Ensuring Grid Reliability with Increasing Electricity Demand and Retiring of Older Power Generation Plants
Ministry of Trade and IndustrySpeakers
Summary
This question concerns ensuring grid reliability and maintaining a 27% reserve margin despite rising electricity demand and the retirement of older generation plants. Minister for Trade and Industry Gan Kim Yong stated that the Energy Market Authority (EMA) has introduced a Centralised Process to manage new capacity, including a July 2023 Request for Proposal. To safeguard supply, the EMA is upgrading the grid with Singapore Power and may use temporary generation units or delay the retirement of older plants. New emission standards will be introduced by end-2023 to improve plant efficiency while pursuing the 2050 decarbonisation goal. This transition includes maximising solar energy, importing low-carbon electricity, and exploring hydrogen alternatives to ensure environmental and grid sustainability.
Transcript
87 Mr Sharael Taha asked the Minister for Trade and Industry with increasing electricity demand from new investments in energy-intensive sectors and the retiring of older power generation plants (a) what is the plan to ensure grid reliability and to generate above the required reserve margin of 27%; (b) whether older power generation plants will be considered for continual operation if the newer plants are not ready; and (c) whether such consideration will put our transition to low- or zero-carbon power generation plans at risk and its impact to our environment.
Mr Gan Kim Yong: The reserve margin, which provides for planned and unplanned outages of generating units to safeguard the reliability of our power system, is currently in excess of 30% today, which is above the 27% required reserve margin (RRM). While we expect the reserve margin to decrease over the next few years due to increasing demand, there will be sufficient generation capacity to meet the RRM of 27%.
To ensure sufficient generation capacity, the Energy Market Authority (EMA) has introduced a new Centralised Process to launch a Request for Proposal when additional generation capacity is needed in our power system. Only companies awarded a licence under this process may plant new generation capacity. EMA launched the first RFP in July 2023 for new generation capacity needed in 2028. This process strikes a balance between ensuring sufficient capacity for grid security and reliability while minimising the risk of overcapacity. EMA has also been working with Singapore Power to upgrade our grid. These upgrades are planned in tandem with EMA’s Centralised Process.
To mitigate potential delays to new generation capacity coming online, EMA is working with the generation companies on measures, such as the installation of temporary generation units and reviewing the retirement plans of the older generation plants.
We are also continuing with our plans to decarbonise the power sector by 2050, by maximising solar deployment, importing low-carbon electricity and exploring low-carbon alternatives, such as hydrogen. To improve plant efficiency, EMA will also be introducing emission standards by end-2023.