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Singapore was founded as a British port in 1819 by SirThomas Raffles and was occupied by the Japanese during World War II. Singapore was part of the Malaysian Federation for just two years when it declared independence in 1965. Singapore is one of the world's most prosperous nations in per capita terms and has a highly developed economy (see above). Geographically, this multi-cultural city-state is confined by its small land area with just 682km2 of territory, however its strategic location has aided its export capabilities and has also fostered a multicultural society. The People's Action Party has continually dominated the political scene in Singapore.
ELECTRICITY INDUSTRY OVERVIEW
- Singapore is heavily dependent on fossil fuels for electricity generation.
- Four offshore pipelines supplied by Malaysia and Indonesia satisfy Singapore's natural gas demand and demonstrate the country's reliance on imported fossil fuels to meet domestic energy needs.
- 99.9% of Singapore is serviced by a single grid.
- The inter-agency Energy Policy Group (chaired by the Permanent Secretary of the Ministry of Trade and Industry) has outlined five principles for Singapore's energy sector to:
- promote competition to keep energy affordable;
- diversify energy supplies to guard against supply disruptions, price increases and other threats;
- improve energy efficiency (the Singapore Government has set up the Energy Efficiency Programme Office as part of the "Efficient Singapore Plan");
- invest in the energy industry and in research and development; and
- improve on international cooperative measures.
- Since the late 1990s, Singapore has progressively liberalised its electricity market. The electricity generation and retail components were separated in 2001.
- The Energy Market Authority (EMA) was formed in 2001 to provide a new legal and regulatory framework for the electricity industry. Progression to full retail market liberalisation is currently in progress.
- In 2002, the Energy Market Company (EMC) was established to implement the wholesale market system rules and in 2003 the National Electricity Market of Singapore (NEMS) opened. All of Singapore's electricity is bought and sold through the EMC in the NEMS.
- The NEMS acts as a real-time electricity trading pool where power generation companies compete to sell electricity every half-hour.
- Electricity consumers whose average monthly consumption over a 12 month period is below 10,000kWh fall into the "non-contestable" segment of the Singapore retail electricity market and are supplied with electricity by SP Services (a subsidiary of Singapore Power) at a regulated tariff, which is revised quarterly.
- The regulated electricity tariff for the period 1 April to 30 June 2013 is S$0.267 (approx. US$0.21) per kWh.
- Electricity consumers that fall into the "contestable" segment (i.e. average monthly consumption over a 12 month period above 10,000kWh) can buy electricity directly from electricity retailers (all the generators are also electricity retailers), or buy electricity directly from the NEMS as a market participant.
- Eventually, all retail consumers in Singapore will become contestable when the retail electricity market is fully liberalised.
- The Electricity Management System (EMS) enables operators to monitor and control generation plants and transmission networks in Singapore. The EMS provides system operators with information about generation plants, transmission stations as well as equipment and transmission lines.
Generation, distribution and transmission
- As a general rule, only generation licensees may generate electricity in Singapore. If connected to the grid, generating units must be registered with the EMC.
- Between 2007 and 2008, Temasek Holdings (which is wholly owned by the Ministry of Finance) divested its three wholly owned Singaporean power generation companies, namely PowerSeraya, Senoko Power and Tuas Power.
- Singapore currently has five power generation companies connected to the grid. The following three entities together supply approximately 87% of the country's electricity:
- PowerSeraya, which is wholly owned by Malaysia's YTL Power International;
- Senoko Energy, which is owned by a consortium led by Japan's Marubeni Corporation; and
- Tuas Power, which is wholly owned by China's Huaneng Power International.
- The two smaller generators are Keppel Merlimau Cogen and SembCorp Cogen. It is expected that a sixth generator will supply the retail electricity market when GMR Energy commences operating an 800MW combined cycle plant.
- SP PowerAssets, a subsidiary of Singapore Power (which is wholly owned by Temasek Holdings), is the sole owner and provider of electricity transmission and distribution services in Singapore.
- SP PowerAssets has appointed SP PowerGrid (being a further subsidiary of Singapore Power) to manage the operations of the transmission and distribution networks.
- The Electricity Act 2001 is the chief legislative tool to "create a competitive market framework for the electricity industry, to make provision for the safety, technical and economic regulation of the generation, transmission, supply and use of electricity". Broadly the Act:
- sets out licensing requirements;
- provides the Minister with the power to issue a special administration order (whereby an electricity licensee shall be managed directly or indirectly by the EMA);
- controls electricity licensees and entities with interests in transmission systems;
- establishes the wholesale electricity market; and
- stipulates various offences.
RENEWABLES INDUSTRY OVERVIEW
- The "green focus" of the Government is directed at research and development, environmental technology, green transport, water saving and energy efficiency rather than renewable energy generation.
- Solar PV and biofuels are seen as the best opportunities for Singaporean renewable development. Hydropower and geothermal generation opportunities are limited due to Singapore's confined land mass, while wave, tidal and ocean thermal energy are limited because of Singapore's busy shipping lanes.
