Key Developments

Singapore recently established a government-linked company called Singapore Energy Interconnections (SGEI) in April to oversee the development of electricity interconnectors between countries, with a target of importing 6 gigawatts of electricity by 2035 – approximately one-third of the country’s energy needs at that time.

The Financing Challenge

The article highlights a critical bottleneck that SGEI aims to address. There is currently a low appetite among financial institutions to fund such infrastructure, mainly due to the perceived high risks and significant upfront costs. This has been a significant obstacle to developing the cross-border electricity transmission infrastructure necessary to import clean energy from regional sources, such as solar farms in Indonesia.

SGEI’s Strategic Role

SGEI’s role is to invest in, develop, own, and operate interconnectors for importing electricity. It has already announced its first deal to develop a new subsea electricity cable between Indonesia and Singapore. The government’s backing is expected to increase investor confidence and attract new funding for these complex infrastructure projects.

Regional Grid Progress

The broader ASEAN power grid concept, first proposed in 1997, has gained momentum recently. Singapore began importing up to 100 MW of hydropower from Laos via existing interconnectors between Laos, Thailand, Malaysia, and Singapore in 2022. This pilot project demonstrates the feasibility of cross-border electricity trade.

Strategic Importance

This initiative is crucial for Singapore’s decarbonization goals, as the Republic currently relies on natural gas for approximately 95 per cent of its electricity, and reducing emissions from the power sector is critical to meeting its net-zero emissions goal by mid-century.

Singapore’s Clean Energy Revolution: Strategy, Development, and Vision

Executive Summary

Singapore’s clean energy import strategy represents one of the most ambitious and sophisticated energy transition plans globally, addressing the unique challenges of a small island nation with limited renewable resources. This comprehensive analysis examines the multi-faceted approach Singapore is taking to become a regional clean energy hub while achieving its net-zero goals by mid-century.

Part I: Strategic Architecture of Singapore’s Clean Energy Import Strategy

The Foundational Challenge

Singapore’s energy landscape presents a paradox: a technologically advanced economy with sophisticated infrastructure, yet constrained by geographical limitations that render domestic renewable energy generation insufficient to meet its needs. With only 728 square kilometres of land area and consistently high energy demand density, Singapore faces what energy economists call the “small island state energy trilemma” – balancing energy security, sustainability, and affordability within severe resource constraints.

The current energy profile starkly illustrates this challenge:

95% dependence on natural gas for electricity generation
Limited solar potential due to land constraints and tropical weather patterns
No viable wind, hydroelectric, or geothermal resources
A high energy intensity economy requires reliable baseload power

Strategic Pillars of the Import Strategy

1. Diversified Import Portfolio Strategy

Singapore’s approach involves creating a diversified portfolio of clean energy imports from multiple countries and sources:

Geographic Diversification:

Indonesia: Vast solar and geothermal potential, particularly in Sumatra and Java
Malaysia: Hydroelectric and solar resources, existing interconnection infrastructure
Laos: Abundant hydroelectric resources, already supplying 100MW via existing interconnectors
Vietnam: Growing solar and wind capacity, coastal wind potential
Cambodia: Emerging hydroelectric and solar development
Australia: Long-term potential for green hydrogen imports

Technology Diversification:

Hydroelectric power for reliable baseload
Solar photovoltaic for daytime peak demand
Offshore wind (future potential)
Green hydrogen for long-term storage and industrial applications
Biomass and waste-to-energy from regional agricultural resources

2. Infrastructure Development Strategy

The physical infrastructure required for Singapore’s clean energy imports represents one of the most complex engineering challenges in Southeast Asia:

Subsea Cable Networks: Singapore’s island geography necessitates the development of sophisticated underwater transmission infrastructure. The technical specifications include:

High Voltage Direct Current (HVDC) transmission to minimise losses over long distances
Advanced power electronics for AC-DC-AC conversion
Submarine cable laying in challenging tropical marine environments
Grid synchronisation across different national power systems

Grid Integration and Smart Grid Development:

Advanced grid management systems to handle variable renewable energy flows
Energy storage integration for load balancing
Demand response systems to optimise electricity consumption patterns
Microgrid development for enhanced resilience

