SIEW 2012: Minister S Iswaran unveils futures, pricing and awards initiatives; highlights potential of LNG for Asia

(Picture credit: EMA)

S Iswaran, Minister, Prime Minister's Office & Second Minister For Home Affairs and Trade & Industry opened the Singapore Energy Summit today--making three key announcements and highlighting Singapore's commitment to energy diversification. 

He said the government will soon start public consultations on the possible launch of an electricity futures market and on the introduction of Demand Response as part of the national electricity market. He also announced the launch of the Singapore Energy Awards.

In explaining Singapore's diversified energy strategy, Minister Iswaran spoke of the significance of the country's Liquefied National Gas (LNG) terminal which will begin operations in the second quarter of 2013 and which he said "would bode well for the emergence of a more vibrant LNG industry in Singapore and in Asia".

On the potential for electricity futures trading--similar to markets already established in New Zealand, Australia and the UK--the Minister explained: "Independent retailers will be able to participate in the market by purchasing futures contracts and in turn offering competitive packages to consumers. 

"Consumers will also be able to hedge their risks by locking in longer-term prices, while generation companies stand to gain by using the futures contracts to hedge against their fuel price and operational risks during plant outages."

He said the government is studying implemntation options and would be inviting stakeholder opinion as part of the process.

Minister Iswaran said the Energy Market Authority (EMA) will launch the consultation process on Demand Response with a view to allowing consumers to participate more actively in the electricity market by curtailing their demand in response to high prices.

"This can moderate price spikes, lower energy costs and generate system-wide savings. Consumers who curtail their demand could potentially also share in these system-wide savings and be rewarded for taking action," said the Minister. 

In addition to these government initiatives, the Minister said the role of individuals, research bodies and businesses in developing a strong energy industry was behind the launch of the Singapore Energy Awards.

"The energy sector is diverse and there is scope for individuals, organisations and companies, big and small, to contribute to the dynamism of our energy ecosystem by demonstrating excellence in industry leadership, capability development and technology innovation," he explained.

Minister Iswaran told SES delegates that, ahead of the Singapore LNG terminal's opening next year, demand for LNG is already stronger than had been initially expected. 

"With the development of the terminal, Singapore will be well-placed to diversify our gas supply and tap on the global LNG market. With this initiative, we also hope to catalyse the development of an ecosystem of businesses such as LNG trading, break-bulk services and LNG bunkering, that would bode well for the emergence of a more vibrant LNG industry in Singapore and in Asia," the Minister said. 

BY : EMA staff