The Ministry of Trade and Industry (MTI) and the Energy Market Authority (EMA) will establish a single buyer of natural gas for Singapore’s power generation sector next year, in a bid to improve the security and resilience of natural gas supplies.
Singapore’s current gas procurement framework, which relies on individual power generation companies’ procurement strategies, cannot guarantee that the nation will have sufficient gas to meet its power needs during times of crisis, says Minister for Trade and Industry Gan Kim Yong in the Singapore Energy Lecture — the opening speech for the Singapore International Energy Week (SIEW) on Oct 23.
“Moving forward, we will take a more deliberate and coordinated approach to gas procurement,” says Gan. “We will aggregate the demand for gas from the power generation companies and centralise the procurement and supply of gas to the power sector.”
Should overall electricity demand exceed that indicated by the power generation companies (gencos), the entity will procure the additional volume of gas needed.
As the sole buyer of upstream gas for the power sector, the entity will be in a better position to negotiate for more favourable contracting terms and optimise system needs, says EMA.
In addition, the entity will enjoy greater economies of scale and can procure gas from diversified source countries to reduce concentration risk, EMA adds.
See also: EMA seeks bid for new power plant, introduces minimum net worth for electricity retailers
The entity can also enter into longer-term gas contracts, which can help to provide more stable prices and supply, says the market regulator.
EMA will consult the industry on the details of the centralised gas procurement framework in the coming months.
During the 2021-2022 global energy crisis, gencos reduced the volume of their gas contracts when gas prices were high, which led to large swings in wholesale electricity prices. Gencos have also been reluctant to enter into long-term gas contracts, which typically offer a greater certainty of delivery and price stability, as they do not want to be exposed to gas market volatility and uncertainties in the long term, says EMA.
See also: Energy Market Company launches electricity procurement portal for businesses
The move follows guardrails announced in October 2022 to strengthen Singapore’s energy market structure, after electricity retailers exited the market in late-2021 due to surging energy prices.
Safeguards implemented this year include a centralised process to coordinate the entry and exit of generation capacity, enhancing regulatory requirements on electricity retailers to strengthen consumer protection and a temporary price cap to guard against extreme price volatility in the wholesale electricity market.
Six consortiums shortlisted for ammonia project
EMA and the Maritime and Port Authority of Singapore (MPA) have shortlisted six consortiums to proceed in a closed request for proposal (RFP) to provide a low- or zero-carbon ammonia solution for power generation and bunkering on Jurong Island.
The RFP is the next stage in the selection of a developer for the project, following an expression of interest (EOI) that was launched in December 2022 and closed in April.
EMA and MPA received 26 proposals from local and foreign companies, says Gan. “We also saw interest from a good number of upstream ammonia producers and downstream technology providers.”
Ammonia is currently one of the most technologically-ready hydrogen carriers with an established international supply chain for industrial use, say EMA and MPA in an Oct 23 statement. “Low- or zero-carbon fuels such as hydrogen and ammonia may also have multiple end-use pathways for power generation and bunkering.”
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The closed RFP will be launched before the year ends. From among the six shortlisted consortiums, the government will choose a lead developer to jointly develop the proposed end-to-end ammonia solution.
This solution comprises generating 55-65 megawatts (MW) of electricity from imported low- or zero-carbon ammonia via direct combustion in a gas turbine or combined cycle gas turbine and facilitating ammonia bunkering at a capacity of at least 0.1 million tons per annum (MTPA), starting with shore-to-ship bunkering followed by ship-to-ship bunkering.
According to EMA and MPA, the project positions Singapore as one of the first countries in the world to test and deploy a direct ammonia combustion power plant and support the holistic assessment of ammonia bunkering for both international shipping and domestic harbourcraft. “If proven viable, the project will contribute significantly to unlocking the potential of low-carbon ammonia as a low-carbon fuel.”
No decision on nuclear
Singapore has been “closely monitoring” nuclear energy, but has not made any decision to deploy the technology, says Gan in his speech.
“We conducted a pre-feasibility study on nuclear energy more than 10 years ago, which concluded that nuclear energy technologies available then were not suitable for deployment in Singapore,” he adds. “But we need to build capabilities to understand advanced nuclear energy technologies that are becoming safer and have the potential to be cost competitive, so that we can study the options seriously when these newer technologies have become viable.”
Singapore has been engaging international organisations like the International Atomic Energy Agency (IAEA) to “learn from the world’s best”, says Gan.
He also notes growing interest in nuclear energy from countries in the region. “We are working with our neighbours through Asean platforms to facilitate information-sharing and collectively build up the region’s capabilities.”
Indonesia, Thailand, the Philippines and Vietnam, for example, are exploring the development of small modular reactors to decarbonise their power grids.
The government is building up expertise to understand advanced nuclear technologies and their suitability for Singapore, says Gan. “Small modular reactors (SMRs) show promise in being safer than conventional large scale reactors. For example, some SMRs are designed to cool safely and passively without requiring external systems or operator actions during emergencies. We will deepen our collaboration with countries that have capabilities in SMR technology to strengthen our understanding of these technologies.”
He adds: “In short, we must keep our options open and stay abreast of promising industries and technologies.”
