Transcription
My cabinet colleagues, chairman and chief executive of EMA, excellencies and distinguished guests, ladies and gentlemen, I'm delighted to join all of you this evening to celebrate EMA's 25th anniversary. It is especially meaningful for me personally because of the time I had spent in EMA, and seeing so many former colleagues, old friends, and familiar faces tonight brings back many fond memories. Didn't seem like that long ago when we were talking about LNG and testing contracts. 25 years may not seem like a very long time, but in our energy sector, it is enough to witness a generation of profound transformation.
Before EMA was established in 2010, Singapore's power sector looked very different from what it is today. As Chingi mentioned just now, back then, PUB managed the entire system from generation to transmission and distribution. We ran it as best as we could then, but we eventually realized that there was scope to do better and that greater efficiency and innovation could be achieved through competition and market discipline. And that's why we undertook a major restructuring of the sector. We corporatized and privatized the power assets. We placed the national grid under Singapore Power. We opened up power generation to commercial players, and we progressively liberalized the wholesale and retail electricity markets to give consumers more choice.
At the same time, we established EMA to oversee this newly liberalized sector, to set up and enforce the rules, to ensure fair competition, and to safeguard the reliability and security of our power supply. Over time, EMA's role evolved beyond that of a regulator. It also took on the broader responsibility of ensuring Singapore's energy security. One example was during the 2008 global financial crisis. The LNG terminal could not proceed on a commercial basis, and so EMA stepped in to build and operate the terminal, and now LNG is a cornerstone of Singapore's energy security. More recently, EMA established Singapore Gas Co. to centrally procure gas for the entire power sector. And this could not have come at a better time because when the Middle East crisis disrupted our supplies from Qatar, the company was able to move quickly to secure alternative LNG cargos.
So this approach of harnessing market forces where they work best, while intervening when strategic needs require it, has served Singapore well. Our energy system remains strong and resilient. Our power infrastructure is amongst the most reliable in the world. And we have achieved this while keeping electricity prices in Singapore broadly competitive. Of course, none of this happened by chance. It required long-term planning, difficult decisions, and importantly, close partnership between the government, industry, and the labor movement. So tonight, I want to thank all of you, past and present, for your many contributions to Singapore's energy journey. Thank you very much.
The next 25 years will be even more challenging than the last. Recent events remind us how vulnerable the world is to disruption. A conflict thousands of kilometers away can quickly ripple through global energy markets, especially when critical choke points are involved. So we cannot just rely on markets alone to secure our supply chains. Efficiency still matters, but resilience matters as well. And increasingly, we will need to invest more deliberately in energy resilience and security.
At the same time, we face a mounting challenge of climate change; the risks are becoming more severe. Yet around the world, momentum for climate action is slowing, and the longer we delay, the harder and more costly the eventual transition will become. For Singapore, navigating these twin challenges will not be easy because we import nearly all our energy. So we remain exposed to global supply disruptions, and because we have limited renewable resources of our own, our pathways to decarbonization are limited. Basically, there's no single solution for Singapore. There's no silver bullet. Instead, we will need a portfolio of solutions. That also means our energy strategy has to be more deliberate, more diversified, and more forward-looking than before. We cannot depend on any single fuel source, supplier, or technology. We have to pursue multiple pathways at the same time, balancing security, affordability, and sustainability. So let me share the broad strokes of this energy strategy.
First, in the medium term, natural gas will continue to anchor our energy mix. That's why we are building our second LNG terminal. This will give Singapore the capacity to meet all of our natural gas needs through LNG. And with Singapore Gas Co. as the central procurer of gas, we will also be able to think more strategically about our gas mix. We can build a more diversified gas portfolio. That means different contract durations, different supply sources, and even different pricing indices. It's similar to managing a financial portfolio because diversification helps reduce risk and makes the overall system more resilient.
Second, just as we import natural gas, we will also import electricity. We already have an interconnector with Malaysia, which we have expanded to import more power. We welcome more of such power links, drawing from a wider and more diverse range of sources. In fact, there is very strong interest to sell power to Singapore. But progress so far has been slow because these projects are inherently complex. They are capital-intensive undertakings, requiring sub-cables that cross multiple maritime boundaries and jurisdictions, each with its own regulatory and legal requirements. We also need to update our electricity market rules to support such imports.
