Proposed Amendments to the Energy Market Authority of Singapore Act, Electricity Act, and Gas Act

Introduction

1. The Ministry of Trade and Industry (MTI) and the Energy Market Authority (EMA) are seeking feedback on proposed amendments to the Energy Market Authority of Singapore (EMA) Act, Electricity Act and Gas Act. The public consultation period is from 8 May to 5 June 2024.

2. In October 2022, Singapore announced a national climate target of net-zero emissions by 2050, as part of our Long-Term Low-Emissions Development Strategy. To get to net-zero, we will need to decarbonise the power sector. Power generation, which is primarily from natural gas, accounts for about 40% of Singapore’s carbon emissions today. Developing different decarbonisation pathways such as electricity imports and hydrogen will involve significant investments. Singapore’s energy landscape will also change significantly, including in the way we regulate energy markets and plan for infrastructure development. We will therefore need to update our regulatory regime to support decarbonisation, ensure energy security, and keep our power sector cost competitive. 

Proposal 1:
Establish Regulatory Regime for Centralised Gas Procurement

3. As announced in October 2023, MTI and EMA intend to establish a Central Gas Entity (CGE) to aggregate the demand for gas from power generation companies and centralise gas procurement for the power sector. This will allow us to benefit from demand aggregation, diversify our energy sources, and ensure that there is sufficient gas to meet our power needs.

4. To implement this proposal, we intend to amend the Electricity Act to (i) introduce the requirement for power generation companies to procure gas solely from the CGE, with existing gas supply contracts to be exempted from this requirement, up till the contract expiry date; and (ii) empower EMA to introduce gas procurement terms on generation companies, such as minimum gas contracting obligations to ensure they contract sufficient fuel.

5. In addition, we intend to amend the Gas Act to empower EMA to regulate the CGE, by (i) adding the centralised procurement and supply of gas to the power sector by the CGE as a licensable activity by EMA; and (ii) allowing EMA to regulate the CGE on matters such as sources and tenures for upstream gas contracts.

Proposal 2:
Allow EMA to Recover Costs for Energy Security, Market Development, and Decarbonisation Related Services

6. Amidst the energy transition, EMA may have to implement new initiatives to (i) strengthen energy security; (ii) develop a competitive market; and/or (iii) support the decarbonisation of the power sector. We intend to amend the Electricity Act and Gas Act to allow EMA to recover the costs for such initiatives. Any costs recovered will have to be approved by the Minister, and will be collected from licensees or from consumers who benefit from these initiatives. We will exercise these powers only when necessary and with due care, to ensure that overall electricity costs are kept in check.

Proposal 3:
Facilitate Shared Access to Critical Energy Infrastructure

7. Critical energy infrastructure refers to installations that are required by licensees to provide electricity and gas supplies. Due to Singapore’s limited land size, there could be instances where electricity or gas licensees need to access critical infrastructure owned by other persons, including non-licensees, in order to carry out their functions. For example, electricity importers may need access to electricity distribution infrastructure owned by other licensees in order to import electricity from other countries.

8. Therefore, we intend to amend the Electricity Act and Gas Act to allow EMA to direct¹ owners of critical energy infrastructure to enter into an agreement for licensees to gain access to the critical energy infrastructure, with reasonable compensation provided for the owner. If both parties fail to reach an agreement, either party may request for the Minister to establish an Appeal Panel to determine the reasonable terms for the agreement. These powers will only be exercised if EMA considers access necessary in the public interest to ensure energy security and reliability.

Proposal 4:
Approval Obligation for Repurposing of Critical Energy Infrastructure

9. With the energy transition and given the limited availability of land earmarked for public utilities, owners of existing critical energy infrastructure might intend to repurpose such infrastructure for other uses, even if the infrastructure is required for energy security and reliability. To facilitate EMA’s system planning and safeguard our energy security, we intend to amend the Electricity Act and Gas Act to require owners of critical energy infrastructure to seek EMA’s approval before repurposing such infrastructure.

Proposal 5:
Empower EMA to Implement Power Rationing during Emergencies

11. Members of the public are invited to submit their feedback and comments by 5 June 2024 via email at [email protected] or mailed to the address below:

Share your feedback

Ministry of Trade and Industry
100 High Street, The Treasury
Singapore 179434
Re: Energy Legislation Consultation

12. Your feedback is important to us. All comments received will be considered. However, we will not be able to individually acknowledge or address every comment. To maintain confidentiality of feedback contributors, we will anonymise and aggregate the results of this public engagement.

¹ This is similar to EMA’s current powers under Section 20A of the Electricity Act, where EMA can direct electricity licensees to allow a transmission licensee to establish a connection to the electricity licensees’ electrical plant.