The signing of the power purchase agreement between Singapore and Sarawak on October 17, 2025, marks a watershed moment in Singapore’s energy security strategy. With construction slated to begin in 2026 and commercial operations expected around 2035, this 1GW undersea power cable project represents the Republic’s most ambitious renewable energy import initiative to date. This analysis examines the strategic implications, technical challenges, and transformative impact on Singapore’s energy landscape.
The Strategic Context: Singapore’s Energy Trilemma
Current Energy Vulnerability
Singapore faces a unique energy security challenge. As a small island nation with limited natural resources, the Republic imports virtually all its energy needs. Currently, natural gas accounts for approximately 95% of Singapore’s electricity generation, making the nation heavily dependent on pipeline gas from Indonesia and Malaysia, supplemented by liquefied natural gas (LNG) imports.
This dependency creates multiple vulnerabilities:
Supply concentration risk: Over-reliance on fossil fuel imports from neighboring countries exposes Singapore to geopolitical tensions, supply disruptions, and price volatility.
Carbon emissions burden: The power sector contributes 40% of Singapore’s total carbon emissions, creating significant pressure to decarbonize in line with international climate commitments.
Limited domestic alternatives: Singapore’s geographical constraints severely limit renewable energy options. With cloud cover reducing solar efficiency and no rivers for hydropower, the nation must look beyond its borders for clean energy solutions.
The Four-Switch Strategy
Singapore’s energy strategy revolves around four “switches” to diversify and decarbonize its power supply:
- Natural gas (current dominant source)
- Solar energy (limited by land constraints)
- Regional power imports (the Sarawak cable represents this pillar)
- Emerging low-carbon alternatives (including hydrogen and carbon capture)
The Sarawak cable project directly addresses the third switch, representing a fundamental shift from dependence on fossil fuel imports to renewable energy imports.
The 2026 Construction Timeline: Critical Success Factors
The Submarine Cable Shortage Challenge
Chief Minister Abang Johari’s acknowledgment of a submarine cable shortage highlights a global infrastructure bottleneck that could make or break the project timeline. This shortage stems from:
Global renewable energy boom: The worldwide transition to renewable energy has triggered unprecedented demand for submarine power cables. Offshore wind farms in Europe, interconnectors between countries, and similar projects across Asia are competing for limited manufacturing capacity.
Specialized manufacturing: Only a handful of companies globally possess the technology and capacity to manufacture high-voltage submarine cables capable of transmitting gigawatt-scale power over hundreds of kilometers. These include Prysmian Group, Nexans, NKT, and LS Cable & System.
Long lead times: Manufacturing submarine cables of this specification typically requires 18-24 months from order to delivery, with additional time needed for testing and installation.
Installation vessel scarcity: Specialized cable-laying vessels are in short supply globally, with booking queues extending years in advance.
Optimism for 2026 Commencement
Abang Johari’s confidence in overcoming the cable shortage by end-2025 suggests several potential developments:
Early procurement agreements: The consortium may have secured preliminary agreements with cable manufacturers, positioning themselves in the production queue ahead of the official conditional approval.
Regional manufacturing expansion: There are indications that cable manufacturers are expanding capacity in Asia to meet growing demand, which could alleviate supply constraints.
Phased construction approach: The project might employ a staged construction strategy, beginning work on onshore substations and nearshore sections while awaiting delivery of deep-sea cables.
Alternative routing optimizations: Engineering refinements to the cable route could reduce total cable requirements or allow use of more readily available specifications.
Singapore’s National Impact: A Multi-Dimensional Transformation
1. Energy Security Enhancement
Diversification of supply sources: The 1GW import represents approximately 12-15% of Singapore’s current peak electricity demand (estimated at 7-8GW). This substantial contribution reduces dependence on any single energy source or supplier.
Geographic diversification: Unlike current gas pipelines concentrated in the Strait of Malacca region, the Sarawak cable creates a new energy corridor through Indonesian waters, geographically diversifying Singapore’s energy infrastructure.
Long-term supply agreements: Power purchase agreements for such projects typically span 20-25 years, providing unprecedented long-term energy security compared to shorter-term LNG contracts.
Reduced exposure to fossil fuel price volatility: Hydropower offers more predictable pricing than fossil fuels, which are subject to global commodity market fluctuations, geopolitical events, and seasonal demand variations.
2. Decarbonization Impact
Emissions reduction magnitude: Displacing 1GW of natural gas generation with hydropower could reduce Singapore’s carbon emissions by approximately 3-4 million tonnes of CO2 annually, equivalent to taking 600,000-800,000 cars off the road.
Progress toward 2030 goals: Singapore has committed to peaking emissions around 2030. The Sarawak cable directly contributes to this target by substantially reducing power sector emissions, which currently account for 40% of national emissions.
Credibility in climate leadership: As a developed nation and financial hub, Singapore’s commitment to major renewable energy imports enhances its credibility in international climate negotiations and sustainable finance markets.
