Singapore: Challenges and New Momentum in the Energy Transition

The city-state is currently pursuing ambitious climate targets and strategies under the “Singapore Green Plan,” which also includes a so-called “Energy Reset.” The target is the cross-sector deployment of clean energy sources. Singapore is around 95% dependent on imported fossil energy sources. This import dependence makes the energy supply costly and vulnerable to crises. As a result, diversification through renewable energy and storage technologies is becoming increasingly strategically important for the state.

Challenges for Alternative Energy Sources

Several factors pose key hurdles to expanding renewable energy in the city-state. Singapore’s small size (734 square kilometers), geographically driven conditions including resource scarcity, as well as high population density and limited land availability, constrain the potential for more sustainable energy sources. As a result, the safe use of nuclear power or realizing the potential of domestic biomass is practically not feasible. Without geothermal energy sources, there is likewise no possibility of deploying geothermal systems. Singapore’s small tidal range limits the possibilities for commercial tidal power generation. A large share of the sea area is used for ports, anchorages, and shipping lanes, which restricts the use of offshore technologies. Hydropower potential also cannot be utilized, as Singapore has no river system with fast-flowing water year-round. Singapore’s geographic location also poses a challenge for commercial wind turbines. While commercial wind turbines operate at wind speeds above 4.5 m/s, Singapore’s average wind speed is only about 2 m/s.

Singapore’s Electricity Mix

Source: Singapore: Energy Country Profile – Our World in Data

Singapore still meets its energy supply predominantly through fossil, imported energy sources. Around 95% of the energy mix is accounted for by liquefied natural gas (LNG) and oil, leaving the city-state highly dependent on international supply chains. The contribution of renewable energy has so far been low: only about 3% of electricity production currently comes from renewable sources, almost exclusively photovoltaics. Singapore is located near the equator and has relatively high solar irradiation of 1,580 kWh/m²/year. By comparison, in Germany this is around 1,100 kWh/m². In recent years, Singapore has seen remarkable momentum in solar expansion. Installed capacity increased almost eightfold from around 125 MW in 2015 to just under 950 MW by the end of 2023. The government has set itself the target of reaching a capacity of at least 2 GWp by 2030 to meet the annual electricity demand of around 350,000 households and represent about 10% of today’s peak demand. Real-time information on solar power generated in Singapore can be found on the Solar Irradiance Map on the Energy Market Authority (EMA) website.

To overcome limited land availability, Singapore is relying on innovative policies such as floating solar installations (e.g., at the Tengeh Reservoir), solar rooftops on industrial buildings, schools, and warehouses, as well as solar carports across the city. To offset the natural fluctuations in electricity generation from solar power and ensure grid stability, Singapore is focusing on large energy storage systems (ESS). A key milestone was the commissioning of an ESS on Jurong Island in February 2023. With a capacity of 285 megawatt-hours, it is among the largest projects of its kind in Southeast Asia.

Regional Cooperation and New Technologies

A key pillar of Singapore’s future energy supply lies in regional exchange. By 2035, the government plans to cover around 4 GW of electricity through green energy imports—equivalent to about 30% of national demand. Relevant projects with Malaysia, Indonesia, Laos, and Australia are already under development. In the long term, Singapore is pursuing the vision of a Southeast Asian power interconnection (“ASEAN Power Grid”) that uses renewable energy sources where they can be generated efficiently and enables cross-border trade.

In parallel, green hydrogen is increasingly moving into strategic focus. Even though the market is still in an early pilot phase, Singapore aims to take on a key role as an import, processing, and distribution hub—both for industry and the transport sector, and as a seasonal energy storage option. Initial initiatives are already underway: demonstration projects for hydrogen mobility as well as “power-to-gas” infrastructures on Jurong Island mark the technological testing phase.

This transformation process is supported by national CO2 pricing, introduced in 2019 as the first of its kind in Southeast Asia. The introductory rate was SGD 5 per tonne of CO2, but was increased in 2024 to SGD 25 (around EUR 17) and is set to rise to SGD 50 to 80 by 2030. Around 80% of national emissions are covered, primarily from industrial facilities emitting more than 25,000 tonnes of CO2 per year. The tax revenues flow into climate-relevant support programs and thus also directly serve to finance the energy transition.

Conclusion

Singapore faces significant structural challenges in the energy transition. Nevertheless, the city-state is pursuing ambitious climate targets and is deliberately relying on technological innovation, regional cooperation, and market-based instruments such as CO2 pricing. Solar power in particular, complemented by storage systems, currently represents the central lever for diversifying the energy mix. In addition, green electricity imports and hydrogen projects open up new long-term prospects for a more sustainable supply. In this way, the city-state demonstrates that, despite complex framework conditions, it consistently develops strategies to align its own energy supply for the future and in a climate-compatible manner in line with the “Singapore Green Plan.”

From the Newsletter “E|News: Renewable Energy”