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The Ministry of Trade and Industry (MTI) of Singapore has released an Energy Transition bill for the first reading of parliament. The bill aims to amend the Energy Market Authority (EMA) Act, Electricity Act, and Gas Act in order to advance sustainability in specific economic sectors.
The bill proposed by MTI establishes frameworks for funding, procurement, and regulation in the green energy, power, and gas sectors. Therefore, it is expected to create a more conducive environment for private and public investment in Singapore’s energy sector.
Let’s explore the Energy Transition bill in detail.
Changes proposed by the MTI of Singapore in its energy transition bill
The bill released by MTI aims to amend some of the key acts, including EMA, Electricity, and the Gas Act, with a primary focus on facilitating Singapore’s transition to low-carbon energy sources and achieving a net-zero emissions target in 2050. The specific changes proposed by the bill include:
the introduction of guardrails for the electricity market,
strengthening the EMA’s ability to regulate the power sector,
and establishing the Future Energy Fund for Singapore.
In addition to the above, the bill suggests developing different decarbonization pathways to change the energy landscape, including the way Singapore regulates and develops the energy infrastructure.
Key aspects of the MTI’s energy transition bill
At Budget 2024, the Singapore Government announced the establishment of the Future Energy Fund, with a hefty investment injection of $5 billion to support energy transition. The proposed amendments in the bill for the EMA Act suggest establishing FEF under the EMA.
The bill suggests amending the Electricity Act and the Gas Act to empower EMA to regulate the Central Gas Entity (CGE) and mandate gas procurement for power generation companies from the CGE.
The EMA has the power to recover costs for initiatives related to empowering energy security, developing a competitive market, and decarbonizing the power sector.
The new amendments to the Electricity Act and the Gas Act will allow EMA to direct owners of critical energy infrastructure for allowing access to other licensees to give infrastructure share access to businesses in need.
Owners of existing energy infrastructure who intend to repurpose the infrastructure for other use cases will require EMA’s approval before repurposing such assets. The EMA will consider the needs and circumstances of the owners to decide whether to approve their repurposing.
The amendments in the Electricity Act give EMA the authority to implement power rationing to maintain system stability during supply disruptions to avoid future emergencies.
Government collaboration with industry and investors
The EMA consulted power generation companies and stakeholders on the proposal and considered their opinions while developing the bill. The key measurements mentioned above are huge steps designed to support Singapore's energy transition and ensure a sustainable, secure, and competitive green economy.
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