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Singapore Market Update: Renewable Electricity Import Brings New Opportunity to Corporate Buyers

As a low-lying island state, Singapore is critically vulnerable to the effects of climate change. As a part of the country’s efforts to embrace sustainable development, the recently introduced Green Plan 2030 will strengthen Singapore’s existing efforts under the UN’s 2030 agenda.

The Green Plan is a 10-year sustainable development agenda that includes many initiatives, such as achieving zero waste, developing green spaces in the city, greening public transportation, and expanding clean energy with the aim of quadrupling solar energy deployment by 2025. Historically, Singapore has been constrained in the large-scale deployment of renewables by land space and natural resources. Through the Green Plan, Singapore seeks to achieve net zero emissions by leveraging in-country clean energy development, electricity imports and hydrogen.

For some time, multinational businesses with operations in Singapore have been demanding renewable options to green their energy supply. With the reveal of the Green Plan, many local companies have also been spurred into action. This has increased demand beyond the already-high levels from foreign companies with operations in the country and who have ambitious renewable energy procurement targets.

Singapore’s electricity import program

To bridge the gap between limited in-country renewable energy resources and the high demand from corporates, Singapore is launching an electricity import pilot. The trial program seeks to expand the share of clean energy available to companies and address the small, but populous, island’s challenge of installing enough clean energy top meets its net zero goal, by tapping neighboring countries for additional capacity.

The initial trial period will run for two years, allowing time to learn and refine the technical and regulatory approach to importing electricity. The Singapore-peninsular Malaysia interconnector is already set up to bring electricity from Malaysia to Singapore on an emergency basis. Once the trial begins, the interconnector will no longer sit idle and electricity will start flowing across for corporate buyers in 2022.  

The program will initially take advantage of the interconnector’s 24/7 100MW capacity, which translates into 800+ GWh of intermittent (solar) and non-intermittent (biomass and hydro) renewable energy. This first tranche of clean energy will likely go fast, as there are many experienced buyers in Singapore who will be well-placed to move quickly. However, there will likely be larger-scale imports available to businesses in the future as a result of the ongoing trial and the growing cooperation between Singapore and other countries producing renewable electricity in the region.

The import of renewable electricity will be a game-changer, giving Singapore the resources it needs to dramatically scale up its renewable energy capacity. The winning developer of a project in the electricity import program is expected to sell the capacity to multiple corporate buyers via virtual power purchase agreements (VPPAs) or as part of a green electricity retail contract. Until now, there were only a few government programs that have resulted in several hundred megawatts of renewable capacity since 2013. These programs have been very limited due to the land constraints and lack of natural resources that other countries use to create large amounts of renewable energy, such as wind. Although they have not been the only way that corporates in Singapore can procure renewable electricity, government-sponsored programs are the primary opportunity. Therefore, the import program has the potential to dramatically expand corporate access to renewable energy in Singapore.

Prep your company for renewable opportunity in Singapore

Prospective buyers are strongly advised to build Singapore into their procurement strategy early thanks to the complex market dynamics. Companies with near-term renewable energy goals will need to remain vigilant to capture this renewable electricity import opportunity due to high demand and relatively low capacity

Singapore is still considered a relatively new market for corporate renewable energy buying. Opportunities and risks are constantly fluctuating, meaning buyers need a close read of the market to be successful – including understanding the many rules and regulations around the new import pilot.

Schneider Electric is the most established global corporate renewable energy advisor with experts on the ground in the market. We are closely connected to developers and regulators and our local presence means our team is well-positioned to set your company up for success in renewable energy procurement in Singapore. Contact us to learn more.