SINGAPORE - Local utility company Senoko Energy is reported to have requested aid from the Government as it rides out a supply glut expected to continue for a few more years.

Nikkei Asian Review reported that it has asked to borrow between $100 million and $200 million from the Government.

It is also lobbying for the Government to create a system that guarantees a revenue stream under long-term contracts, regardless of power plant utilisation.

"With the severe business outlook for the next year or two creating the risk of a shortage of operating capital, the utility is battening down the hatches," an official at Japanese trading house Marubeni reportedly said.

Senoko, which has been operating since 1977, has three subsidiaries - Senoko Energy Supply, Senoko Services and Senoko Gas Supply.

The company was bought in 2008 by Marubeni, Kansai Electric Power, Kyushu Electric Power, Japan Bank for International Cooperation and French company GDF Suez, now Engie.

The report said it slipped into the red in 2016, and its net loss widened to about $400 million in 2018.

Singapore is facing overcapacity in its power generation market, as the peak supply capacity is now believed to be double its peak demand. Proceeds from electricity sales are not enough to cover costs of fuel, maintenance and financing.

Asked about the current supply glut, a spokesman with the Energy Market Authority told Nikkei Asian Review that power companies made their investment decisions based on bullish projections for electricity demand growth that did not materialise.

"Flexibility was provided for power generation companies to retire their steam plants," the official added.

"While the power generation market is currently experiencing a situation of having more supply than demand, this looks to be changing as electricity demand is increasing with more data centres coming onstream, as well as older and inefficient generating units being decommissioned."