Singapore consumers unlikely to see big price hike on clean imported electricity: observers

SINGAPORE – The average consumer is unlikely to see a big increase in his electricity bill as Singapore begins importing renewable energy in the next few years, observers say.

They added that clean energy will mainly be purchased by companies that want to reduce their emissions.

Imported electricity – generated from sources such as solar, wind and hydropower – is expected to be more expensive due to the high costs of the necessary battery storage solutions and transmission cables.

In early September, the republic raised its electricity import target for 2035 from 4 gigawatts (GW) to 6 GW after giving the green light to an additional 1.4 GW of solar power from Indonesia.

The seven companies will import about 3.4 GW of solar power from Indonesia, with five of them expected to start commercial operations of their projects from 2028.

In response to queries from The Straits Times, an Energy Markets Authority (EMA) spokesman said the cost of importing low-carbon energy would not necessarily be higher than the cost of other low-carbon energy sources.

Apart from renewable energy imports, Singapore is considering a range of other clean energy options, such as geothermal energy, green hydrogen and carbon capture and storage technologies.

“When assessing different electricity import proposals, EMA takes into account a number of factors, including price competitiveness and source diversity. (The agency) actively works with importers to optimise their projects and reduce costs, for example by optimising landing sites and maritime corridors,” the spokesman said.

A spokesperson for Vena Energy, which in September received conditional approval to import 400MW of solar power from Indonesia’s Riau province, told ST the company was committed to keeping electricity costs at a “competitive level”.

However, the final price will depend on several factors, such as the development of the transmission infrastructure, regulatory approvals and market conditions at the time of project implementation.

The renewable energy company has partnered with Shell Eastern Trading to develop an import project, with the oil giant committing to purchasing clean electricity from it.

Shell has a target of achieving net zero emissions by 2050, which means it must reduce emissions from its operations and the fuel and energy products it sells to its customers.

A spokesman for Pacific Medco Solar Energy, which will import 600MW of electricity from the Indonesian island of Bulan, said it would tender all of its onshore and offshore assets to ensure the electricity it supplies to Singapore is competitively priced, and expected large corporate power users to be buyers.

Mr Melvin Chen, head of energy and renewables consulting for Asia Pacific at Wood Mackenzie, said he expected imported electricity to be purchased by companies with sustainability goals, so the average Singaporean would likely not feel the brunt of higher prices.

He noted that large technology companies in particular that own data centers may feel a greater need to source clean energy to reduce emissions.

For example, companies like Meta and Google, which operate in Singapore, have set a goal of achieving net zero emissions by 2030.