Cascading economic effects: Lower-carbon electricity enables Singapore-based companies to reduce their carbon footprints, potentially attracting businesses seeking to meet their own sustainability commitments.
3. Economic Implications
Electricity price dynamics: While initial costs may be substantial due to infrastructure investment, hydropower typically offers stable long-term pricing. This could moderate electricity price increases compared to continued reliance on increasingly expensive fossil fuels and carbon pricing mechanisms.
Energy cost competitiveness: Stable, predictable energy costs enhance Singapore’s attractiveness for energy-intensive industries such as data centers, semiconductor manufacturing, and advanced manufacturing.
Green economy development: The project positions Singapore as a regional hub for clean energy trading and management, potentially spawning new industries in renewable energy finance, grid management technology, and regional power trading.
Job creation: Both construction (2026-2035) and operations (2035 onward) phases will create employment opportunities in engineering, project management, grid operations, and related technical fields.
Infrastructure investment multiplier: The estimated multi-billion dollar investment generates economic activity through construction contracts, equipment procurement, and technical services.
4. Geopolitical and Regional Integration
ASEAN energy integration: The project exemplifies practical ASEAN economic integration, moving beyond rhetoric to physical infrastructure connecting member states.
Indonesia’s strategic position: With 70% of the cable route passing through Indonesian waters, Jakarta’s cooperation is essential. This creates opportunities for trilateral cooperation and potentially Indonesian access to the power system.
Malaysia-Singapore relations: The project strengthens bilateral ties through long-term infrastructure interdependence, creating mutual interests in regional stability and cooperation.
Regional power grid template: Success of this project could establish a template for broader Southeast Asian power grid integration, with potential connections to Thailand, Vietnam, and beyond.
Chinese infrastructure competition: The project may reduce regional reliance on China-funded infrastructure initiatives, offering an alternative model for regional connectivity based on market principles and mutual benefit.
5. Technological and Infrastructure Development
Grid modernization imperative: Integrating 1GW of imported hydropower requires substantial upgrades to Singapore’s electrical grid, including:
- Advanced forecasting systems to manage variable supply
- Enhanced grid flexibility and storage capacity
- Sophisticated control systems for multi-source power management
- Upgraded transmission infrastructure on the receiving end
Smart grid acceleration: The complexity of managing imported renewable energy alongside domestic generation will accelerate Singapore’s smart grid development, positioning the nation as a testbed for advanced grid technologies.
Energy storage opportunities: Variable renewable energy imports create business cases for battery storage, pumped hydro storage (potentially in neighboring countries), and other energy storage technologies.
Regional expertise development: Singapore’s experience managing this complex international power import project will generate valuable expertise exportable to other regions facing similar challenges.
6. Social and Environmental Dimensions
Public health benefits: Reduced reliance on fossil fuel combustion decreases air pollutants, potentially improving air quality and public health outcomes, though Singapore’s air quality is already relatively good.
Climate resilience: Diversifying energy sources enhances Singapore’s resilience to climate-related disruptions affecting any single energy supply chain.
Environmental trade-offs: While cleaner than fossil fuels, large-scale hydropower in Sarawak raises environmental concerns about river ecosystems, indigenous communities, and biodiversity. Singapore must navigate the reputational implications of these trade-offs.
Public acceptance: The long-term nature of the commitment (extending to 2035 and beyond) requires sustained public support, necessitating transparent communication about costs, benefits, and trade-offs.
Technical and Logistical Complexities
The 700km Challenge
The sheer scale of the infrastructure is unprecedented in Southeast Asian energy history:
Engineering complexity: Submarine cables must withstand extreme pressures, marine growth, fishing activities, ship anchors, and seismic activity along a 700km route traversing varying ocean depths and seabed conditions.
Installation precision: Cable laying must account for tidal currents, seafloor topography, existing submarine infrastructure (telecommunications cables, pipelines), and marine protected areas.
Maintenance accessibility: While submarine cables are designed for decades-long operation with minimal intervention, any repairs require specialized vessels and can take weeks to execute, necessitating redundancy planning.
The Indonesian Corridor
The fact that 70% of the cable route passes through Indonesian waters adds layers of complexity:
Regulatory approvals: Indonesia must approve routing, environmental impacts, and operational protocols, potentially requiring coordination across multiple Indonesian ministries and regional governments.
Indonesian participation: Chief Minister Johari indicated Indonesia is “quite positive” and “still talking,” suggesting ongoing negotiations about potential Indonesian access to the system or transit fees.
Sovereignty considerations: The cable creates permanent infrastructure through Indonesian maritime territory, requiring careful diplomatic management and potentially long-term access agreements.
Trilateral coordination: Any disruption or maintenance requires coordination among Singapore, Malaysia (Sarawak), and Indonesia, creating a complex governance structure.
Grid Integration Challenges
Synchronization requirements: Integrating 1GW of remote hydropower requires precise frequency and voltage synchronization between Sarawak’s grid and Singapore’s grid.