Ideally, imported power should flow through our national grid, which means it must compete in the electricity market where power is dispatched based on cost competitiveness. Then we'll have to think through a number of issues. For example, we'll have to consider the implications for power reserves and overall grid stability. We will also need to consider how developers can have greater certainty of long-term revenue streams in order to secure project financing. And EMA is studying how the market framework can be updated to address these issues and enable import projects to be commercially viable. As we do so, we will also seek to preserve competition and cost discipline. That means if importers bring in conventional fossil fuel generated power, then it should not cost more than what we can generate ourselves in Singapore using natural gas. Or if importers were to bring in low carbon power, we ought to recognize the value of its green attributes. But the premium over fossil fuel generated power must still be competitive relative to other decarbonization pathways like carbon credits. So on that basis, we hope that Singapore importers will be able to advance their commercial discussions with overseas project developers and eventually reach viable arrangements.
Third, we must continue to pursue solutions to generate low-carbon power within Singapore itself. What are the options available to us today? The most obvious one is solar. And in the last 5 years, we have multiplied solar capacity almost five-fold. And we will continue to maximize every available surface: rooftops, reservoirs, and vacant land. But even if we do so, solar energy can still meet only a limited share of our total power demand. Another option is hydrogen. We have a pilot project on Jurong Island to test the use of ammonia, which is a hydrogen carrier, for power generation. And the newer combined cycle gas turbines are designed to be hydrogen-ready. And that means they can take in a blend of natural gas and hydrogen and reduce the carbon emissions in the process. But there are fundamental constraints in scaling up hydrogen for power generation. And the reason is straightforward: To use hydrogen, you first have to produce it. Then you have to liquefy it, convert it into ammonia, ship it across oceans, convert it back again, and finally burn it to generate power. At every stage of this process, energy is lost. Technology can help improve parts of the process, but it cannot eliminate these losses altogether. So this will constrain the role that hydrogen can play in large-scale power generation for some time to come. And that's why we continue to study other options, and nuclear power is one of them.
Globally, there is renewed interest in nuclear power because electricity demand is rising sharply around the world as countries electrify transport and industry and as AI and data centers consume ever larger amounts of power. Every country is grappling with the same question: how to secure enough reliable base load power while still reducing carbon emissions. Nuclear energy is well positioned to meet this demand. It is highly reliable, low carbon, independent of weather conditions, and extremely energy dense. A single uranium fuel pellet the size of your fingertip packs a tremendous amount of power, the equivalent of one ton of coal or 17,000 cubic feet of natural gas. Basically, enough to fill about 1/5 an Olympic-sized swimming pool. In some ways, this is a return to normal because in the mid-1990s, nuclear power generated around 18% of the world's electricity. That share has fallen to around 9% now, especially after a series of nuclear accidents raised public concerns about safety. But reactor technologies and safety systems have advanced considerably. Newer designs incorporate stronger containment, better engineering, and enhanced safety features. So, as countries everywhere look for reliable and low carbon power, we are now seeing the strongest pipeline of new nuclear projects in decades. This means that nuclear power's share of global electricity generation is likely to rise again over time. In our own region in Southeast Asia, many of our ASEAN neighbors, including Indonesia, Malaysia, Philippines, and Thailand, are studying nuclear energy. Vietnam is among the most advanced and plans to deploy nuclear power in the 2030s, not very far from now.
