Is Singapore’s over dependence on gas a boon or bane?

Experts believe that gas will account for almost 90% of total electricity produced by 2020, but is the country prepared to face various supply risks?

Natural gas is the largest source of power generation in Singapore, accounting for 80.9% of the total electricity production in 2010. This is a contrast to the fuel mix in 2000, where only 18.5% of power was accounted for by natural gas and fuel oil was the dominant thermal fuel.

However, the country has become dependent on gas and its fuel mix is much less diverse than the global average which makes it vulnerable to a number of supply risks such as under-investment in energy production by energy exporters, geopolitical conflicts which may disrupt supply, high energy prices and increased fuel demand in import destinations.

Research firm Global Data, nonetheless, forecasts that the country’s power generation is expected to increase to a rate even higher than its capacity amid all odds.

Global Data estimates that power generation from thermal fuel sources –oil and gas – will grow at a Compound Annual Growth Rate (CAGR) of 4.4% during 2011–2030 and increase from 43,091 GWh in 2011 to 98,205 GWh by 2030.

The country’s cumulative thermal installed capacity, on the other hand, is expected to increase at a CAGR of 3.3% to reach 19,398 MW by 2030, from the estimated 10,478 MW in 2011.

How would that be possible? Here’s from Global Data:

Gas, the way forward

By 2020, it is expected that 87.5% of the total electricity produced will be from gas, and therefore the country plans to diversify its fuel resources and import Liquefied Natural Gas (LNG) by 2013. The government is developing Singapore’s first LNG import terminal, and a new company, the Singapore LNG Corporation Pte Ltd., was established in order to oversee the project which is expected to be completed by 2013.

Transmission and Distribution Infrastructure

The country has strong transmission and distribution infrastructure which is well connected in the capital city and has good connectivity with the majority of the smaller islands. However, Singapore aims to improve connectivity with its smaller islands, whose electrification ratio is very high. In 2009, the country had a total length of 29,600km of transmission and distribution which included 400kV (kilo volts), 230kV, 66kV, 22kV and 6.6kV substations. SP Power is the country’s sole transmission company and it heavily invests in the annual upgrade of the country’s transmission system. The company is also currently developing two cable tunnels which will enable the faster and more frequent installation of transmission cables in the future, in particular with the systematic replacement of aging 230kV transmission lines. New substations which will improve connectivity with smaller islands are also under construction.

The country is also investing in the development of cross border interconnection with Malaysia and Indonesia, a move which will open an avenue for cross border electricity exchange and the option of exporting power to other countries. The country possesses a transmission and distribution loss of just 3%, a percentage which is expected to be maintained in the future. Singapore is one of the first Asian countries to heavily invest in smart grids, and SP Power has announced plans to equip 530 substations with wireless technology for the remote monitoring of its 6.6kV network within the coming year. The country has a highly advanced T&D system, which is one of the most efficient in the world. With such a strong emphasis on infrastructure and the future development of smart grids, the future scenario is expected to be stronger than the current scenario.

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Tags: Singappore power market, Singapore energy, natural gas