Friday Dec 02, 2022

The Big Read: As households face soaring electricity prices, being eco-friendly can be wallet-friendly too – CNA

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“The recovery from COVID-19 has increased demand for oil, such as for use by industries, commercial and transport, so the price of oil increased,” said Assoc Prof Chang.

“The Ukraine-Russia war affected production and supply of oil (so) it also increased oil prices … As long as the war continues, the price is expected to increase,” he added. 

Dr David Broadstock, a senior research fellow and the head of the Energy Economics Division at the National University of Singapore’s (NUS) Energy Studies Institute, said the decision by Europe and other countries to stop purchasing natural gas from Russia has forced them to search for new gas suppliers.

“At the same time, there are limits to how much gas supply chains can scale up without major new infrastructure development, which would also take some years to provide.

“This is a perfect recipe for natural price increases for natural gas, as those countries which are willing and able to pay higher prices may choose to do so to ensure a secure energy supply,” said Dr Broadstock.

He also noted that China’s demand for natural gas has been consistently growing as it searches for a cleaner fuel option as compared to coal. This is especially so during the winter season, which has created long-term pressure on markets.

While all these have resulted in the rise of oil and energy prices, Dr Broadstock said that key energy commodity prices have, to some extent, stabilised. 

He added that the Energy Market Authority (EMA) implemented mechanisms following local power market disruptions in 2021, to help Singapore reach stable prices faster.

This would take about a year, other experts including Assoc Prof Chang estimated. 

On Apr 4, Second Minister for Trade and Industry Tan See Leng spoke in Parliament about these mechanisms, which include a standby liquefied natural gas facility and requirements imposed on power generation companies to “bolster existing stockpiles and provide additional layers of fuel security to cope with the short-term shocks to global gas supply”.

They were introduced after “upstream production issues in Indonesia’s West Natuna gas field and gas pressure issues from South Sumatra in the fourth quarter of 2021 caused disruptions to our piped natural gas supplies,” said Dr Tan, who is also Manpower Minister.

“As a result, some companies had to purchase more liquefied natural gas at elevated global gas prices to make up for the drop in piped natural gas supplies.”

EMA has also modified market rules, allowing the agency to direct power generation companies to use gas from its standby facility, allowing the authority to manage the cost impact on consumers. 

“These measures have ensured that we have sufficient fuel and electricity supply and stabilised the uniform Singapore energy price,” said Dr Tan.

However, experts said that the prices and impact on supply reinforce the need for Singapore to diversify its energy sources and improve its local production — which currently makes up just 5 per cent of the country’s energy supply.

Dr Chua Yeow Hwee from the Nanyang Technological University’s (NTU) economics division said: “The increase in electricity costs during the past few months is a good opportunity for the Government to accelerate the adoption of green energy.”

Dr Broadstock added: “The more power that can be produced locally, the more secure and predictable energy costs will become.

“However, there are limits to just how much solar energy can be deployed in Singapore. While more investment …….

Source: https://www.channelnewsasia.com/singapore/electricity-prices-bills-environment-solar-energy-2685141

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