With LNG imports here set to be fully liberalised even before the scheduled first LNG deliveries to the Jurong Island LNG terminal in mid-2013, discussions are underway on the possibility of integrating Singapore’s electricity and gas markets, said Energy Market Company (EMC) CEO Dave Carlson.
The move makes sense as 80 per cent of Singapore’s electricity is currently generated using natural gas feedstock, with the coming LNG supplies helping gencos here to diversify beyond just piped gas supplies from Malaysia and Indonesia.
‘There is a good dialogue taking place between EMC (which operates Singapore’s wholesale electricity market), regulator Energy Market Authority (EMA) and PowerGas (which operates the gas transportation network),’ Mr Carlson said yesterday. ‘But there are no decisions made at this point of time, although the arrival of liquefied natural gas in mid-2013 gives us enough time to plan well in advance about the benefits from integrating the two markets.’
S Iswaran, Minister in the Prime Minister’s Office and Second Minister for Home Affairs, and Trade and Industry (MTI), disclosed on Tuesday that Singapore’s sole LNG aggregator, BG Group, expects to hit its franchised sales target of three million tonnes per annum by next year. And the EMA has already begun to study the options for LNG market procurement beyond that, he said.
EMC – whose licence to run Singapore’s wholesale electricity market expires next year – recently had this renewed for another 10 years until 2022, Mr Carlson said. And as an independent operator, it is logical to run an integrated electricity and gas market here if the potential benefits provide a case for the latter.
Mr Carlson was speaking to BT ahead of the EMC’s Singapore Electricity Roundtable on Nov 1-2 – part of the Singapore International Energy Week – which will discuss the future of the electricity and gas markets here, including their potential integration; increasing fuel diversity here, and facilitating electricity trades with Malaysia. On the last, the first commercial deal between the two countries was struck in May this year, when Malaysia’s largest electricity group Tenaga Nasional bought electricity from YTL-owned PowerSeraya here for a period of more than a month to help it tide over some capacity shortages due to maintenance work on Malaysian gas production platforms.
Asked if the latest investment by Malaysia’s oil and gas giant Petronas in a 30 per cent stake in GMR Energy’s new 800-megawatt power station in Singapore will also facilitate more such deals, Mr Carlson said: ‘I don’t think there’s a direct relationship.’
‘But YTL’s purchase of PowerSeraya, and now Petronas’ purchase of a stake in GMR Energy show there is good cooperation between the two sides. Besides, there’s always talk of an Asean power grid developing, so Malaysia and Singapore are ideally placed for this.’
‘MTI and EMA are currently studying international models, and how best to achieve such international electricity trading,’ he said, adding that they will likely put out an industry consultation paper following that.