3. Financial Architecture and Risk Management

Singapore’s approach to financing clean energy imports involves sophisticated risk management and financial structuring:

De-risking Mechanisms:

Government-backed entities like SGEI are to provide institutional credibility
Long-term power purchase agreements to guarantee revenue streams
Political risk insurance for cross-border projects
Currency hedging for multi-national transactions

Blended Finance Structures:

Combination of public and private funding
Development finance institution participation
Green bonds for infrastructure financing
Carbon credit mechanisms to improve project economics

Regional Market Development Strategy

Creating Demand Signals

Singapore’s commitment to import 6GW by 2035 creates a substantial and credible demand signal that transforms the investment landscape for renewable energy development across Southeast Asia. This demand commitment:

Provides revenue certainty for large-scale renewable projects
Attracts international developers and financiers to the region
Creates competitive dynamics among supplier countries
Establishes Singapore as an anchor customer for regional clean energy development

Technology Transfer and Capacity Building

Singapore’s strategy includes significant technology transfer and capacity-building components:

Technical assistance for grid integration in supplier countries
Training programs for renewable energy project development
Standards harmonisation across the region
Knowledge sharing on best practices in clean energy development

Part II: Domestic Clean Energy Development Potential

Maximising Limited Domestic Resources

Despite constraints, Singapore has significant potential to optimise domestic clean energy generation:

Advanced Solar Integration

Rooftop Solar Optimisation:

Mandatory solar installation on new buildings above specificc size
Retrofitting existing buildings with advanced photovoltaic systems
Community solar programs for residential areas
Integration with building energy management systems

Floating Solar Development: Singapore’s reservoirs and coastal areas offer opportunities for floating solar installations:

Reduced land use conflicts
Improved panel efficiency due to the cooling effect of water
Dual use of water bodies
Integration with water management systems

Building-Integrated Photovoltaics (BIPV):

Solar panels integrated into building facades and windows
Transparent solar cells for office buildings
Solar canopies over parking areas and walkways
Integration with urban planning and architecture

Energy Storage and Grid Flexibility

Battery Energy Storage Systems (BESS):

Grid-scale battery installations for load balancing
Behind-the-meter storage for commercial and residential users
Virtual power plant aggregation of distributed storage
Integration with electric vehicle charging infrastructure

Pumped Hydro and Alternative Storage:

Artificial pumped hydro using urban elevation differences
Compressed air energy storage systems
Thermal energy storage for cooling applications
Power-to-gas systems for long-term energy storage

Waste-to-Energy and Circular Economy Integration

Singapore’s advanced waste management infrastructure provides opportunities for enhanced energy recovery:

Advanced incineration with improved energy recovery rates
Biogas production from organic waste
Industrial symbiosis for heat and power generation
Integration with circular economy principles

Green Hydrogen Development

Singapore is positioning itself as a regional green hydrogen hub:

Electrolysis facilities using imported renewable electricity
Hydrogen storage and distribution infrastructure
Industrial applications in refining and petrochemicals
Hydrogen fuel cell systems for backup power and transportation

Urban Energy Efficiency and Demand Management

Smart City Integration

Singapore’s innovative city initiatives create opportunities for enhanced energy efficiency:

Internet of Things (IoT) sensors for energy monitoring
Artificial intelligence for demand forecasting and optimisation
Digital twins for energy system modelling and g optimisation
Integrated urban planning for energy efficiency

District Energy Systems

District Cooling:

Centralised cooling systems for high-density urban areas
Integration with waste heat recovery
Thermal energy storage for load shifting
Seawater cooling systems

Combined Heat and Power (CHP):

Cogeneration systems for industrial areas
Waste heat recovery for space heating and hot water
Integration with district energy networks
Fuel cell systems for distributed generation

Part III: The Vision – A Story of Transformation

Pacific Energy Solutions: A Clean Energy Pioneer

This fictional narrative illustrates how Singapore’s clean energy strategy might unfold through the experience of an innovative energy company.

Chapter 1: The Catalyst

Dr. Sarah Chen stood at the floor-to-ceiling windows of her 32nd-floor office in Marina Bay, watching the morning sun reflect off the solar panels that now covered nearly every rooftop in Singapore’s central business district. As CEO of Pacific Energy Solutions (PES), she had witnessed and helped orchestrate one of the most dramatic energy transformations in modern history.

