SINGAPORE - Singapore has turbocharged its drive to reduce the carbon footprint of its power sector, with a new target of importing 6 gigawatts (GW) of low-carbon electricity from its neighbours by 2035.

This is a 50 per cent increase from the previous target of 4GW, which was set in 2021.

Electricity imports are expected to make up around a third of the country’s energy needs by 2035, and commercial operations under some of these import contracts could begin from 2028, the Energy Market Authority (EMA) said on Sept 5.

The Republic currently relies on natural gas, a fossil fuel, for around 95 per cent of its electricity generation. About 40 per cent of the nation’s carbon emissions comes from the power sector.

The EMA said it decided to raise its import targets due to “the strong interest by credible parties to participate in electricity import projects, and to ensure adequate supply to meet Singapore’s future energy needs”.

By late 2023, Singapore was in the exploratory stages of new electricity import deals with firms in Indonesia, Cambodia and Vietnam to import 4.2GW of electricity, which was already above the initial target.

There are three stages involved before a company is granted an electricity import licence from EMA.

The first stage entails the firm getting “conditional approval” from EMA, which means the regulator has found that a project’s proposal is technically and commercially viable. At this point, the firm will begin further surveys and feasibility studies.

If it can demonstrate its ability to meet the requirements of both the host country and Singapore, EMA will then award it a conditional licence. This is given to projects that have been found to be technically and commercially viable, and are in an advanced developmental stage, the agency said.

The third and final step is when EMA issues importer licences to companies.

At this stage, the companies must obtain the relevant regulatory approvals and secure all the necessary financing for their projects, be it a wind farm or a solar field. The companies can also start construction and commercial work at this point.

On Sept 5, the EMA announced during the Indonesia International Sustainability Forum in Jakarta that it has granted conditional licences for five projects in Indonesia. These firms – which include Pacific Medco Solar Energy and Keppel Energy – are the first to reach the second stage of the electricity import process.

The five firms, which had proposed solar projects, were each awarded conditional approval in September 2023.

EMA said the five companies are targeting to start commercial operations from 2028. The five projects will send 2GW of greener energy to Singapore.

Speaking more about the conditional licences at the Jakarta forum on Sept 5, Second Minister for Trade and Industry Tan See Leng said that what the five firms have achieved is “not a small feat”.

“This actually recognises that these projects are in an advanced developmental stage,” he said. “The conditional licences also signify that these projects have substantially demonstrated the ability to meet the stringent requirements of both Indonesia and Singapore.”

Also at the forum was Senior Minister and Coordinating Minister for National Security Teo Chee Hean, who said that the agreements announced on Sept 5 were the “next step of development” in sustainability collaboration between Singapore and Indonesia.

During the event, EMA also announced that it had granted two more companies in Indonesia “conditional approvals” to import 1.4GW of electricity.

One of the two Indonesian projects to be granted approval on Sept 5 is Singa Renewables, which plans to pipe 1GW of solar energy from Indonesia to Singapore. Singa Renewables is a joint venture between energy giant TotalEnergies and conglomerate RGE.

The other solar project, to be sited on the Riau Islands of Indonesia, is a venture between Shell Eastern Trading and Vena Energy. The project involves solar plants and battery energy storage systems that will produce 0.4GW of electricity for Singapore.

EMA said in a statement that both Singapore and Indonesia are committed to facilitating cross-border trading projects and investments in the development of renewable energy manufacturing industries. Dr Tan upheld the importance of collaboration between countries to ensure successful energy transition in the region.

“The key thing in making this transition a success is interconnectivity,” he said at the event, which was held at the Jakarta Convention Centre.

“The more highly networked, the more connected we are, the more governments can come together (to) establish a very clear, very predictable, transparent framework – both in terms of standards as well as regulation.”

The low-carbon energy from Cambodia and Vietnam is expected to come from mainly solar, hydropower and wind farms.

Singapore’s raised ambitions to import electricity come amid reports of a setback in importing hydropower from Laos, through Thailand and Malaysia.

While the Republic had started importing up to 100MW of hydropower from Laos since 2022 under a trial, Reuters reported in mid-July that the extension of the deal was stuck due to disagreements over how the energy will be transmitted through Thailand and Malaysia.

Singapore has yet to sign deals with Thailand and Malaysia due to disagreements over the quantity of power to be purchased, reported Reuters.

Singapore also has electricity import trials with Malaysia.

In early 2023, it was announced that Singapore will import 100MW of electricity from Malaysia as part of a two-year trial under a joint agreement between YTL PowerSeraya and TNB Genco. The electricity will come from the latter’s gas-fired power plant in Johor. According to EMA, the imports will start in 2024.

In April, Malaysia set up an energy exchange, inviting companies to participate in an auction to supply 100MW of green electricity to Singapore via an existing interconnection between both countries.

In addition to imports, EMA said it will continue to study all decarbonisation pathways for the power sector, including hydrogen, solar, deep geothermal and nuclear energy, as well as carbon capture and storage technologies.

Correction note: An earlier version of the story included details about the Laos-Singapore hydropower project from EMA’s website. EMA has since clarified that it is inaccurate.