New Govt-Linked Firm Could Speed Up Singapore's Clean Energy Import Plans

It will address set-up of grid infrastructure to deliver electricity and plug financing gap

- Chin Hui Shan

Singapore recently took one step closer to satiating its hunger for clean power from the region, with the setting up of a government-linked company to oversee the development of electricity interconnectors between countries.

This development is significant as it directly addresses a key pain point in importing electricity—the set-up of grid infrastructure to deliver electricity from where it is generated, such as a solar farm in Indonesia, to households and offices here.

There is currently low appetite among financial institutions to fund such infrastructure, largely due to the perceived high risks and large upfront costs.

As noted by Ms Sharon Seah, coordinator at the Asean Studies Centre and Climate Change in South-east Asia Programme at the ISEAS-Yusof Ishak Institute in Singapore, a big hurdle to realising a regional grid is project financing and assessing whether projects are bankable.

But the setting up of Singapore Energy Interconnections (SGEI) in April could help to increase investor confidence and attract new funding—and accelerate the Republic's drive to import more clean-generated electricity.

SGEI had on May 30 told The Straits Times that its role is to invest in, develop, own and operate interconnectors to import electricity. This comes after SGEI announced its first deal to develop a new subsea electricity cable between Indonesia and Singapore.

Singapore has a target of importing 6 gigawatts of electricity by 2035—about a third of its energy needs then.

The Republic currently relies on natural gas, a fossil fuel, for around 95 per cent of its electricity.

Dr Dinita Setyawati, a senior energy analyst at energy think-tank Ember, said the establishment of SGEI is likely to attract increased financing and leverage additional resources for the grid, such as capital, expertise and technology.