It was 2029, four years since the company’s founding, and Singapore was on track to exceed its ambitious target of importing 6 gigawatts of clean electricity by 2035. PES had played a crucial role in this transformation, becoming the region’s premier clean energy development and trading company.

The company’s origin story began in 2025, when Sarah, then a senior energy analyst at Singapore’s Energy Market Authority, recognised that the government’s newly established Singapore Energy Interconnections (SGEI) created an unprecedented opportunity for private sector innovation. While SGEI focused on large-scale infrastructure development, a gap existed in the market for companies that could develop, aggregate, and optimise clean energy resources across the region.

Chapter 2: Building the Foundation

Sarah’s vision for PES was ambitious: create a vertically integrated clean energy company that could develop renewable projects across Southeast Asia, aggregate power from multiple sources, and deliver optimised clean energy solutions to Singapore and other regional customers. The company’s business model was built on three pillars:

Project Development: Identify, develop, and operate renewable energy projects across the region
Energy Trading: Aggregate power from multiple sources and optimise delivery to customers
Technology Innovation: Develop advanced grid integration and energy storage solutions

The company’s first significant break came through a partnership with SGEI to develop a 500-megawatt solar farm in East Java, Indonesia. The project, located on degraded agricultural land, would be connected to Singapore via a new subsea cable. But PES didn’t just develop the solar farm – they created an integrated ecosystem that included:

Advanced weather forecasting systems to predict solar generation
Battery energy storage to smooth output variations
Grid integration technology to optimise power delivery
Community development programs to benefit local residents

Chapter 3: Innovation and Integration

By 2027, PES had established a reputation for its innovative approach to clean energy development. The company’s breakthrough came with the development of what they called “Smart Energy Hubs” – integrated facilities that combined multiple renewable energy sources with advanced storage and grid management systems.

The first Smart Energy Hub was built in partnership with the Malaysian government in Johor, just across the causeway from Singapore. The facility included:

300 MW of solar photovoltaic capacity
150 MW of battery energy storage
A green hydrogen production facility
Advanced grid integration and optimisation systems
A regional control centre for managing multiple projects

The hub’s sophisticated control systems, powered by artificial intelligence and machine learning, can predict energy demand patterns, optimise generation across multiple renewable sources, and automatically adjust power flows to maximise efficiency and minimise costs.

Chapter 4: Regional Expansion

Sarah stood in the control room of PES’s regional headquarters, watching dozens of screens displaying real-time data from renewable energy projects across Southeast Asia. The company now operated or had stakes in:

15 solar farms across Indonesia, Malaysia, and Vietnam
5 hydroelectric projects in Laos and Cambodia
3 offshore wind developments (a technology that had finally become viable in tropical waters)
8 Smart Energy Hubs providing integrated clean energy services
The region’s largest green hydrogen production and distribution network

The company’s success wasn’t just measured in megawatts or profits, but in the transformation it had helped catalyse across the region. PES’s projects had:

Created over 10,000 jobs in rural communities
Provided reliable electricity access to previously underserved areas
Transferred advanced technology and skills to local partners
Contributed to a 40% reduction in Southeast Asia’s power sector emissions

Chapter 5: The Network Effect

What made PES truly innovative wasn’t just its individual projects, but how they worked together as an integrated network. The company had pioneered what energy economists called “virtual power plant aggregation” across multiple countries.

Using advanced forecasting and optimisation algorithms, PES could predict when solar generation would be high in Indonesia, hydroelectric output would peak in Laos, or demand would surge in Singapore. The company’s trading desk, staffed by former financial traders and energy engineers, can then optimise power flows across the entire network to minimise costs and maximise reliability.

The system was so sophisticated that it could automatically respond to weather patterns, adjusting power flows in real-time as clouds moved across solar farms or seasonal rains affected hydroelectric generation. During the 2028 drought that affected much of mainland Southeast Asia, PES’s diversified portfolio and intelligent grid management prevented power shortages that could have affected millions of people.

