Singapore’s growing appetite for imported renewable energy will help to lay the groundwork for the development of a regional grid in Southeast Asia, stimulating investments in renewable energy projects, and helping to grow the manufacturing sector to meet demand for solar panels and batteries.

Energy Market Authority (EMA) chief executive Puah Kok Keong said Singapore is willing to make the investments required to help the country tap renewable energy from its neighbours, which, in turn, forms the backbone of the ASEAN regional power grid.

Such a grid can improve interconnectedness within countries and incentivise investments in domestic renewable projects, he added.

According to the International Renewable Energy Agency, US$290 billion (S$380 billion) is needed for the region to boost renewable energy capacity to reach the ASEAN target of having 23 per cent of its energy produced from renewable sources by 2025. As at 2022, renewable energy made up 15.6 per cent of ASEAN’s energy supply.

“People have always recognised that there are benefits to having an ASEAN power grid. But the impetus to make this a reality today is much stronger compared with what it was 20 or 30 years ago,” said Mr Puah in his first interview with the media since taking the helm of Singapore’s energy regulator in July 2024.

The ASEAN regional grid, in the works for decades, made headway in 2022 when Singapore began importing 100 MW of hydropower from Laos via Thailand and Malaysia.

In October 2024, this was extended to another 100 MW of electricity imports from Malaysia’s grid, which comprises coal and natural gas, as part of the project’s second phase.

The renewed push for multilateral electricity trade comes as the region is hungry to decarbonise its growing economies, moving away from fossil fuels like coal and cutting planet-warming emissions to meet climate change targets.

Singapore has already signed agreements with Indonesia, Cambodia, and Vietnam to import some 5.6 gigawatts (GW) of clean electricity by 2035 – which is close to half of the 13 GW of Singapore’s generation capacity in 2023.

It currently has a target of importing 6 GW of low-carbon electricity from its neighbours by 2035, which will account for around 30 per cent of the Republic’s electricity demand that year. Electricity demand is expected to grow by around three per cent to five per cent every year.

With its space constraints, Singapore has limited capacity to produce renewables domestically, and is reliant on at least 95 per cent natural gas. Even in 2035, natural gas is expected to make up at least 50 per cent of Singapore’s electricity mix.

Given that the Republic already faces higher electricity prices compared with its neighbours, Singapore has a greater “willingness to pay” for imported clean electricity, Mr Puah said.

The Straits Times had earlier reported that imported electricity may not be more expensive than other low-carbon options that Singapore is exploring, such as nascent carbon capture technology.

But importing renewable energy would incur other costs, such as development and laying of subsea cables to transmit the power over long distances.

The construction of such cables could also plant the seeds for the development of a wider ASEAN regional grid, Mr Puah said.

These transmission cables could benefit other countries in the region, which have access to abundant renewable resources but may not have electricity generation sources located where the end-users are.

For example, even in a country like Indonesia, which has abundant renewable resources, most of its economic activities are in Java, which is located away from where the clean energy is being produced, Mr Puah noted.

“In order to attract investments to develop renewable energy resources in this region, you will need to find a way to connect supply and demand, and the way to do it is to strengthen and build this regional ASEAN power grid,” he said.

“And if you can do that, then there will be people who will invest in upstream power production, wind, solar, hydropower and so on, and... the power lines to transmit the power,” he added.

As project developers invest in and source renewable energy hardware such as solar panels and batteries to meet this demand, Southeast Asia’s manufacturing sector could receive a boost, he added. This could eventually extend to the building of cable manufacturing plants in the region.

Many power plants will also have to be built at a far larger capacity in order to supply a fixed amount of electricity to regional countries, Mr Puah said.

For example, just to supply 2 GW of electricity from Indonesia to Singapore, a solar plant will need a generation capacity of around 11 GW-peak, and have battery storage capacity of about 20 GW, taking into account intermittencies, he noted.

Renewable energy sources like solar are subject to fluctuations due to weather and cloud cover.

Storage systems, such as batteries, can also help to address some of these issues.

To begin these renewable imports come 2035, Singapore’s own power grid will also need to be upgraded, which could entail some inconvenience, noted Mr Puah.

Much of Singapore’s infrastructure of underground power lines was built in the 1990s and will need to be replaced and renewed in the next 10 or 20 years to accommodate the growing sources of electricity, he said.

“To build a line that is about 1 km long, the time taken to... start digging, putting it in place and so on can take three to four months. And you can imagine the inconvenience that may cost to road users,” Mr Puah added.

New facilities will also be needed to receive imported electricity power when it lands onshore, while connections will also need to be laid to link the imports to substations here that will distribute the electricity islandwide.

When asked if the grid upgrades will increase electricity bills, Mr Puah said he is unable to definitively say yes, but noted that the absolute costs related to the grid will increase.

In electricity tariffs, the two largest cost components are grid charges and fuel costs.

But with the higher costs from investing in infrastructure such as cables and power lines, the overall cost borne by each electricity user depends on the number of people using the electricity and the amount that they each consume, Mr Puah said.

The Government will gradually develop this infrastructure to keep pace with rising electricity demand – which is planned 10 years in advance, with revisions every year. Mr Puah said EMA will work with SP Group on the amount of investments needed to renew the grid.

“Once agreed upon between EMA and SP, then the cost of renewing and maintaining the grid will eventually translate into grid charges that all of us as consumers will have to pay.”

Source: The Straits Times ©️ SPH Media Limited. Permission required for reproduction.