Public Consultation On Energy (Resilience Measures And Miscellaneous Amendments) Bill

Ministry of Trade and Industry

Consultation Period: 27 Aug 2021 - 20 Sep 2021

Status: Closed - Summary of Responses

Consultation Outcome

Summary of Key Feedback Received from the Public Consultation Exercise on the Draft Energy (Resilience Measures and Miscellaneous Amendments) Bill

1. On 27 Aug 2021, the Ministry of Trade and Industry (MTI) and Energy Market Authority (EMA) published a public consultation document to seek public feedback on the draft Energy (Resilience Measures and Miscellaneous Amendments) Bill. The public consultation closed on 20 Sep 2021. In total, MTI and EMA received 16 responses from the industry and public.

2. Most of the feedback focused on the Bill’s proposed clauses, which are to: (a) empower EMA to impose requirements on licensees to reduce greenhouse gas emissions; (b) empower EMA to acquire, build, own and/or operate critical infrastructure; and (c) clarify the role of ‘responsible persons’ to ensure that gas installations are inspected regularly and properly maintained. We appreciate the feedback provided by respondents and have outlined our responses below.

Summary of Key Feedback and MTI’s Response

Clause to empower EMA to impose requirements on licensees to reduce greenhouse gas emissions

3. The majority of the respondents recognised that this was needed to facilitate the decarbonisation of electricity generation, although some also suggested that the standards should only be imposed on new generation units. Some respondents also suggested that it was sufficient to rely on existing carbon taxes to incentivise the reduction of carbon emissions in the power sector.

4. We are grateful for the support and constructive feedback. Singapore has made strong commitments to reduce carbon emissions as part of our enhanced 2030 Nationally Determined Contributions (NDC) and 2050 Long-Term Low-Emissions Development Strategy (LEDS). While we recognise the role that carbon tax plays in incentivising emitters to lower emissions, the proposed clause will allow EMA to develop further targeted measures to transition the sector to low-carbon generation sources and reduce the sector’s emissions. EMA will take into account respondents’ feedback, work with the industry to develop reasonable standards, and provide a transition period for existing generation units as needed.

Clause to empower EMA to acquire build, own and operate critical infrastructure, including generation capacity

5. Some respondents were supportive of the clause as they recognised that this would allow EMA to safeguard the reliability of Singapore’s power system. However, other respondents were concerned that EMA would act as both regulator and owner/operator of the generation units, and these units would compete with existing units in the Singapore Wholesale Electricity Market (SWEM) and depress wholesale electricity prices.

6. Having a safe, secure, and reliable supply of electricity is critical to Singapore’s survival. As part of the energy transition, enabling EMA to build, own and operate critical electricity infrastructure will become increasingly important in safeguarding the security and reliability of our electricity supply. We would like to reiterate our commitment to ensuring a competitive wholesale electricity market. Proper governance structures will be put in place to ensure fair competition and mitigate any potential conflicts of interests. EMA will be engaging the industry further on the details.

Clause that clarifies that “responsible persons” are required to ensure that gas installations are inspected at stipulated time intervals and properly maintained under the Gas Act

7. Respondents were supportive of this clause as it safeguards public safety.

Conclusion

8. We thank all respondents for their valuable feedback. We have taken these into consideration when finalising the proposed legislative amendments. The Bill will be further discussed in Parliament in the coming month.

Detailed Description

EXTENSION NOTICE

The consultation period for the Public Consultation on the Energy (Resilience Measures and Miscellaneous Amendments) Bill has been extended to 20 September 2021.

Introduction

The Ministry of Trade and Industry (“MTI”) and the Energy Market Authority (“EMA”) are seeking public feedback on the Energy (Resilience Measures and Miscellaneous Amendments) Bill. The public consultation period is from 27 August to 16 September 2021. 

Background

1. Singapore has made strong commitments to reduce carbon emissions as part of our enhanced 2030 Nationally Determined Contribution and Long-term Low-emissions Development Strategy. MTI/EMA are embarking on a multi-decade programme to transition our electricity generation to low-carbon generation sources through the four supply “switches”:

     a. First, by enhancing the energy efficiency of natural gas power plants; 

     b. Second, by accelerating solar deployment; 

     c. Third, by tapping on regional power grids for low-carbon electricity imports; and 

     d. Fourth, by developing low-carbon solutions such as hydrogen and carbon capture, utilisation and storage solutions which will enable decarbonisation in the longer-term. 

2. At the same time, almost all the existing natural-gas fuelled power plants will be retiring over the next 1 to 2 decades, as they reach their end-of-life. EMA will need to manage several aspects of the energy transition, while maintaining energy reliability and affordability. 