Chapter 6: The Hydrogen Revolution

By 2029, PES had become the region’s largest producer and distributor of green hydrogen, a development that opened entirely new markets and applications. The company’s hydrogen business included:

Industrial Applications:

Supplying green hydrogen to Singapore’s petrochemical refineries
Providing clean fuel for steel production in Indonesia
Supporting ammonia production for fertiliser manufacturing

Transportation:

Hydrogen fuel cell systems for long-haul trucking
Marine fuel for shipping (a rapidly growing market as international shipping regulations tightened)
Backup power systems for critical infrastructure

Energy Storage:

Power-to-gas systems that convert excess renewable electricity to hydrogen
Hydrogen fuel cells for long-duration energy storage
Seasonal energy storage to manage renewable variability

Chapter 7: The Smart City Integration

Sarah’s most recent project was perhaps the most ambitious yet: integrating PES’s regional clean energy network with Singapore’s smart city infrastructure. The project, known as “CityGrid 2030,” aimed to develop the world’s most advanced urban energy management system.

The system would:

Automatically optimise energy consumption across all city systems
Predict and respond to demand patterns using AI and IoT sensors
Integrate electric vehicle charging with grid management
Coordinate building energy systems with renewable energy generation
Provide real-time energy pricing and optimisation recommendations to residents and businesses

The first phase, covering Marina Bay and the central business district, was already showing remarkable results. Energy consumption had dropped by 25% while comfort and service levels improved. The system was so advanced that it could predict when office workers would arrive at their buildings and pre-cool the spaces using excess solar power generated during the night by the company’s Indonesian solar farms.

Chapter 8: Challenges and Resilience

The path to success hadn’t been without challenges. PES had faced:

Technical Challenges:

Grid integration complexities across multiple countries with different standards
Weather-related disruptions affecting renewable generation
Cybersecurity threats to interconnected energy systems
Technology reliability issues with cutting-edge equipment

Political and Regulatory Challenges:

Changing government policies affecting cross-border energy trade
Regulatory disputes between countries over pricing and standards
Environmental concerns about subsea cable installations
Local community resistance to some renewable energy projects

Financial Challenges:

Currency fluctuations affecting multi-country operations
Changing commodity prices are affecting project economics
Competition from other clean energy developers
Technology cost reductions are making older projects less competitive

But the company’s diversified portfolio and sophisticated risk management systems had allowed it to weather these challenges while continuing to grow and innovate.

Chapter 9: The Transformation

Standing in her office five years after founding PES, Sarah reflected on the broader transformation the company had helped catalyse. Singapore now imports 45% of its electricity from clean sources – ahead of the original 2035 target. The country had become the region’s hub for energy trading, with dozens of companies following PES’s model.

But perhaps more importantly, the success of Singapore’s clean energy import strategy had inspired similar initiatives around the world. Small island states in the Caribbean and Pacific were developing their own regional energy trading networks. Mediterranean countries were exploring cross-border renewable energy projects. Even larger countries were recognising the benefits of regional energy integration.

The technology developed and deployed by companies like PES has also had broader impacts:

Advanced grid integration systems were being used in developed countries to manage higher renewable energy penetration
Innovative energy hub concepts were being replicated in urban areas worldwide
Green hydrogen production and distribution technologies were scaling globally
Cross-border energy trading platforms were facilitating international clean energy commerce

Chapter 10: The Future Vision

As Sarah prepared for PES’s board meeting, she reviewed the company’s plans for the next decade. The goals were as ambitious as ever:

Expansion Plans:

Develop 10 GW of renewable capacity across Southeast Asia by 2035
Establish the region’s first fully integrated green hydrogen economy
Expand operations to include energy storage services and grid optimisation in developed markets
Pioneer floating solar and offshore wind development in tropical waters

Technology Innovation:

Advanced AI systems for managing increasingly complex energy networks
Next-generation energy storage technologies, including flow batteries and compressed air systems
Carbon capture utilisation integrated with renewable energy systems
Fusion energy integration (still experimental but promising)

Sustainability Impact:

Help Southeast Asia achieve 70% renewable electricity by 2040
Support rural development through distributed renewable energy projects
Contribute to global climate goals through technology transfer and capacity building
Develop circular economy approaches to energy infrastructure

Sarah smiled as she looked out at the transformed Singapore skyline. Solar panels and green rooftops covered nearly every building. Electric vehicles moved silently through the streets, charged by clean electricity from across the region. The port, once a hub for fossil fuel imports, now handles green hydrogen shipments and hosted floating solar installations.

