Green Energy Imports: The Key to Singapore’s Net Zero Target?

Marcus Cheong and Justin Chua
2 days ago
7 min read

Updated: 5 minutes ago

In this Explainer, find out...

Why is Singapore focussing on importing green energy?
What measures has Singapore taken to promote green energy imports, and what deals have been secured thus far?
What are the advantages and potential challenges from Singapore’s focus on green energy imports?

Introduction

How do you transition to green energy with little space for solar or wind farms, no rivers large or fast enough for hydropower, and with energy sources like hydrogen far from commercial viability?

Imports, says Singapore. Confronted with the accelerating impacts of climate change, Singapore has committed to achieving net-zero emissions by 2050. With electricity comprising 40 per cent of Singapore’s total greenhouse gas emissions, decarbonising Singapore’s energy sector is key to achieving this target. Green energy imports, in turn, have emerged as a central pillar of Singapore’s energy transition strategy. This Policy Explainer will explore the rationale and mechanisms behind Singapore’s green energy import strategy, along with its potential advantages and drawbacks.

Why Import?

Overview of Singapore’s Energy Mix

Currently, Singapore relies on three main sources of energy. As of 2024, 94% of Singapore’s electricity is produced by natural gas. Natural gas is imported either via pipelines from Malaysia and Indonesia, or via liquified natural gas (LNG) shipments from various global suppliers such as Qatar and Australia.

The remaining electricity is produced by a mixture of solar power, coal, biomass, and energy imports. Currently, government agencies like the Energy Market Authority (EMA) and Economic Development Board (EDB) are also focused on investing in other forms of low carbon energy technology such as hydrogen and geothermal energy, so as to develop a reliable fourth energy source.

Increasing energy imports has become a key tenet of Singapore’s energy strategy. To this end, the EMA has conducted various deals with many different companies from different countries to import green energy. These countries include Malaysia, Indonesia, Cambodia, Vietnam and Australia, reflecting the diversity of countries that Singapore is seeking to conduct green energy import deals with.

Importance of Importing Green Energy

Singapore aims to decarbonise its energy sector to meet its climate goals. Aiming to hit net zero emissions by 2050, it has to reduce its reliance on imported natural gas to produce electricity. Thus, Singapore would need to transition to greener energy sources, which includes green energy imports.

However, Singapore is unable to generate enough renewables domestically due to a lack of natural resources. This makes it difficult for Singapore to produce renewable energy. For instance, Singapore sits on the equator, making it hard to generate sufficient wind speeds that will make wind farms viable. Furthermore, Singapore has a limited amount of land, making solar energy production difficult on a large scale due to competing land uses.

Comparatively, other countries in the Asia-Pacific region boast the natural resources required to produce green energy at a larger scale. Hydropower from the Mekong has provided a clean, reliable source of electricity for Laos and Cambodia, while Australia’s vast land space in the outback provides it with massive solar potential. Thus, it is more viable for Singapore to decarbonise by importing clean electricity from neighbouring countries which do have land and resources.

Moreover, though Singapore is investing in various technologies to produce green energy, such as hydrogen and geothermal energy, these are still in the nascent stages of development. Other green energy production methods such as nuclear power also face safety, logistics, and public approval concerns. Thus, there is still a lot of research and development (R&D) that needs to be done before such technology becomes commercially and technically viable.

For these reasons, Singapore has focused on importing green energy to achieve its emission targets, and ensure a reliable source of electricity for its needs.

Promoting Green Energy Imports

Noteworthy Deals Secured by Singapore

Given Singapore’s relatively high energy prices compared to neighbouring countries, developers have been interested in exporting renewable energy to the city-state. Singapore has awarded conditional approvals to 11 projects, which will import low carbon electricity from countries like Cambodia, Indonesia, Malaysia and Vietnam (Figure 1).

For example, Singapore has authorised the importing of 1.2 GW of low carbon electricity from Vietnam to Singapore, and the importing of 1 GW of hydropower from Sarawak, Malaysia.

Figure 1: Singapore’s sources of electricity imports

Another key project is the plan by Sun Cable to import 1.75 GW of low carbon electricity from Australia to Singapore via a 4300 km subsea cable, which has also obtained conditional approval.

How are the Energy Import Deals Evaluated?

Before taking up an import deal, Singapore will assess the deal’s logistical feasibility and commercial viability (Figure 2).

This process can be broken down into 3 main stages.

In the first stage, participating companies submit a proposal which EMA will then review. Afterwards, EMA may grant a conditional approval if it assesses the proposal to be technically and commercially viable.

At the second stage, EMA may grant a conditional license once participants meet the conditions set out in the conditional approval. These conditions include conducting further studies and engaging relevant stakeholders.

Finally, after further ratification of a participant's proposals, EMA may then grant an importer license, allowing participating companies to import electricity. After further construction and testing, the participating company will then begin to import electricity.

Figure 2: Stages that proposals go through before being granted approval

The aforementioned projects are in their nascent stages. Some of these projects have been awarded conditional licenses, while others have been awarded conditional approvals. Thus, further proposals and stages are required to ensure all details are ratified before the official green light is provided for the project to get kickstarted.

