SINGAPORE - The Republic will have to keep an eye on energy costs even as it moves to reduce carbon dioxide emissions from its power sector, due to the knock-on impact on people's lives and the economy.
Energy Market Authority (EMA) director of policy and planning Law Gee Yong said: "It's well and good to have low-carbon, sustainable energy but if it costs 50 cents per kilowatt-hour (kWh), it will harm our competitiveness on the global stage and affect the livelihoods of our own people as well as the lifestyles they want to lead."
Mr Law was speaking on Thursday (April 14) at a seminar titled Rethinking Energy in South East Asia, organised by Finnish manufacturing company Wartsila and the Finnish Business Council Singapore.
The electricity tariff currently stands at 27.94 cents per kWh. This is after a 10 per cent increase for the April-to-June period by grid operator SP Group last month, from 25.44 cents per kWh previously.
"The increase is mainly due to higher energy cost arising from significantly higher global gas and oil prices exacerbated by the conflict in Ukraine," SP Group had said.
Most of Singapore's energy - 95 per cent - is generated by burning natural gas, which is considered the cleanest form of fossil fuel.
Forty per cent of Singapore's emissions now come from the power sector.
But the country aims to have 30 per cent of its electricity supply from low-carbon electricity imports by 2035, and has set a net-zero target for its power sector by 2050.
EMA has identified solar power, regional power grids and low-carbon alternatives as some of the key elements in decarbonising Singapore's power sector, said Mr Law.
However, moving away from the current system, which is heavily reliant on natural gas, would be a huge challenge, he added, as it would require transformational changes across the entire value chain.
Solar power, for example, is the most promising energy source but is hard to scale up given Singapore's scarcity of land, said Mr Law.
Miss Avani Garg, a senior financial analyst at Wartsila, said pressure from stakeholders to invest in cleaner sources of energy would make the energy transition easier, particularly for consumers.
She cited the example of Vietnam, which has received nearly US$20 billion (S$27 billion) of investment in solar power over the past two years, and where solar power is the cheapest source of energy available.
Miss Garg said: "We see renewables getting cheap and people then start investing in those renewables.