But the fundamental transformation wasn’t visible in the skyline – it was in the fundamental reimagining of how energy systems could work. Singapore has proven that small countries can achieve energy security and sustainability through regional cooperation and technological innovation. PES and companies like it have shown that private sector innovation could accelerate and optimise government-led initiatives.

Epilogue: The Model Goes Global

The success of Singapore’s clean energy import strategy and companies like PES had implications far beyond Southeast Asia. The model was being studied and replicated around the world:

The European Union expanded its renewable energy sharing mechanisms based on Singapore’s cross-border trading experience
Caribbean islands developed a regional clean energy network using similar institutional and financing structures
African countries created a cross-border renewable energy project modelled on Singapore’s approach
International development agencies adopted the risk-sharing and blended finance mechanisms pioneered by SGEI

The story of Pacific Energy Solution illustrates how Singapore’s clean energy strategy has created opportunities not just for energy security and environmental sustainability, but also for economic transformation and regional leadership. By 2030, Singapore will have become not just a consumer of clean energy but a global centre for clean energy innovation, finance, and technology development.

The company’s success demonstrated that the transition to clean energy wasn’t just about replacing fossil fuels with renewables – it was about reimagining energy systems, creating new forms of regional cooperation, and developing technologies that could accelerate the global energy transition.

As Sarah often told investors and policymakers who visited PES headquarters, “We didn’t just import clean energy – we imported the future.”

Part IV: Strategic Implications and Global Lessons

Replicability and Scalability

Singapore’s clean energy import strategy offers valuable lessons for other countries and regions facing similar challenges:

For Small Island States

Regional cooperation can overcome domestic resource constraints
Government-backed institutions can de-risk private investment
Technology innovation can solve geographic and technical challenges
Economic diversification through clean energy hub development

For Developing Countries

Clean energy development can drive economic growth and job creation
Technology transfer and capacity building are essential components
Blended finance mechanisms can mobilise private capital
Regional integration can create economies of scale

For Developed Countries

Advanced economies can benefit from regional energy integration
Private sector innovation can complement government initiatives
Technology development has global applications and markets
Climate leadership can create competitive advantages

Future Evolution

The success of Singapore’s strategy points toward several future developments:

Technological Advancement

More efficient renewable energy technologies
Advanced energy storage and grid integration systems
Green hydrogen economy development
Smart city and IoT integration

Market Development

Regional energy trading platforms
Carbon markets and pricing mechanisms
Green finance and investment products
Technology commercialisation and export

Policy Innovation

International cooperation frameworks
Regulatory harmonisation across borders
Risk-sharing and guarantee mechanisms
Technology transfer and capacity building programs

Conclusion

Singapore’s clean energy import strategy represents a paradigm shift in how countries can approach energy security and sustainability. By combining ambitious targets with innovative institutions, sophisticated financing mechanisms, and regional cooperation, Singapore is demonstrating that small countries can lead global energy transformation.

The success of this strategy depends not just on government policy and infrastructure development, but on the innovation and entrepreneurship of companies that can turn policy vision into operational reality. The story of Pacific Energy Solutions illustrates how private sector innovation can accelerate and optimise government-led initiatives, creating value for investors while contributing to broader societal goals.

As Singapore approaches its 2035 targets, the model it has developed offers valuable lessons for countries worldwide seeking to accelerate their own clean energy transitions. The combination of strategic vision, institutional innovation, technological advancements, and regional cooperation provides a blueprint for addressing the global challenge of decarbonising energy systems while maintaining economic growth and energy security.

The transformation Singapore is undergoing – from a fossil fuel-dependent city-state to a regional clean energy hub – demonstrates that the transition to sustainable energy systems is not only technically feasible but also economically advantageous and geopolitically strategic. As the world seeks to meet climate goals while maintaining economic prosperity, Singapore’s approach offers both inspiration and practical guidance for the path forward.

Singapore’s Clean Energy Revolution: Strategy, Development, and Vision

Executive Summary