Singapore has one of the most reliable electricity grids in the world. However, as Singapore looks to renewable energy and power imports to transition to a low-carbon energy system, and moves towards the electrification of its transport system, it is increasingly vital to ensure that its grid infrastructure remains stable and resilient. The Singapore government has implemented a good number of initiatives to ensure the resilience of the energy grid, including the use of energy storage systems (“ESS”).
Grid-scale ESS comprise of batteries and technologies connected to the power grid that can store energy and then supply it back to the grid as needed – for example, at night, when no solar power is available, or at times when electricity generation is disrupted. The Energy Market Authority (“EMA”) has, for instance, commissioned Sembcorp Industries to build, own and operate the largest ESS deployment in South-East Asia, and one of the fastest of its size to be deployed. However, Singapore critically needs the technology and the innovative urban deployment topologies that can enable a wider deployment of ESS to match the rise of renewable energy to meet the ever-increasing energy demand.
In Q4 2023, the EMA had put out a grant call to invite proposals for facilitating the wider deployment of ESS in Singapore. It is instructive to note that while grid-scale ESS needs to scale, there remain various challenges to ESS deployment, including the need for ESS solutions that are safer, denser and/or more cost-effective. Market disruptions and intense competition from electric vehicle makers have also led to rising costs for key minerals used in battery production, notably lithium. EMA has also implemented the ACCESS programme which looks at securing space, matching demands with solutions, and facilitating regulatory approvals for ESS deployment in Singapore.
At the time of this article, there are no specific customised laws for ESS.
The Electricity Act 2001 regulates the licensing requirements and market participation and settlement for ESS. The ESS acts as a generator and depending on its name-plate capacity, it may be required to be licensed as a wholesaler or a generator. An electrical installation licence will also be required for all non-domestic electrical installation with approved load exceeding 45kVA.
In addition, the following regulations may be applicable:
A myriad of other laws also apply / potentially apply to ESS. These include:
In its policy paper, EMA helpfully considered the potential role of ESS in the Singapore power system. ESS can be used to (i) integrate higher levels of solar PV and manage variable output as solar adoption increases; (ii) shift peak load and arbitrage electricity prices; (iii) provide ancillary services to the market for frequency regulation and backup reserves; (iv) serve as an alternative to enable deferment of traditional grid investments to meet periodic peaks in demand, thus driving efficient grid investments; and (v) provide voltage regulation services.
For the time being, we consider that ESS’ greatest utility may lie in the following:
It may be that regulations will be put up in due course, for ESS to fulfil their designated role/s in the Singapore power system. This would likely deal with metering and billing arrangements, compensation structures or mechanisms, and controls to safeguard consumers’ interest.
This article is produced by our Singapore office, Bird & Bird ATMD LLP. It does not constitute legal advice and is intended to provide general information only. Information in this article is accurate as of 21 January 2024.
Authors: Sandra Seah (Partner), Terrance Goh (Associate)