Singapore started this journey. We started looking at nuclear energy more than a decade ago. And since then, we have been building up our own capabilities, especially in nuclear safety. We have been sending people to learn about nuclear power, and they have come back, and we have built up capabilities over time. We have also been learning from countries with established civil nuclear programs to better understand the latest technologies and the regulatory frameworks needed to manage them safely. Next year, we plan to embark on the first phase of the integrated nuclear infrastructure review set out by the International Atomic Energy Agency, or the IAEA. This is part of a structured process for countries considering civilian nuclear programs. Under this process, the IAEA provides independent expert reviews to assess whether countries have the expertise, institutions, and frameworks to adopt nuclear energy responsibly. And in this first phase, the IAEA will bring together a team of experts to visit Singapore to make an independent assessment of our capabilities across 19 key areas like nuclear safety, radioactive waste management, and emergency planning. So the review will help determine whether Singapore has the expertise, institutions, and frameworks to make an informed decision on nuclear energy.
Let me be clear what this means and what it does not mean. This is not a decision to deploy nuclear power in Singapore. The purpose of the first phase of the review, phase one review, is to assess whether Singapore is ready to make an informed decision on nuclear energy deployment. The emphasis is on being ready to make an informed decision. And this is only the first phase. Should a country decide to deploy nuclear power, there is still a second phase to assess its readiness to invite bids to construct a plant and a third phase to evaluate whether it's ready to safely commission and operate its plant. Now, based on the experience of other countries that have gone through this process, the entire preparatory process and the actual infrastructure development can take well over 15 years. So this is very much a long-term commitment and undertaking for Singapore.
The considerations are even more demanding because of our unique circumstances. Safety will always be our overriding priority. As a small and densely populated city-state, we have no margin for error. So we must be confident not just in the technology itself, but in the entire supporting ecosystem around it: regulation, security, emergency response, and waste management, amongst other things. That is also why we are focusing on newer reactor technologies, including small modular reactors, as well as other advanced designs with enhanced safety features. These technologies are promising, but many are still at an early stage of deployment. It will take time for them to mature, for operational experience to accumulate, and for international safety standards and regulatory frameworks to develop further. Nevertheless, we must begin the hard work now to study global developments carefully, build our own capabilities steadily, and proceed systematically step by step. We will approach this rigorously and thoroughly. And as we embark on this journey, we will keep the public, we will keep Singaporeans informed throughout the process. When we complete the first phase of the review, we will share openly the IAEA's independent findings, including any risks and challenges highlighted, as well as the overall assessment of Singapore's readiness and progress along the way. Be it through the IAEA review or our own further studies, there may well be findings that lead us to conclude that nuclear is not the right path for Singapore. If so, we will accept the conclusion. But even then, the effort will not be wasted because the capabilities we build and the knowledge we accumulate will still be valuable, especially as nuclear power becomes part of the energy mix in Southeast Asia.
So these are the pathways we are pursuing for Singapore's energy future: Strengthening our natural gas system, expanding electricity imports, and developing low-carbon power sources from solar to hydrogen and potentially even nuclear energy. As I said earlier, there's no single silver bullet. Every pathway comes with constraints and tradeoffs. But our responsibility is to plan ahead and build resilience early, so that Singapore can continue to enjoy secure, reliable, and increasingly clean energy for the future.
EMA's role has grown significantly over the past 25 years. You began primarily as a market regulator, and today you are also an active architect of Singapore's energy future, strengthening resilience, advancing decarbonization, and planning for the long term. This work demands deep technical expertise, sound judgment, and the ability to plan and think decades ahead. Much of it happens quietly behind the scenes. When things go well, people hardly notice. They take it for granted. Things have to go well in Singapore. But when things do not go well, when a disruption happens, when there is no reliable power, everything comes to a halt. So your work underpins our economy, our society, and the daily lives of every Singaporean. Energy security is a key priority for the government. It's a key priority on our agenda. So the government will continue to provide its full support to EMA for this very important work. Minister Tan See Leng has been very active in overseeing the energy portfolio with focus and resolve, together with the team at MTI and partners across the sector. Compared to the time when I was at EMA, I see our overall capabilities have grown and the scope of EMA's work has also expanded significantly. And looking at the team today and the strong partnerships that we have forged across government, industry, and the labor movement, I am confident that MTI and EMA are well prepared for the challenges ahead. For the past 25 years, all of you have kept the lights on for Singapore. Together, we will continue to power Singapore securely and sustainably for many more years to come. Thank you very much. Happy 25th anniversary.