Reliability standards: Singapore’s electrical grid maintains world-class reliability (average interruption time of less than one minute per customer per year). The imported power must meet these exacting standards.
Backup capacity: Singapore must maintain sufficient domestic generation capacity to cover the full 1GW in case of cable failure, potentially reducing the economic efficiency of the system.
Demand matching: Hydropower generation patterns must align with Singapore’s demand profile, potentially requiring reservoir management coordination or complementary energy storage.
Risk Assessment and Mitigation
Timeline Risks
Cable supply delays: Despite optimism, global supply chain disruptions could push construction start beyond 2026, cascading into delayed commercial operations.
Permitting obstacles: Securing all necessary approvals from multiple jurisdictions could prove more time-consuming than anticipated.
Technical challenges: Unexpected seabed conditions, environmental concerns, or engineering obstacles could extend the construction timeline.
Mitigation strategies: Early procurement, regulatory pre-engagement, comprehensive marine surveys, and schedule buffers can reduce these risks.
Operational Risks
Physical disruption: Earthquakes, submarine landslides, ship anchors, or deliberate sabotage could sever the cable, cutting off supply.
Political instability: Changes in government or policy in Malaysia, Indonesia, or internal Sarawak politics could affect long-term agreements.
Climate impacts on hydropower: Changing rainfall patterns due to climate change could affect Sarawak’s hydropower generation capacity.
Economic viability: If electricity prices fall significantly (e.g., due to breakthrough energy technologies), the project economics could become unfavorable.
Strategic Mitigation
Diversification within diversification: The Sarawak cable is one of multiple initiatives; Singapore is also pursuing solar imports from Australia and developing domestic solar capacity.
Insurance and contractual protections: Power purchase agreements typically include force majeure clauses and performance guarantees.
Ongoing diplomatic engagement: Regular trilateral discussions can address emerging issues before they become crises.
Technical redundancy: Designing the system with redundant cables or sections can enhance resilience.
The 2035 Horizon: What Success Looks Like
By the time commercial operations commence around 2035, Singapore’s energy landscape should look markedly different:
Diversified energy portfolio: Natural gas share drops from 95% to potentially 70-75%, with renewables (solar, wind, hydropower imports) comprising 20-25%, and emerging technologies filling remaining gaps.
Regional energy hub: Singapore operates as a sophisticated electricity trading platform, potentially facilitating power exchanges among multiple ASEAN nations.
Technology leadership: Singapore-developed grid management technologies and renewable integration solutions become export products.
Carbon trajectory: The nation is firmly on track toward its 2050 net-zero ambition, having achieved significant emissions reductions in the crucial 2030-2040 period.
Economic resilience: Energy security and cost stability have attracted additional investment in advanced manufacturing and digital infrastructure.
Comparative Context: Global Precedents
Singapore’s approach mirrors successful international models:
Norway-Europe interconnectors: Norway exports hydropower to continental Europe via multiple submarine cables, providing clean energy while generating revenue.
Morocco-Spain connection: The Mediterranean interconnector allows electricity trading between Africa and Europe, demonstrating viability of cross-regional links.
Australia’s proposed Asian exports: Australia is developing even more ambitious plans to export solar energy to Singapore via 4,500km cable, making the Sarawak project a stepping stone.
Nordic power pool: Scandinavian countries operate an integrated electricity market spanning multiple nations, demonstrating mature regional power trading.
Conclusion: A Decade-Long Transformation Begins
The October 2025 power purchase agreement and targeted 2026 construction start represent the beginning of a decade-long transformation in Singapore’s energy system. Success will require sustained political commitment across three countries, technical excellence in executing one of the region’s most complex infrastructure projects, and adaptive management as circumstances evolve.
For Singapore, the stakes extend beyond energy security. This project is about demonstrating that a small, resource-constrained nation can chart a path to sustainable development through innovation, regional cooperation, and strategic long-term thinking. The cable that will eventually stretch 700km across the seabed represents not just electrons flowing, but a new paradigm of regional integration and shared prosperity.
The submarine cable shortage that threatens the 2026 timeline is emblematic of a global challenge: the physical infrastructure needed for energy transition is struggling to keep pace with political commitments and technical possibilities. How Singapore, Sarawak, and Indonesia navigate this constraint will offer lessons for other nations pursuing ambitious clean energy goals.
As construction begins—hopefully on schedule in 2026—Singapore takes a concrete step toward energy resilience, climate responsibility, and regional leadership. The success or failure of this endeavor will reverberate far beyond the Republic’s shores, potentially catalyzing or cautioning similar initiatives across Southeast Asia and beyond.
The journey to 2035 will be long, complex, and undoubtedly challenging. But for a nation that has built its success on turning constraints into opportunities, the undersea power cable from Sarawak represents both Singapore’s energy future and its enduring capacity to secure that future through strategic vision and determined execution.
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