SINGAPORE: The government will take “great care” in charting Singapore’s energy transition to ensure that it remains cost-competitive, said Second Minister for Trade and Industry Tan See Leng on Friday (Mar 1).
“In particular, we are mindful of the potential impact of energy transition on electricity prices,” he told the House during a debate on the ministry’s spending plans for the year.
“I would like to assure households and businesses that we will do our utmost best to calibrate the trajectory of our energy transition and its impact on electricity tariffs.”
These will include continued support for lower- and middle-income households on electricity bills, as well as assistance for businesses to improve their energy efficiency.
Dr Tan, who is also Manpower Minister, spoke about Singapore’s plans to transition and decarbonise its industries and overall economy – a move that is essential to keep the country relevant amid a global net-zero shift and despite its lack of indigenous renewable energy resources.
Ongoing efforts include the search for cleaner power supplies and studies on the potential of various low-carbon energy sources such as hydrogen and geothermal.
On the former, Singapore has previously announced a target to import up to four gigawatts of low-carbon electricity by 2035, which will make up about 30 per cent of Singapore’s electricity supply that year. Dr Tan said Singapore is “on track” to achieve that target.
But to decarbonise, clean energy will have to be deployed “at scale”. Such nascent technologies may involve “significant commercial and geopolitical risks or require high upfront capital expenditures”.
“All these would require substantial investment from governments and companies alike,” said Dr Tan.
This is why a new Future Energy Fund was announced in Budget 2024 to support the infrastructure investments needed to deploy low-carbon technologies when they are viable, he added.
The new fund will have an initial injection of S$5 billion (US$3.7 billion). Top-ups to the fund will be done “when our fiscal space allows for it and depending on (Singapore’s) development plans for the energy transition”, Dr Tan said.