EMA allowed to recover costs of energy security initiatives

Electricity rates may be raised for those who benefit directly, but agency won't seek profit

- Cheryl Tan

Cheryl Tan Correspondent Parliament on Sept 9 passed changes to a law that will help the authorities recover the cost of initiatives undertaken to safeguard Singapore's electricity supply in a climate-friendly way.

Second Minister for Trade and Industry Tan See Leng said the Energy Market Authority (EMA) an agency under his ministry will need to undertake new initiatives for energy security, market development and the transition away from pollutive fossil fuels to cleaner forms of energy.

The changes to the existing EMA Act, passed in Parliament on Sept 9, will allow the Government to recover costs associated with such initiatives to ensure the proper functioning of Singapore's energy system, he said. It can do so by raising electricity prices for those who benefit from the initiatives.

A Ministry of Trade and Industry (MTI) spokesperson told The Straits Times there are safeguards in place to ensure any cost recovery measures are justified, such as requiring the minister's approval for new rates.

"For example, it would potentially affect only the entities directly benefiting from such initiatives. This targeted approach would thus avoid having a broad-based hike in electricity prices that would affect the general population," the spokesperson added.

In his speech, Dr Tan cited the example of the standby liquefied natural gas facility, which was introduced by the EMA in 2021 to stockpile supplies of the fuel, during the energy crisis after Russia invaded Ukraine.

"The (standby facility) reduced volatility in the wholesale electricity market and gave retailers the assurance to offer electricity contracts to more consumers,” said Dr Tan. "However, EMA is unable to legally recover the operating costs of such a critical facility despite the benefits conferred to all electricity users."