Singapore’s Power Spikes Are the Cost of Clinging to the Past

  • Date: 16-Dec-2021
  • Source: Asharq AL-awsat
  • Sector:Oil & Gas
  • Country:Gulf
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Singapore’s Power Spikes Are the Cost of Clinging to the Past

Think the cost of electricity in Europe — where fuel shortages and the approach of winter recently drove prices over $200 per megawatt-hour — is crazy? You should check out Singapore.

The city-state has seen wholesale prices rising as high as S$2,947 ($2,184)/MWh in October and $1,121/MWh last month. Those levels aren’t even particularly unusual in Singapore’s highly liberalized power market, where costs spike whenever supply and demand fall out of alignment:

While most households pay the fixed government tariff of S$241/MWh, a few that have signed up to prices linked to the wholesale market have been spending extraordinary amounts. At October’s peak, it would cost $5 or more to run a typical oven for an hour.

In Europe and China, the volatile price of grid energy in recent months has often been presented as an outcome of decarbonization.

That’s clearly not what’s happening in Singapore, one of the most intensively fossil-fired economies on the planet. Around 95% of electricity is provided by gas turbines, with coal and fuel oil making up another 2% or so. Waste incinerators account for a substantial slice of the remainder, leaving renewable solar and biomass with just 1% or so of generation, next to 47% in Germany