242 G. JINDAL ET AL.
housing agency spearheading the installation of PV systems on public
housing, Singapore looks set to achieve its target of 350 MW installed
capacity by 2020. However, despite the accelerated development of PV
systems in Singapore under the SolarNova program and increasingly
simplified net-metering rules, the sector faces several challenges to further
expansion.
These challenges include unfavorable market conditions, such as low
and volatile electricity prices and a small-sized yet fragmented domestic
market. These are further exacerbated by high interest rates on financing
and limited access to debt financing. Singapore has maintained a policy of
neutral market pricing of energy by not favoring any fuel or energy technology. This is unlikely to change. The leasing model is likely to remain
the main business model for the PV industry in Singapore. Thus, PV
developers will have to bring in innovative strategies to carve out a unique
competitive advantage. These could include models such as off-site leasing
and marketing of green energy at a premium to environmentally conscious
consumers.
At the same time, from the regulator’s perspective, integration of
intermittent PV at a rapid pace presents a potential threat to the grid
stability. To maintain a high degree of reliability in the electricity supply,
Singapore has had to take a guarded approach toward integrating solar
PV into its electrical grid. To accommodate a higher percentage of
intermittent PV generation, Singapore’s electricity market will need to
incorporate changes to its design in line with international best practices. Additionally, continued efforts toward improving solar forecasting,
interconnecting its power system with that of neighboring countries and
development of energy storage will be vital for overcoming this challenge.
Notes
1. The Reserve Margin is defined as the amount by which the total generation
capacity exceeds the annual electricity peak demand, to cater to scheduled
maintenance as well as forced outages of generating units in the power
system. In Singapore, the minimum reserve margin to maintain system
security is currently set at 30%.
2. SP PowerAssets Ltd. and SP PowerGrid Ltd. are subsidiaries of Singapore
Power Ltd, which in turn is a subsidiary of Temasek Holdings (Private)
Limited, a holding company owned by the Singapore government.
housing agency spearheading the installation of PV systems on public
housing, Singapore looks set to achieve its target of 350 MW installed
capacity by 2020. However, despite the accelerated development of PV
systems in Singapore under the SolarNova program and increasingly
simplified net-metering rules, the sector faces several challenges to further
expansion.
These challenges include unfavorable market conditions, such as low
and volatile electricity prices and a small-sized yet fragmented domestic
market. These are further exacerbated by high interest rates on financing
and limited access to debt financing. Singapore has maintained a policy of
neutral market pricing of energy by not favoring any fuel or energy technology. This is unlikely to change. The leasing model is likely to remain
the main business model for the PV industry in Singapore. Thus, PV
developers will have to bring in innovative strategies to carve out a unique
competitive advantage. These could include models such as off-site leasing
and marketing of green energy at a premium to environmentally conscious
consumers.
At the same time, from the regulator’s perspective, integration of
intermittent PV at a rapid pace presents a potential threat to the grid
stability. To maintain a high degree of reliability in the electricity supply,
Singapore has had to take a guarded approach toward integrating solar
PV into its electrical grid. To accommodate a higher percentage of
intermittent PV generation, Singapore’s electricity market will need to
incorporate changes to its design in line with international best practices. Additionally, continued efforts toward improving solar forecasting,
interconnecting its power system with that of neighboring countries and
development of energy storage will be vital for overcoming this challenge.
Notes
1. The Reserve Margin is defined as the amount by which the total generation
capacity exceeds the annual electricity peak demand, to cater to scheduled
maintenance as well as forced outages of generating units in the power
system. In Singapore, the minimum reserve margin to maintain system
security is currently set at 30%.
2. SP PowerAssets Ltd. and SP PowerGrid Ltd. are subsidiaries of Singapore
Power Ltd, which in turn is a subsidiary of Temasek Holdings (Private)
Limited, a holding company owned by the Singapore government.