EMA and MTI seek comments on proposed changes to Energy Market Authority of Singapore Act 2001, Electricity Act 2001 and Gas Act 2001
30 May 2024
From 8 May 2024 to 5 June 2024, the Ministry of Trade and Industry (“MTI”) and Energy Market Authority (“EMA”) are conducting a public consultation seeking feedback on proposed changes to the Energy Market Authority of Singapore Act 2001, Electricity Act 2001 (“Electricity Act”) and Gas Act 2001 (“Gas Act”). The proposed changes aim to update Singapore’s regulatory regime for energy markets to support decarbonisation, ensure energy security, and keep Singapore’s power sector cost competitive. These measures are part of Singapore’s Long-Term Low-Emissions Development Strategy to achieve net-zero emissions by 2050.
Set out below is an overview of the proposals.
Establish regulatory regime for centralised gas procurement
As announced in October 2023, MTI and EMA intend to establish a Central Gas Entity (“CGE”) to aggregate the demand for gas from power generation companies and centralise gas procurement for the power sector. For more on the October 2023 announcement, please read our article “Singapore announces changes to gas procurement framework for power sector, and launches next stage of selection of a low-or zero-carbon ammonia solution for power generation and bunkering”.
The proposed changes to the Electricity Act seek to introduce the requirement for power generation companies to procure gas solely from the CGE, with existing gas supply contracts being exempted from this requirement till the contract expiry date. Changes are also proposed to empower EMA to introduce gas procurement terms on generation companies, such as minimum gas contracting obligations to ensure they contract sufficient fuel.
Further, it is proposed to amend the Gas Act to empower EMA to regulate the CGE by (i) adding the centralised procurement and supply of gas to the power sector by CGE as a licensable activity by EMA, and (ii) allowing EMA to regulate the CGE on matters such as sources and tenures for upstream gas contracts.
Allow EMA to recover costs for energy security, market development and decarbonisation of related services
Changes to the Electricity Act and Gas Act are proposed to allow EMA to recover the costs of implementing new initiatives to strengthen energy security, develop a competitive market, and/or support the decarbonisation of the power sector. Any costs recovered will have to be approved by the Minister for Trade and Industry (“Minister”), and will be collected from licensees or from consumers who benefit from these initiatives.
Facilitate shared access to critical energy infrastructure
Due to Singapore’s limited land, there could be instances where electricity or gas licensees need to access critical energy infrastructure (“CEI”) - that is, installations required by licensees to provide electricity and gas supplies - owned by other persons, including non-licensees, in order to carry out their functions. Changes to the Electricity Act and Gas Act are proposed to allow EMA to direct CEI owners to enter into an agreement for licensees to gain access to the CEI, with reasonable compensation provided to the owner. If the parties fail to reach an agreement, either party may request the Minister to establish an Appeal Panel to determine the reasonable terms for the agreement.
Approval obligation for repurposing of critical energy infrastructure
With the energy transition and given the limited availability of land earmarked for public utilities, owners of existing CEI might intend to repurpose such infrastructure for other uses, even if the infrastructure is required for energy security and reliability. To facilitate EMA’s system planning and safeguard energy security, it is proposed to amend the Electricity Act and Gas Act to require CEI owners to seek EMA’s approval before repurposing such infrastructure.
Empower EMA to implement power rationing during emergencies
Changes to the Electricity Act are proposed to equip EMA with powers to direct licensees and consumers to ration power for extended periods of time to maintain the overall stability of the power system.
Reference materials
The following materials are available on the MTI website www.mti.gov.sg, EMA website www.ema.gov.sg and REACH website www.reach.gov.sg: