity tariffs would be calculated in the future, when transmission of energy from regional power grids are on the rise, and whether the cost would be passed on to consumers. 

The regional power grids are “still a fairly commercial venture” at this point in time, said Dr Tan in response. 

“The pricing will be competitive, there will be an open transparent bidding process and this electricity will be then sold into the Singapore wholesale electricity market,” he added. 

“When we work out the arithmetic behind it from the import of the 100 MV from the regional power grid itself, the pricing should not be significantly higher than what we are already getting today in terms of the electricity tariffs.”