SINGAPORE ― Singapore’s expanding plans to tap into regional clean power markets will need to be economically attractive for producers and transmitters of electricity in order to succeed, industry executives said this week.
Regional grid interconnection is central to Singapore’s strategy to decarbonize, with the country’s Energy Market Authority (EMA) estimating clean power imports will account for 30-75 percent of its electricity consumption by 2050, from zero now.
Eka Satria, CEO of Indonesia’s Medco Power, among the firms awarded conditional licenses to sell power to Singapore, said the city-state’s proposed projects could require $20 billion to $30 billion in investments.
“Ensuring that this investment can be returned fairly is important. We need to ensure that there is enough market in Singapore long term to take that [power],” he said during the Singapore International Energy Week conference this week.
“The elephant in the room actually is the commercial viability.”
To enable providers to recoup initial outlays, Singapore is prepared to give 30-year import licenses to companies that invest in the projects, EMA’s CEO Puah Kok Keong said.
Singapore aims to import 6 gigawatts (GW) of low-carbon power by 2035 and has awarded conditional approval for 10 projects from countries including Australia, Cambodia and Vietnam, with Indonesia accounting for more than half at 3.4 GW.
Singapore’s ability to wean its economy off carbon depends on the development of a regional power trading network, which is also crucial to arresting southeast Asia’s rising dependence on fossil fuels by drawing foreign direct investments and scaling up supply chains, industry executives said at the conference.
Janice Bong, a managing director at Singapore utility Keppel Energy, another company that has been awarded a conditional license to import power, said permitting processes need to be aligned to allow Singapore’s grid to connect across national boundaries via subsea cables.
Cambodian Energy Minister Keo Rottanak said policymakers and leaders of the Association of Southeast Asian Nations (Asean) had to make sure that they could derisk investments “so that money can flow in quickly” for a regional grid.
“The subsea cable, it tends to be more expensive and much more complex to undertake, but we believe that financial viability of this project is possible if the 10 countries…put in place a regulatory framework and policy support framework,” Rottanak told Reuters.
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