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Opening Remarks by 2M Tan See Leng at Keppel's Sakra Cogen Plant Groundbreaking Ceremony

Opening Remarks by 2M Tan See Leng at Keppel's Sakra Cogen Plant Groundbreaking Ceremony

Mr Danny Teoh, Chairman of Keppel,

 

Mr Loh Chin Hua, CEO of Keppel,

 

Mr Takashi Tozawa, Head of GTCC Business Division of Mitsubishi Heavy Industries,

 

Mr Koichi Watanabe, CEO and Managing Director of Jurong Engineering,

 

Distinguished Guests, Ladies and Gentlemen.

 

1. A very good afternoon to all of you.

 

2. I would first like to congratulate the Keppel team, Mitsubishi Heavy Industries (MHI), Jurong Engineering Limited (JEL), and its partners, on the groundbreaking of Keppel Sakra Cogen 600MW Combined Cycle Gas Turbine (CCGT) power plant.

 

Thank you for inviting me to be part of this.

 

3. Keppel’s 600MW CCGT is a significant milestone for our power sector and is testament to the important role that private generation companies play in our power sector.

 

I am glad that Keppel, MHI and JEL are targeting to complete the power plant by 2026, which will help to meet the demands of the system and ensure we have reliable electricity supply.

 

4. This power plant will be one of the first Combined Cycle Gas Turbines (or CCGTs) to be completed in Singapore since 2016.

 

Moving forward, EMA will introduce a Centralised Process later this month to coordinate the planting of new generation capacity.

 

Centralised Process for Generation Capacity

 

5. MTI and EMA plan ahead to ensure that there is sufficient generation capacity to meet increasing energy demand.

 

6. With economic growth, electrification and digitalisation, our electricity demand has been steadily increasing over the years.

 

Even during the pandemic years of 2020-2022, which included the Circuit Breaker period, Singapore’s electricity demand peak increased by about 2.8% each year.

 

A new system peak of 7.9 GW was reached in May this year, during one of the hottest months on record.

 

7. Singapore’s power system has been in an overcapacity situation over the last decade.

 

This was due to the over-bullish investments by generation companies.

 

Over the years, as electricity demand has grown and older generation plants have retired, our reserve margin has come down.

 

By 2025, it will reach our Required Reserve Margin of 27%, which is the margin needed to ensure grid reliability given our current portfolio of generation sources.

 

8. Between 2023 and 2028, EMA expects electricity demand to grow by at least 4% each year.

 

The growth in demand is largely driven by new investments in energy-intensive sectors such as advanced manufacturing and data centres.

 

We will need more generation capacity to meet the demand growth and to replace retiring generating units.

 

9. Under EMA’s new Centralised Process, EMA will launch a Request for Proposal if additional generation capacity is needed over the next 5 years.

 

We are planning to launch such a request later this month for new generation capacity needed in 2028.

 

Only companies which are awarded a license under this process will be permitted to build new generation capacity.

 

This process helps us strike a balance between ensuring sufficient capacity for grid reliability while minimising the risk of overcapacity.

 

CCGTs in a Low-Carbon Future

 

10. Even as we embark on our energy transition over the next few decades, CCGTs will continue to play an important role in providing baseload energy supply to Singapore’s power system.

 

But the new generation of CCGTs, such as Keppel’s CCGT, will not be like those currently operating.

 

a. First, Keppel’s CCGT is a cogeneration plant, which means that it provides more than just electricity.

 

It will also be providing general utilities such as steam and firewater, which increases its overall efficiency.

 

b. Second, it will also be equipped with fuel-changeover capabilities.

 

In the event of gas disruptions, the units can switch quickly from natural gas to diesel or fuel oil within 10 minutes.

 

c. Third, it is expected to be about 10% less carbon intensive compared to the average CCGT in the system today.

As more of such efficient CCGTs enter the system, we can lower the overall carbon footprint of the power sector.

 

d. Lastly, Keppel’s new CCGT can operate on fuels with 30% hydrogen content.

 

It can also run entirely on hydrogen in the future, with the necessary enhancements.

 

I note that Keppel is intensifying its efforts to develop green hydrogen and has recently joined a consortium to develop a large-scale green hydrogen project in Australia.

 

Such future-ready capabilities will pave the way for Singapore to transit to other low-carbon fuels when it is commercially viable to do so.

 

Conclusion

 

11. I congratulate all of you, once again, on today’s significant milestone.

 

Let us work together to realise Singapore’s net-zero ambitions by co-creating a sustainable and resilient energy system.

 

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