EMA can now own and operate power infrastructure under changes to law
SINGAPORE – The country’s energy industry regulator can now acquire, build, own, and operate power infrastructure, after amendments to the law were passed in Parliament on Tuesday (Nov 2).
The move is intended to safeguard Singapore’s energy security and reliability, as the country decarbonises its power sector to combat climate change, Second Minister for Trade and Industry Tan See Leng said in Parliament on Tuesday.
Explaining why the Energy Market Authority (EMA) may need to operate electricity infrastructure, Dr Tan said the shift to more efficient power plants, low-carbon alternatives and renewable energy sources – including from overseas – presents many uncertainties.
These uncertainties may inhibit private investments by generation companies here, while banks may also be increasingly reluctant to finance certain types of power generation projects, he said.
“We should not under-estimate how challenging this journey will be,” Dr Tan told the House. “Some countries are experiencing an energy crunch because they have not provided sufficient safeguards and contingencies for their transition.”
The amendments will therefore empower the Government to secure the country’s electricity supply over the transition, by allowing EMA to step in and provide critical infrastructure and services to ensure the energy sector functions properly, he said.
During the debate on the amendments, several MPs sought clarity on safeguards, such as to ensure a level playing field between private generation companies and the EMA.
Mr Melvin Yong (Radin Mas) also asked if EMA, as both regulator and possibly an owner of generation companies, would be able to compete in the Singapore Wholesale Electricity Market and dictate wholesale energy prices.
In response, Dr Tan said EMA will ensure its infrastructure are subjected to the same stringent standards and requirements as their private counterparts.
He said: “EMA will put in place governance structures, and if necessary, separate subsidiaries from to mitigate conflicts of interest and ensure accountability.
“Nevertheless, I would like to reiterate that our preference has been and continues to be for the private sector to provide an operate the critical infrastructure. We remain committed to facilitating private sector investments in the energy sector.”
Amendments to the Electricity Act and the Gas Act mean it is now an offence to damage protective infrastructure housing transmission electricity cables that are 66 kilovolts and above. Previously, the law only covered damage to actual cables and pipelines.
Dr Tan said: “These are high voltage transmission cables that serve more customers. Damage to these cables will first have a greater impact on our electricity supply to the consumers and businesses.”
Apart from physical protection, Mr Louis Ng (Nee Soon GRC) asked about the Government’s plans to deal with cyber attacks on Singapore’s energy and water infrastructure.
Dr Tan said while there have not been any successful cyber attacks on Singapore’s critical energy installations, EMA has detected a few spoofing and phishing attempts targeting companies in the energy sector in the past few years.
The attacks were targeted at IT and non-critical systems and were quickly contained and addressed, and the operation of critical infrastructure were not affected.
Owners of critical information infrastructure are required to meet minimum baseline cyber requirements, including a two-hour reporting requirement of any cyber incidents to EMA and the national Cyber Security Agency so that timely remedial action can be taken, he added.
Another amendment expands the EMA’s regulatory functions under the Electricity Act so that it can implement policies and strategies to reduce greenhouse gas emissions in the import, export, generation , transmission and supply of electricity.
This comes as around 95 per cent of Singapore’s electricity is generated using natural gas, and the fossil fuel will continue to remain an important source of energy for the next few decades.
The power sector currently accounts for around 40 per cent of Singapore’s carbon emissions.
Some MPs had also raised concerns on electricity costs that may come along with Singapore’s energy transition. In response, Dr Tan said infrastructure enhancements, such as in the form of deep sea connections and power grid enhancements will inevitably add to the cost of energy.
“This is an inevitable and necessary trade off to address climate change. EMA will continue to work closely with industry partners to explore and develop cost competitive and secure solutions that will meet both our long term energy needs and low emission targets,” Dr Tan said.
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