3. The Energy (Resilience Measures and Miscellaneous Amendments) Bill sets out proposed amendments to the Energy Market Authority of Singapore Act, Electricity Act and Gas Act, to enable EMA to implement this energy transition, while ensuring the sustainability, security, and reliability of the power sector. The key amendments are explained below.

Key Amendments

Enhance Energy and Carbon Efficiency of Electricity Generation 

4. Amendment to enable EMA to implement measures (e.g. policies, standards) to require electricity generation licensees to reduce greenhouse gas emission standards. Natural gas power plants provide more than 95% of Singapore’s electricity demand today, and will continue to be needed for medium term, before low-carbon alternatives such as hydrogen become viable. The proposed amendment to the Electricity Act will enable EMA to promote the use of energy and carbon-efficient technologies through the setting of greenhouse gas emissions standards. It will complement EMA’s existing incentive schemes such as the Energy Efficiency Grant for Power Generation Companies¹ to encourage power generation companies to improve the energy efficiency of their existing units, and shift towards cleaner and more efficient modes of power generation.

Safeguard Energy Security and Reliability

5. Amendments to enable EMA to acquire, build, own and/or operate critical infrastructure. The COVID-19 pandemic and transition to cleaner energy sources (e.g. solar, electricity imports) have dampened investors’ appetite for the building of new generation capacity. To ensure sufficient and reliable electricity supply during the energy transition, the proposed amendment to the EMA Act and Electricity Act will empower EMA to build, acquire, own, and operate critical power sector infrastructure if the private market fails to do so.  

6. Amendment to enable EMA to raise capital or issue bonds for infrastructure. EMA will need capital to finance the construction of these critical infrastructure when necessary. The proposed amendment to the EMA Act will allow EMA to raise capital by issuing bonds to complement EMA’s existing ability to raise capital through commercial or Government loans. 

Other Amendments

7. Amendments to enhance the protection of critical electricity and gas infrastructure. The proposed amendment to the Electricity and Gas Acts will allow EMA to enhance the protection of critical electricity and gas transmission infrastructure and safeguard the security and reliability of electricity and gas supply. The proposed amendments will make it an offence for any person to damage protective infrastructure housing cables/pipelines (e.g. cable tunnels). This will enhance current regulatory powers which only penalise offenders who damage the actual cables/pipelines.

8. Amendment to clarify the ability to draw down on electricity retailers’ deposits to offset outstanding settlement payments to protect consumers’ interests. Electricity retailers are required to place deposits with the Energy Market Company (EMC), SP Services Ltd, and SP Power Assets Ltd to offset outstanding settlement payments for purchases from the wholesale electricity market, market support services and grid charges. These protect consumer interests by reducing the amount of default costs borne by consumers in insolvency situations. The proposed amendment to the Electricity Act clarifies that EMA and its appointed licensees (i.e. EMC, SP Services Ltd and SP PowerAssets Ltd) can draw down on deposits placed with them, notwithstanding the provisions of the Insolvency, Restructuring and Dissolution Act 2018. 

9. Amendment to streamline the granting and extension of electricity and gas licences. Minister currently approves all applications to grant and extend licences. The proposed amendment will empower EMA to do so instead. 

10. Amendment to clarify that “responsible persons” are required to ensure that gas installations are inspected at stipulated time intervals and properly maintained, under the Gas Act. The proposed amendment to the Gas Act will safeguard public safety, by imposing an obligation on ‘responsible persons’ to ensure that inspections, in addition to the required maintenance, repair and renewal works, are carried out. 

11. Amendments to update the definition of “market support services”. The proposed amendments to the Electricity Act clarifies that the market support services licensee can carry out inspections of electricity installations in premises to ensure public safety. 

Request for Comments and Feedback 

12. MTI and EMA invite parties to provide their views and comments on the draft Energy (Resilience Measures and Miscellaneous Amendments) Bill 2021 as set out in Appendix 1 by 20 September 2021. Electronic submission is encouraged. Please use the template in Appendix 2 for your submission and send it to mti_feedback@mti.gov.sg.

13. Please note that the draft amendments are released only for the purpose of consultation and does not represent the final legislation. All comments received during the consultation exercise will be reviewed thoroughly and, if accepted, will be incorporated into the Bill for introduction in Parliament.

¹ The Genco Energy Efficiency Grant encourages gencos to invest in energy-efficient equipment and technologies through the provision of grants. The first and second Grant Calls were launched in April 2019 and January 2021 respectively.

Draft of the Energy (Resilience Measures and Miscellaneous Amendments) Bill [PDF, 140 KB]

Submission Template for Energy (Resilience Measures and Miscellaneous Amendments) Bill [DOCX, 14 KB]