EMA removes ‘hard cap’ on solar energy supply

Siau Ming En Today Online 21 Jul 14;

SINGAPORE — Nearly a year after the Energy Market Authority (EMA) announced plans to raise the cap for more power to be generated from intermittent generation sources, it has decided to make further tweaks to the arrangement to encourage the growth of solar energy generation here.

In a determination paper released earlier this month, the EMA said it would remove the present “hard cap” of 600 megawatt-peak (MWp) of solar energy that can be supplied to the grid. Instead, it would introduce a “dynamic pathway” approach, where more solar power can be stored in reserve — and supplied to the grid — if more is generated.

Intermittent generation sources are those whose output depends on environmental factors and weather conditions, such as solar and wind energy. At present, the only intermittent generation source connected to the national grid is solar power.

Reserve power from conventional generation sources, such as gas-fired power plants, is needed to manage intermittency — such as cloud cover, which can cause a drop in solar output — and ensure grid stability.

At the Singapore International Energy Week held last October, Second Minister for Trade and Industry S Iswaran launched a consultation paper to seek views on the proposed changes to the rules governing intermittent generation sources, such as to allow these sources to supply more power to the grid.

During the consultation exercise, the EMA received feedback that while raising the hard cap is a straightforward approach towards allowing intermittent generation sources to supply more power to the grid, the cap will also restrict the growth of solar energy in Singapore.

“Under (the new) approach, there is no hard cap on the amount of installed solar capacity in Singapore. If necessary, additional reserves capacity can be procured to back up a higher amount of solar capacity beyond 600MWp,” said the EMA.

Commenting on the move, Mr Shawn Tan, business development manager at solar-system developer Sunseap Leasing, told TODAY that while this approach means there will be an increased capacity for companies to take on more solar photovoltaic projects, it could also bring additional costs for them.

As more reserve capacity is needed to back up the potential increase in solar energy, Mr Tan said companies might now need to bear some of these costs, which could eventually affect the returns on installing a solar photovoltaic system.

Similarly, smaller contestable consumers — those with systems that are less than 1MWac — who install intermittent generation sources to offset on-site consumption will also find it easier to be paid for supplying excess electricity that they sell to the national grid. Contestable consumers are those who buy electricity from other service providers, instead of SP Services.

Players in the solar industry also noted that the present market-registration process — which requires them to register with the Energy Market Company to receive payments for excess electricity sold into the grid — is onerous. A new scheme, to be implemented between January and March next year, will allow consumers to be paid the energy cost of the electricity they export into the grid — currently 25.68 cents per kWh — through SP Services without going through the existing registration process.

Mr Christophe Inglin, managing director of Phoenix Solar, said this new pricing scheme would benefit customers, such as schools and non-air-conditioned warehouses, who shut down their operations on Sundays and public holidays.