- The Inter-Ministerial Committee on Sustainable Development launched the Sustainable Singapore Blueprint, which sets out strategies for sustainable growth. This complements the newly created Energy Efficient Programme Office to encourage an "energy efficient Singapore".
- The Ministry of Environment and Water Resources deals with climate change issues like energy efficiency, whilst the Ministry of Trade and Industry is responsible for drafting and implementing energy market policy.
- Government is expected to focus on solar energy, wind energy, electric mobility, smart grids, biomass, fuel cells, energy efficiency and carbon services.
- By 2015, the Singapore Government expects the clean energy industry to contribute S$1.7 billion (approx. US$1.3 billion) to national GDP.
- Solar energy is regarded as the most feasible source of renewable energy for the city-state of Singapore.
- The National Environment Agency has encouraged renewable development through programs like the Innovation for Environmental Sustainability Fund. The fund allows access to public infrastructure for testing of renewable technologies. For instance, the fund helped install a 14.5kW grid-connected solar system at a school in Singapore.
- The Government has provided initial funding of S$350 million (approx. US$277.6 million) for clean energy programs in Singapore (with an emphasis on solar energy) under the Sustainable Development Blueprint.
- The efficient use of solid waste has the potential for use in large-scale power generation. Wood has been used for biomass generation, however projects are only at mostly at the demonstration level.
- Singapore's incineration plants consume 2.5 million tonnes of biomass and waste per year.
- Singapore's limited land area and low wind speeds of 2-3m/s do not indicate much potential for wind power.
- Nevertheless, Cygnus Power is investigating the low- wind speed potential of Singapore.
- Singapore has 130MW/m2 of heat flow and has three hot springs, which are suitable for geothermal generation.
CURRENT ISSUES IN THE RENEWABLES INDUSTRY
- Singapore relies heavily on natural gas imported from Indonesia and Malaysia. Diversification of supply has become an important issue for Singapore's future energy security
- Issues with air pollution from domestic industry and smoke from neighbouring Indonesia and Malaysia have thrust clean energy issues into the national spotlight.
- The lack of land area and government reluctance to subsidise energy supplies has meant renewable energy options remain relatively expensive and impractical compared to fossil fuels.
- The Energy Conservation Act 2012 introduced minimum energy management standards for large energy users in the industry sector from 1 July 2013. The standards only affect companies that consume more than 15GWh of energy annually. The Act is part of Singapore's plan to achieve its target of 35% improvement in energy intensity by 2030 from 2005 levels.
- Key objectives of the Act include the:
- appointment of energy managers;
- reporting of energy use; and
- submission of energy efficiency improvement plans for large energy users.
- Singapore is a hub for multinational corporations.
- There are few restrictions on foreign investment.
- Those industries that are restricted include media, broadcasting, legal, property ownership and retail banking.
GOVERNMENT INCENTIVES PROGRAMS
- The Government has introduced an Investment Tax Allowance scheme, which encourages large companies to invest in energy efficient equipment.
- The National Climate Change Strategy also encourages the use of energy efficiency labels for home appliances, seeks to improve waste management and reduce per capita water consumption.
- The Government has created clean energy funds like the Clean Energy Research & Testbedding Programme (S$17 million (approx. US$13.5 million)) and the Solar Capability Scheme (S$20 million (approx. US$15.9 million)), to create incentives for renewable energy.
- However, at present, there are no renewable energy subsidies, targets or feed-in tariffs to incentivise renewable energy generation.
- The Renewable Energy Corporation, a large solar materials production company headquartered in Norway, invested €3 billion in Singapore to construct a solar manufacturing complex in Tuas. The complex now employs 1,500 people with an annual capacity of 1.5GW. It was opened by the Prime Minister in November 2010 and is the largest investment by the company and the largest renewable energy investment in Singapore's history.
- In late 2012, Germany's Bosch Group opened its S$18.9 million (approx. US$15 million) research and technology centre in Singapore. The site employs 1,000 people.
- Vestas Wind Systems will reportedly invest up to S$500 million (approx. US$398 million) over the next decade in Singapore to develop its largest research and development facility outside Denmark. Vestas is regarded as the world's top wind technology company and opened its Singapore office in 2007.
- An integrated biomass solar power generation plant is due to be completed by 2013. The facility will produce 9.9MW of electricity.
- A number of Indian renewable energy firms, like Mytrah Energy Ltd, ReNew Power and the Greenko Group, have considered listing on the Singapore stock exchange to take advantage of the 'business trust' structure offered in Singapore.
RELEVANT INTERNATIONAL TREATIES
- Singapore ratified the United Nations Framework Convention on Climate Change in August 1997 and the Kyoto Protocol in 2007. Once the protocol was ratified, the National Climate Change Committee was formed from the National Energy Efficiency Committee. Singapore, as a non-annex one party to the agreement, has no binding emissions targets, however it has expressed concerns over the exposure of some of its low-lying islands to sea level rise.
- Singapore is a member of the Association of South East Asian Nations (ASEAN). The ASEAN Vision 2020, adopted in 1997, calls for cooperation to establish interconnecting arrangements for electricity and natural gas through the ASEAN Power Grid and the Trans-ASEAN Gas Pipeline Projects.
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