Mr Yip Hon Weng: To ask the Minister for Trade and Industry in light of the plans to revise the electricity market structure (a) what are the safeguards in place to ensure that volatility of energy prices are minimised; (b) what are the benefits to residents and consumers; and (c) when are the changes targeted to be implemented.
Oral Answer (to be attributed to Minister of State for Trade and Industry Low Yen Ling)
1. Mr Speaker, I thank the Member for his question. Second Minister for Trade and Industry Mr Tan See Leng has explained at length, in his reply yesterday, the safeguards that we intend to put in place to manage the risks of volatility in our energy market.
2. Allow me to broadly recap these measures.
3. First, EMA will introduce a centralised approach to facilitate investments in new generation through a competitive tender, to ensure that we continue to have sufficient generation capacity in time to come.
4. Second, EMA will institutionalise some of the emergency measures that we had introduced late last year in the wake of the global energy crisis, as permanent features of our market. These are regulations requiring gencos to maintain sufficient fuel for power generation, and the standby fuel facility to guard against risks of gas supply disruptions. EMA will also be working with the industry to explore ways to aggregate gas procurement and obtain longer term, more secure contracts. These measures will help to safeguard energy security and enhance the resilience of our natural gas supply.
5. Third, EMA will also enhance the regulatory requirements imposed on electricity retailers, to ensure that they are sufficiently prepared and better able to withstand market volatilities. EMA will also look into tightening the eligibility criteria for consumers on Wholesale Electricity Price plans, so that only larger consumers who are better equipped to deal with the risks of price volatilities would be allowed to enter into such plans.
6. Collectively, these measures will bring about a stronger and more secure power system, so that residents and consumers can continue to look forward to a stable and reliable supply of electricity for years to come. EMA will be consulting the industry and the public on the details of these proposed changes in due course. We plan to implement these enhancements progressively from 2023 onwards.
7. Thank you.