MTI and EMA to Proceed with Updating the Energy Market Regulatory Regime with a View to Decarbonising the Power Sector

On 24 June 2024, the Ministry of Trade and Industry (“MTI“) and the Energy Market Authority (“EMA“) issued their Consultation Outcome following a consultation exercise that ran from 8 May to 5 June 2024.

MTI and EMA had sought feedback on proposed amendments to the Energy Market Authority of Singapore Act 2001, Electricity Act 2001 and Gas Act 2001. The proposed amendments aim to, among others, enhance EMA’s regulatory regime for the energy markets and infrastructure to ensure energy security and keep Singapore’s power sector cost competitive. These enhancements are essential as we decarbonise the power sector with a view to achieving Singapore’s net zero target by 2050. For details, please read our earlier May 2024 NewsBytes article titled “MTI and EMA Consult on Proposal to Update Regulatory Regime for the Energy Markets and Infrastructure to Move Towards Decarbonisation of the Power Sector“.

MTI and EMA have received around 30 responses to their consultation paper, with most seeking clarification on the scope of the proposed legislative amendments. The table below summarises the responses issued by MTI and EMA.

Proposed Legislative Amendment

MTI and EMA Feedback Response

Establish a regulatory regime for centralised gas procurement

  • Applies to gas users from the power sector (e.g. generation companies)
  • Legacy gas contracts not affected
  • EMA assures that the gas procurement framework will improve the security and resilience of Singapore’s natural gas supply to the power sector, while keeping prices competitive
  • Presently, no details on the Central Gas Entity’s pricing, procurement approach and performance benchmarks
  • Will not apply to non-power sector consumers

Allow EMA to recover costs for energy security, market development, and decarbonisation related services

  • EMA will seek to consult and provide reasonable notice to relevant parties before introducing new services from which costs will be recovered
  • EMA will seek to recover the costs primarily from persons who benefit from these services
  • Presently no details on the types of costs, quantum of costs and the parties EMA intends to recover these costs from

Facilitate shared access to critical energy infrastructure (“CEI“)

  • CEI refers to installations that provide electricity and gas supplies (e.g. infrastructure supporting power generation units, waterfront jetties capable of unloading fuel oil, transmission cables and gas pipelines)
  • Directives for access will be exercised only if EMA considers access necessary and in the public interest
  • CEI owners will be reasonably compensated
  • CEI owners may appeal to the Minister for Trade and Industry (“Minister“) for a review of EMA’s directive

Approval obligation for repurposing of electricity and gas assets

  • Electricity and gas assets refer to installations that provide electricity and gas supplies (e.g. power generation units, transmission cables and gas pipelines)
  • When assessing repurpose requests, EMA aims to strike a balance between owners’ commercial needs and ensuring energy security and system reliability will not be compromised
  • Electricity and gas asset owners can appeal to the Minister for a review of EMA’s decision

Empower EMA to implement power rationing during emergencies

  • Before power rationing is implemented, EMA will notify affected parties
  • During power rationing, critical needs and essential public services will be prioritised
  • EMA will not provide compensation to affected parties as power rationing is a necessary measure to stabilise the system during an emergency

MTI and EMA will finalise the proposed legislative amendments and the Bill will be tabled in Parliament in the coming months.

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