Singapore’s leadership in this area is based on domestic needs: currently, most of its electricity is generated from natural gas, and the government has set a long-term goal of reducing this share to just over 50 percent by using clean electricity. Some of this alternative energy will come from domestic sources, such as rooftop solar panels and possibly geothermal, nuclear or hydrogen. However, given land constraints, electricity imports will be a necessary factor in Singapore’s future energy mix.
However, future demand is likely to be met from other sources, partly due to required infrastructure improvements to expand interconnections and power flows for the LTMS-PIP and partly due to the overall security and resilience benefits of power diversification. Singapore’s Energy Markets Authority recently granted conditional approval for a number of alternative power imports: contracts have been signed for 1,000 MW of solar, wind and pumped storage from Cambodia, 1,200 MW of offshore wind projects in Vietnam and up to 2,000 MW of solar from Indonesia by 2023.
Singapore’s penchant for clean energy is leading to new ideas for power routes, such as high-voltage submarine cables that allow direct power trade with Cambodia, Indonesia and Vietnam. Singapore also needs to negotiate operating and pricing agreements for cross-border power purchases from solar and wind power plants, which require different terms than traditional power sources due to their intermittent output.
Expanding interconnections will bring major savings for ASEAN. A recent study by DNV estimates that ASEAN could save US$800 billion by 2050 if countries embrace renewable energy through multilateral trade. Equally important, the study shows that expanded regional electricity trading could reduce land use for energy projects by 13 percent by avoiding unnecessary expansion of domestic power plants and energy storage.
Trading electricity opens the door to a wider range of power generation options, allowing Singapore and the region to be more selective about which projects they buy power from, and thereby target the greatest environmental impacts of investments. Many low-carbon energy projects also have significant non-carbon environmental impacts – such as river fragmentation from large hydropower projects or land-use conflicts from large solar farms.
Explicitly taking into account a number of criteria when concluding electricity trading agreements – such as demanding environmental and social impact assessments or high requirements for the certification of renewable energies – can help give preference to projects that are both clean and generally sustainable.
The Energy Market Authority could require specific standards for assessing environmental and social impacts before granting conditional approval to projects. This could encourage investors in exporting countries to meet higher standards than those that may be required in their own country and avoid projects with unavoidable negative impacts.
Coordination with the national energy suppliers of the exporting countries regarding the issuance and trading of renewable energy certificates would also be key to monitor the wider impact of electricity imports, which could ultimately be sold to private companies that consume large amounts of energy and want to achieve their corporate renewable energy targets.
Singapore alone cannot bring about change, but it can stimulate and support a regional debate on a greener ASEAN power grid. Although Singapore’s electricity needs are limited compared to its neighbors, as an early adopter it has the opportunity to explore standard-setting and build consensus on regional scaling of electricity trading.
Singapore is already a hub for technical training programmes through university centres, the Singapore Cooperation Programme and the Third-Country Training Programme with numerous international partners. Focusing future training streams on renewable energy certification standards, renewable energy grid integration and system-level planning would help pave the way for a greener and more resilient regional energy system in line with ASEAN interests.