Singapore unveils ‘fundamental’ gas supply shift to shore up energy security
- Singapore relies on gas to generate 95 per cent of its electricity and surging global gas prices have roiled its power market in recent years
- The government said it will create a new entity, to be known as Gasco, to aggregate gas demand from power generators and purchase additional supplies
The city state relies on gas to generate 95 per cent of its electricity. The move is the latest among several pre-emptive measures taken by the government to safeguard the country’s energy security after surging global gas prices roiled the city state’s electricity market in recent years.
“This is a fundamental shift in our approach toward gas procurement,” Minister for Trade and Industry Gan Kim Yong said at a conference during Singapore International Energy Week. “We believe that this is necessary to create a more stable and secure power system that will ultimately benefit the consumers.”
“This will create greater economies of scale and allow us to negotiate more favourable gas-contracting terms, procure gas from diverse sources to reduce concentration risk, and enter into longer term gas contracts to provide more stable prices and supplies,” he said.
The Ministry of Trade and Industry and the Energy Market Authority (EMA) will create the entity, to be known as Gasco, in 2024 to aggregate gas demand from power generators and purchase additional volumes when electricity demand exceeds expectations, EMA said in a statement.
This will apply to all future gas demand from the power sector, including gas-contract renewals, it said.
A surge in global gas prices in 2021 created volatility in wholesale electricity markets and forced several power retailers in Singapore to exit.