Singapore has taken a step towards making its energy market leaner and more responsive.
Consumers may soon benefit from a wide range of energy prices selected according to the timing and size of their consumption.
Businesses may also be able to hedge against the risk of high energy prices.
The Energy Market Authority (EMA) on Monday launched two consultation projects - one for Singapore’s planned electricity futures market, and the other to integrate demand response into the country’s electricity market.
The futures market will allow industry consumers to lock in longer-term prices while independent retailers can purchase such contracts to offer competitive packages to consumers.
Enabling demand response will allow consumers to reduce their consumption at critical times when peak demand is the highest, or in response to market prices.
The aim is to reduce the load on power grids, which will help to moderate price spikes and lower energy costs.
Minister for the Prime Minister’s Office, Mr S Iswaran, announced this at the Singapore Energy Summit held at Marina Bay Sands, saying that this would enable Singapore’s market “to be more price responsive to consumer demand”.
“This concept has been proven in other jurisdictions, and we are keen to hear your views on how we can make this part of Singapore’s market,” he told the conference.
Mr Iswaran also noted that countries face a global challenge in ensuring energy security in an energy landscape characterized by volatility in oil supply and demand caused by tensions in the Middle East, the health of the US and European economies and the advent of new sources such as unconventional gas and its impact on energy markets.
Singapore has sought to diversify its energy sources to address this challenge. He noted that the city-state is conducting research projects and test-beds in many areas, including renewable energy, electric vehicles, and smart grid-related technologies.
Its Liquefied Natural Gas (LNG) terminal is on track to commence operations in the second quarter of 2013, and the demand for LNG is already stronger than initially expected, he added. LNG is natural gas that has been compressed to liquid form for ease of storage and transport.
He also announced a new Singapore Energy Award, which will recognise organisations and individuals who have made outstanding contributions to develop Singapore’s energy sector.
The Singapore Energy Summit is part of the week-long Singapore International Energy Week 2012, now in its fifth year, which is an annual meeting of policymakers, industry players and thought leaders to discuss key issues and developments in the energy sector.
