Government's Plans to Further Liberalise Energy Market
Ministry of Trade and IndustrySpeakers
Summary
This question concerns Mr Desmond Choo’s inquiry on how energy market liberalisation and projects like JTC’s SolarRoof will moderate electricity prices, alongside the Government’s future liberalisation plans. Minister Chan Chun Sing explained that while Singapore is a price taker for natural gas, the Government promotes competition through the nationwide Open Electricity Market rollout starting in late 2018. To reduce exposure to volatile global fuel prices, the Government is diversifying energy sources by scaling solar capacity from 145 megawatt peak in 2017 to one gigawatt peak beyond 2020. Projects like SolarRoof are central to this strategy of raising solar adoption to 350 megawatt peak by 2020 to enhance long-term price stability. These initiatives collectively aim to improve the cost-effectiveness of the electricity supply and provide more choice for all households and businesses.
Transcript
64 Mr Desmond Choo asked the Minister for Trade and Industry (a) how will the further liberalisation of the energy market and introduction of new energy sources, such as JTC's SolarRoof project, help to moderate prices of electricity in the short term and long term; and (b) what are the Government's plans to further liberalise the energy market.
Mr Chan Chun Sing: Singapore relies on imported fuel to meet our energy needs, with natural gas accounting for about 95% of our electricity generation. Our electricity prices are thus largely driven by movements in the global energy markets, given that we are a small country and price takers for natural gas.
Nevertheless, the Energy Market Authority of Singapore (EMA) has pursued various measures to improve the price-competitiveness of our electricity supply. EMA has progressively introduced competition into our electricity market since the 1990s, so that companies would strive to be more cost-effective and offer better service in competing for customers. This includes our retail electricity market, which EMA has gradually opened up to competition since 2001, by allowing larger businesses to purchase electricity from retailers, instead of buying from SP Group at the regulated tariff.
EMA is working to open up the rest of our retail electricity sector through the Open Electricity Market (OEM), which would allow all households and small businesses to choose an electricity supplier and price plan that best suits their needs. We introduced a soft launch of the OEM in Jurong in April 2018 and are on track to begin the nationwide rollout from the fourth quarter of this year. We will be sharing more details in the next few months.
Beyond promoting competitive markets, the Government has also sought to diversify our sources of generation to reduce our reliance on fossil fuels and exposure to volatile global fuel prices. For instance, we have been working to facilitate the adoption of solar power, which has grown from 0.4 megawatt peak (MWp) in 2008 to around 145 MWp by end-2017. Initiatives, such as JTC's SolarRoof project, are part of our plan to raise solar adoption further to 350 MWp by 2020, and one gigawatt peak (GWp) beyond 2020.