Parliament passes Energy Transition Measures and Other Amendments Bill

27 September 2024

On 9 September 2024, the Energy Transition Measures and Other Amendments Bill (“Bill”) was passed in Parliament. The Bill seeks to amend the Energy Market Authority of Singapore Act 2001 (“EMA Act”), the Electricity Act 2001 (“EA”), and the Gas Act 2001 (“GA”) to:

  • introduce guardrails for Singapore’s electricity market;
  • strengthen the ability of the Energy Market Authority (“EMA”) to regulate the power sector; and
  • establish the Future Energy Fund (“FEF”).

Key features

Set out below are the key features of the Bill as highlighted in the second reading speech by Second Minister for Trade and Industry Dr Tan See Leng: 

Support decarbonisation efforts 

  • Set up FEF under EMA: Clause 6 of the Bill will amend the EMA Act to establish the FEF as a statutory fund under EMA. The FEF will focus on supporting capital expenditures and will not be used to subsidise fuel costs and recurrent expenditures.
  • Facilitate shared access to critical energy infrastructure: Clauses 8 and 34 of the Bill will amend EA and GA to empower EMA to direct owners or occupiers of critical energy infrastructure to allow licensees access to their infrastructure. Both parties will be provided with 30 days to agree on the terms of access to the critical energy infrastructure, including reasonable compensation for the owners or occupiers. Issuing such a direction will be a last resort, when EMA deems that such access is necessary and in the public interest or to ensure energy security and reliability.
  • Approval required when repurposing electricity and gas assets: Clauses 16 and 35 of the Bill will amend the EA and GA to require persons owning, managing, or controlling key electricity and gas assets to obtain approval from EMA before repurposing such infrastructure away from their original use. In evaluating these requests, EMA will consider such persons’ commercial interests, while ensuring that Singapore’s energy security and system reliability is not compromised.

Enhance system functions 

  • Recover costs for energy security, market development and decarbonisation related initiatives: Clause 6(2) of the Bill will amend the EMA Act to allow EMA to recover costs associated with energy security, market development and decarbonisation-related initiatives, which ensure the proper functioning of the energy system. EMA will only recover the costs for such initiatives and will not seek to make any profit. The Minister for Trade and Industry (“Minister”) must approve any new rates that EMA may propose. A Cost Recovery Advisory Committee comprising non-Government representatives will be set up to provide the Minister with independent advice on EMA’s proposals. 

Safeguard energy security 

  • Establish a regulatory regime for centralised gas procurement: Clause 18 of the Bill will amend EA to require prescribed power generation companies to procure gas solely from a centralised gas entity (“Gasco”), unless otherwise allowed by EMA. Clause 25 of the Bill enables EMA to specify the minimum volume of gas that prescribed power generation companies must procure from Gasco. The Bill will amend relevant sections of the GA to, among other things, provide for centralised gas procurement as a licensable activity and grant EMA regulatory authority over Gasco. In particular, clause 29 of the Bill enables EMA to specify the volume of gas that Gasco must procure to ensure sufficient gas supplies for Singapore.
  • Empower EMA to implement power rationing during emergencies: Clause 17 of the Bill will amend EA to empower EMA to implement power rationing, with the approval of the Minister. Businesses will be protected from liability if compliance with EMA’s directions on power rationing results in a breach of their contracted obligations to take or provide electricity or fuel. Power rationing is to serve as a last resort as part of Singapore’s preparation for an increasingly uncertain world.

Reference materials

The following materials are available from the Parliament website www.parliament.gov.sg and the Ministry of Trade and Industry (“MTI”) website www.mti.gov.sg: