Singapore looks to import electricity

By Feng Zengkun, Jessica Cheam, Grace Chua, The Straits Times, 9 July 2011

FLICK a switch here, and the electricity could come from countries such as Thailand or Vietnam in the next decade. It could also come from the wind, sun, water and even nuclear plants in those countries.

Last week, the Government said it would start gathering feedback by the year-end on how best to import electricity into the Republic in the future.

And yesterday, the Indonesian government announced plans to build power plants at Batam in the Riau Islands and eventually sell that electricity to Singapore, reported The Jakarta Post.

The coal-burning plants, which would have a total capacity of 4,000MW, are aimed at reducing gas exports to the Republic, said Indonesian Energy and Mineral Resources Deputy Minister Widjajono Partowidagdo. Some of the gas that would otherwise be sold to Singapore could be diverted to Java instead.

Singapore already imports 80 per cent of its energy needs from Malaysia and Indonesia through gas pipelines, which go to power-generation companies here that turn the gas into electricity and feed it into the national grid. The other 20 per cent comes from fuel oil and other sources such as waste and renewable energy.

But with the growth in population and businesses, Singapore will need to increase energy supply to meet higher demand.

Having more sources of fuel for electricity will also protect Singaporeans from disruptions in electricity supply and keep prices affordable.

Experts said the move to look into ways of importing electricity is timely because of the global economic downturn in the past few years and uncertainty over fuel prices, which have increased by 30 per cent in the past year.

Mrs Jeanne Cheng, managing director of Singapore Power subsidiary SP Services, said the Republic is especially vulnerable to price increases, because it imports almost all of its fuel for electricity.

‘We have to look for cheaper fuel,’ she said at a forum at last week’s Singapore International Energy Week. ‘I am already worried about next year’s electricity prices.’

Electricity here is not subsidised, as the Government wants to encourage people to conserve energy and cut wastage.

But it has tried to keep prices affordable through long-term fuel contracts with other countries.

The idea of importing electricity was mooted in the Economic Strategies Committee report released last year.

The committee had suggested that Singapore could import electricity generated from regional sources such as coal, geothermal energy or hydropower, as an alternative source of energy for the future.

Mr Edwin Khew, chairman of the Sustainable Energy Association of Singapore, an industry body, told The Straits Times that diversifying the Republic’s energy sources could help keep jobs here if the world economy worsens.

‘The cheaper you are in terms of energy supply, the more attractive you are to industries,’ he said.

One way to ensure electricity continues to remain affordable and available is to get it from more countries, said experts.

Singapore will complete a new liquified natural gas (LNG) terminal by 2013, which will allow it to get fuel from countries beyond its immediate neighbours.

The fuel will be shipped here and converted to electricity.

Another plan in the works is an Asean power grid, which would use gas pipelines to allow members to trade fuel and expand power line connections between them.

This could be done by connecting smaller geographical areas, before linking them up to form a regional grid.

Asian Development Bank energy specialist Zhou Aiming said trading energy throughout the region will help to lower the electricity cost and carbon footprint.

‘Especially in this age of globalisation, every country depends on other countries for imports and exports. We should expand this idea of energy trading through the region,’ he said.

Experts said opening up the market for electricity will make it more competitive, possibly resulting in cheaper electricity bills.

Besides the new LNG terminal, a new coal and biomass power plant in Tuas will be ready by 2014, with coal supplies to come from Indonesia and biomass from the region.

The Government is conducting a study into the possible use of nuclear energy here, and will release its initial findings next year.

The idea is for energy to be generated in different countries and different ways, which are then fed into the national grid, said Minister in the Prime Minister’s Office S. Iswaran last week at the launch of this year’s Singapore International Energy Week.

Mr Khew said: ‘For example, Malaysia, Indonesia and Singapore could work together and build an offshore nuclear power plant on an island somewhere.’

But these options come with sizeable challenges.

Assistant Professor Chang Youngho from Nanyang Technological University’s economics division noted that countries such as Malaysia and Indonesia need to meet their own growing demand, and do not have excess capacity.

Even if countries are willing to sell electricity to Singapore, the technology used to transport electricity also needs to be improved, said experts.

Currently, power lines cannot be too long because of energy loss during transmission. This means that Singapore will be limited to nearby countries for electricity imports in the near future.

Said electrical and computer engineering professor Liew Ah Choy from the National University of Singapore: ‘Realistically, power lines can go from here to only Malaysia and Indonesia.’

There are two 230-kilovolt submarine cables that link Malaysia’s national power grid to Singapore’s network in Senoko, which can carry 200MW of electricity. In the past, the two countries have supplied electricity to each other through these networks during emergency outages.

If Singapore were to ink any deal to import more electricity from Malaysia in future, more cables will have to be built.

As for an Asean grid, Mr Iswaran said governments have to decide who should bear the cost of building the infrastructure.

‘We need to talk to industry players,’ he said. ‘It may well be that private investors are prepared to invest in such infrastructure in return for (guaranteed electricity) purchases from Singapore.

‘Others might say the Government needs to step in before we can go forward.’

Mr Zhou said countries trading electricity need to iron out interconnection standards and the terms of the trade.

‘Countries should bear in mind the risks involved when one nation depends on another (for energy). For example, energy trades can fail for political reasons,’ he said.

Others noted that factors such as grid security and the power source’s sustainability would also have to be considered.

Mr Khew asked: ‘If electricity from coal is produced in a foreign country but used here, who is responsible for its carbon footprint?’

The good news is that Singapore has some time to mull over its options.

The Energy Market Authority estimates that Singapore currently uses at most two-thirds of its 9,890MW licensed power-generation capacity.

Power-generation companies say this idea of importing electricity, and from more varied sources, will come onstream only in five to 10 years.

Mr Lim Kong Puay, president and chief executive of power generator Tuas Power, said: ‘At this time, there are a lot of efficient power plants coming into the market, so the need for electricity imports is less urgent.’

He warned against the oversupply of electricity here in the short term.

Investments by companies here to support the new LNG terminal could be threatened if electricity is imported here in the near future, he said.

But other experts said the Government’s idea of importing electricity is right on schedule, because electricity production is a time-consuming process.

Designing a plant and planning for connection take several years, and governments need time to consult their citizens and work out a framework for electricity deals, they noted.

Prof Liew also suggested that the Government consult academics for more innovative ideas, such as building an underwater power station to extend the country’s electricity reach.

Energy Studies Institute chief economist Tilak Doshi said: ‘Anything that adds to the choices of fuels and taps energy technology can only assist us.

‘But what the market will need is a stable environment, technology standards and a plan for the future.’

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