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Singapore’s Energy Market Authority (EMA) will enhance regulatory requirements on electricity retailers to build a stable electricity market resistant to the volatility of global energy markets, as reported by Strait Times on October 25. The move came after six retailers quit Singapore’s electricity market in 2021 when natural gas prices spiked amid a global energy crunch, thus affecting about 140,000 households and 11,000 business accounts. The departure of these retailers indicates that they had not been sufficiently prepared for market volatility and had taken large unhedged positions, according to Minister for Trade and Industry, Gan Kim Yong. Gan added that stricter requirements for retailers could pick up credible industry participants with healthy finance conditions and sustainable business propositions, thus forming a stronger and more secure power system.
Singapore relies on imported gas to meet 95% of its electricity demands, making it vulnerable to almost any global turbulence. Amid the global fuel shortage at present, the EMA has ordered power generation firms to procure sufficient fuel based on their available generation capacity, and the directions will be effective until the end of March 2023. On the other hand, Singapore is looking to expand its power generation capacity in the next five years to ensure adequate capacity amid volatile conditions. Moreover, the government will make permanent a set of temporary crisis management measures carried out in 2021, such as setting up backup fuel facilities in case of gas supply disruptions.
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