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Request for Proposal Launched for New Generation Capacity in 2028
31 Jul 2023
EMA | Media Releases
31 Jul 2023
To ensure we have sufficient power generation capacity going forward, the Energy Market Authority (EMA) has launched a Request for Proposal (RFP) for interested companies to build, own and operate a new Combined Cycle Gas-Turbine (CCGT) with a capacity of at least 600-megawatt (MW), by end-2027. The RFP is part of the new Centralised Process to guide and facilitate the development of new generation capacity.
Centralised Process for New Generation Capacity
Today, investments in new power generation technology and capacity are primarily driven by generation companies’ (gencos) commercial considerations, which considered their individual business plans, their outlook on electricity demand, and price signals in the Singapore Wholesale Electricity Market (SWEM). While this approach incentivises innovation and efficiencies in the genco’s operations, decision-making at the individual genco level may not always result in adequate generation capacity to meet the power system’s overall demand.
To ensure we have sufficient generation capacity in time to come, in October 2022, the Ministry of Trade and Industry announced that the Energy Market Authority would be introducing a Centralised Process to facilitate and guide private investments in new generation capacity through a competitive tender. Under the Centralised Process, EMA will continue to forecast electricity demand on a rolling 10-year basis, along with the available generation capacity. If projections indicate insufficient generation capacity to meet the power system’s requirements, EMA will conduct an RFP and invite the private sector to build, own, and operate the necessary new generation capacity. If there is insufficient or inadequate interest from the private sector to plant the new capacity, EMA will step in to provide the required new capacity.
Between 10 April and 8 May 2023, EMA conducted industry and public consultations on the Centralised Process. Industry players were generally supportive of EMA’s plans to coordinate capacity building at the national level. A fuller account of the feedback received and EMA’s responses is in the Final Determination Paper, which is available at https://go.gov.sg/ema-consultation-centralised-process.
Request for Proposal for New Capacity Required in 2028
Singapore’s electricity demand has been steadily increasing over the years with economic growth, increasing electrification and digitalisation. Between 2013 – 2022, electricity demand has grown by a Compound Annual Growth Rate (CAGR) of 1.5%. During the pandemic years of 2020-2022, peak electricity demand grew by 2.8% CAGR. A new system peak demand of 7.9 gigawatt (GW) was reached in May this year, during one of the hottest months on record.
Based on EMA’s projections, Singapore’s system peak demand is expected to grow by ~3.4%-6.5% CAGR over the next five years, reaching between 9.3 GW and 11.6 GW by 2028. This is driven largely by the growth in existing electricity-intensive sectors as well as emerging electricity-intensive sectors. Specifically, industries within the advanced manufacturing, digital economy, food and transport sectors are likely to experience significant growth over the next few decades.
Looking at the total electricity supply projected in the coming years, EMA has assessed that additional generation capacity will be needed in 2028. EMA is launching a Request for Proposal for interested companies to build, own and operate one new Combined Cycle Gas Turbine (CCGT) of at least 600MW capacity, by end-2027. The plant should be operational by 2028.
Mr Ngiam Shih Chun, Chief Executive of EMA, said, “With the anticipated growth in energy demand, it is crucial that we establish measures to meet future needs while ensuring the resilience of our energy supply. The Centralised Process plays a vital role in guiding private investments in new generation capacity. Through this process, we can facilitate the development of the required new generation capacity, enabling us to meet Singapore's power system demands while embracing cleaner and more sustainable energy sources. We welcome industry participation in the RFP and look forward to working together to shape the future of Singapore's energy landscape."
Participants of the RFP are expected to develop hydrogen-ready and lower-carbon intensity solutions and technologies to contribute to the development of a greener and more resilient power system. Please visit https://go.gov.sg/rfp-for-new-generation-capacity for details of the RFP. Interested parties are invited to submit their proposals by 31 October, 3pm SGT.