Feedback and response to public consultation on proposals to amend Energy Market Authority of Singapore Act 2001, Electricity Act 2001, and Gas Act 2001

30 July 2024

On 24 June 2024, a summary of key feedback and responses from a public consultation conducted from 8 May 2024 to 5 June 2024 by the Ministry of Trade and Industry (“MTI”) and the Energy Market Authority (“EMA”) on proposed legislative amendments to the Energy Market Authority of Singapore Act 2001, Electricity Act 2001, and Gas Act 2001 was made available (“Summary”).

The proposed amendments are intended to update Singapore’s regulatory regime for energy markets to support decarbonisation, ensure energy security, and keep Singapore’s power sector cost competitive. These measures are part of Singapore’s Long-Term Low-Emissions Development Strategy to achieve net-zero emissions by 2050. For more about the public consultation, please read our previous article “EMA and MTI seek comments on proposed changes to Energy Market Authority of Singapore Act 2001, Electricity Act 2001, and Gas Act 2001”.

In total, MTI and EMA received about 30 responses with most respondents seeking clarification on the scope of the proposed amendments. MTI and EMA have taken the inputs into consideration when finalising the proposed legislative amendments and the resulting Bill will be tabled in Parliament in the coming months. Set out below is a summary of some of the key feedback and responses received.

Proposal to establish regulatory regime for centralised gas procurement

Pursuant to feedback on the scope of the requirement to procure gas from the Central Gas Entity (“CGE”), the response explains that the proposed centralised gas procurement regime will apply to gas users from the power sector (e.g. generation companies) but will not affect non-power sector consumers (e.g. industrial gas users) and legacy gas contracts. EMA is reviewing the request to also exempt embedded generators from this requirement. EMA will regulate the proposed GCE to ensure that the gas procurement framework improves the security and resilience of Singapore’s natural gas supply to the power sector, while keeping prices competitive.

Proposal to allow EMA to recover costs for energy security, market development, and decarbonisation related services

Respondents queried whether the Future Energy Fund (“FEF”) announced at Budget 2024 could be used to fund energy security, market development, and decarbonisation services provided by EMA. To read more about the FEF, please see our article “Singapore to establish Future Energy Fund to invest in energy transition infrastructure”. In addition, our article “Budget 2024: Summary of key tax changes” discusses initiatives for investment in emerging technologies, including via the establishment of the FEF.

Responding to feedback received, EMA informs that it will provide reasonable notice to all relevant parties before introducing new services for which costs will be recovered from consumers. Specifically, EMA will seek to recover the costs mainly from persons who benefit from these services. It will also explain and communicate any cost increases transparently. As a safeguard, all cost recovery proposals will have to be approved by the Minister for Trade and Industry (“Minister”).

Proposal to facilitate shared access to critical energy infrastructure

The Summary clarifies the definition of critical energy infrastructure (“CEI”) stating that the term refers to installations that are required by licensees to provide electricity and gas supplies (e.g. infrastructure supporting power generation units, waterfront jetties capable of unloading fuel oil, transmission cables, and gas pipelines). This proposed amendment is similar to EMA’s current powers under section 20A of the Electricity Act 2001. When determining whether to direct owners to facilitate shared access to CEI, EMA will consider both the interests of owners and the national priority of ensuring energy security in land-scarce Singapore. Directives will only be exercised if EMA considers such access necessary and in the public interest to ensure energy security and reliability.

Similarly to the provisions in section 20A of the Electricity Act 2001, owners may appeal to the Minister for a review of EMA’s directions. Additionally, should parties fail to reach an agreement on the terms of use, either party may request the Minister establish an Appeal Panel to determine the reasonable terms for the agreement (e.g. compensation amount).

Proposal for approval obligation for repurposing electricity and gas assets

The Summary clarifies that the term “electricity and gas assets” refers to installations that are required by licensees to provide electricity and gas supplies (e.g. power generation units, transmission cables, and gas pipelines). When assessing requests to repurpose electricity and gas assets away from their primary use, EMA will seek to strike a balance between owners’ commercial needs, while ensuring that energy security and system reliability in land-scarce Singapore will not be compromised. Owners may appeal to the Minister for a review of EMA’s decision.

Proposal to empower EMA to implement power rationing during emergencies

Respondents to the consultation queried when power rationing would be activated, how rationing measures would be communicated, and whether alternative measures (e.g. demand response) could be triggered to reduce the likelihood of power rationing. There were suggestions to limit the duration of power rationing, to exclude entities performing critical activities from such measures, and to compensate affected parties for any losses or damages caused by power rationing.

The Summary clarifies that power rationing is an emergency measure that will be undertaken as a last resort during a crisis to reduce the risk of blackouts. EMA will relax these power rationing measures once the measures are no longer required for system stability.

Before implementing power rationing measures, EMA will notify affected parties via different communications channels. During power rationing, critical needs and essential public services (e.g. healthcare, public security, and communications) will be prioritised. However, it is not practical for EMA to compensate affected parties since power rationing, if implemented, is a necessary measure to stabilise the system during an emergency.

Reference materials

The Summary of key feedback and the response to the same is available on the REACH website www.reach.gov.sg.