Diplomacy’s Role

Diplomacy plays a crucial role in helping Singapore increase its green energy imports and achieve its target of net zero carbon emissions by 2050.

Diplomacy has proven to be especially important as plans for a more ambitious ASEAN Power Grid is pursued. By entering energy import deals with fellow ASEAN countries, Singapore is laying the groundwork for a joint electricity grid to be developed. This joint electricity grid is a plan to connect all Southeast Asian countries’ electricity grids so power can flow across borders and ensure energy security. The Lao PDR-Thailand- Malaysia-Singapore Power Integration Project (LTMS-PIP) exemplifies how ASEAN countries facilitate cross-border green energy imports. Such ASEAN-based co-operation is critical as proximity gives ASEAN partners a natural advantage as energy suppliers.

Advantages of Green Energy Imports

Cost effectiveness

First, costs of renewable energy are falling rapidly. In neighbouring countries like the Philippines and Malaysia, the cost of solar energy has already fallen below that of traditional gas. In 2023, Malaysian green energy cost US$0.029 per kWh, lower than Malaysian fossil fuel energy costs of US$0.063 per kWh, and far lower than Singapore’s energy costs of US$0.160 (S$0.215) per kWh. At the same time, green energy imports may also mitigate exposure to global energy price volatility. Thus, greening the energy sector may be driven not only by sustainability but also economic concerns.

Regional Co-operation

Second, expanding energy imports into Singapore can improve trade and economic ties between Singapore and its neighbours. The potential gains from trade are substantial. Singapore can benefit from securing green energy, and neighbouring countries can enjoy increased exports.

This potential is already evident in projects such as the aforementioned LTMS-PIP initiative, which has progressed smoothly. In 2024, Singapore agreed to double energy import capacity under the project, signalling the role of cross-border energy trade in deepening regional economic integration.

More broadly, these imports may also facilitate the development of the ASEAN power grid, as discussed above. Such a grid may provide immense opportunities for boosting ASEAN’s economic development, through both investment-driven construction demand and widespread energy trade. A US-Singapore feasibility study on regional energy conductivity, for example, found that this grid could stimulate S$2.6 billion in annual R&D investments, create 9,000 jobs and raise ASEAN member countries’ GDP by 0.8-4.6 per cent.

Potential Challenges

Nevertheless, several potential challenges could arise with increased green energy importation.

Security Concerns

First, while strengthened economic integration can generate gains from trade (see “Regional Co-operation” section), it also raises some concerns. Relying on imports from other countries risks supply disruptions if relations with trade partners sour, or if trade partners face domestic instability. This concern is especially important for essential goods such as electricity.

This concern has been realised in the past. For example, Malaysia banned renewable energy exports in 2021, only lifting the ban in 2023. Though the relatively small scale of green energy exports to Singapore before the ban limited the negative shocks it caused, this experience illustrates that relying on imports may leave Singapore highly vulnerable to external shocks.

To address the above issue, there may be a need for Singapore to further diversify its energy supply to reduce disruption risk from any one country.

Infrastructure Requirements

Second, green energy imports will require significant infrastructural developments, such as transmission lines, to connect different countries’ electricity grids. These costs are large. The Asian Development Bank estimates that the ASEAN power grid will require transmission infrastructure worth at least US$100 billion. Other generation and distribution costs could bring the total to US$764 billion.

Private investors and firms have thus far exhibited little enthusiasm for grid infrastructure projects. This caution stems from the risks of high upfront costs, long timelines, and the political risks associated with cross-border projects. More broadly, Southeast Asia also suffers from a green investment gap of S$272 billion annually. Hence, the onus falls on governments like Singapore to continually promote or finance grid investments.

Harmonisation of Regulatory Standards

Third, another key concern is the need for Singapore to co-operate with energy partners to harmonise energy codes and standards. One key standard that is being developed is the Renewable Energy Certificate (REC). The REC allows companies to prove that the electricity they consume has been generated from renewable energy sources.

However, regulatory standards for RECs continue to differ between ASEAN members. This lack of harmonisation makes it difficult to verify if imported energy labelled as “renewable” truly aligns with Singapore’s renewable energy standards. Though Singapore has developed a draft framework for harmonising these standards, implementing this framework must involve negotiations with other ASEAN members. If negotiations do not proceed smoothly, Singapore’s pursuit of green energy imports may be delayed indefinitely.

Conclusion

Though green energy imports require significant infrastructure and have potential risks, Singapore’s domestic constraints leave it with few other choices. Indeed, Dr Tan See Leng, Minister-in-Charge of Energy and Science & Technology, has lauded energy imports as having the “most promise” for Singapore. Importing energy hence remains a key pillar of Singapore’s decarbonisation efforts, at least in the medium term, while nascent energy sources are being explored and developed.

This Policy Explainer was written by members of MAJU. MAJU is a ground-up, fully youth-led organisation dedicated to empowering Singaporean youths in policy discourse and co-creation.

By promoting constructive dialogue and serving as a bridge between youths and the Government, we hope to drive the keMAJUan (progress!) of Singapore.