Opening Remarks by 2M Tan See Leng at Groundbreaking Ceremony of Meranti Power OCGTs

Mr Richard Lim, Chairman, Energy Market Authority and Meranti Power,

Mr Takao Tsukui, Executive Vice President, Mitsubishi Power,

Mr Koichi Watanabe, CEO and Managing Director of Jurong Engineering,

Distinguished Guests, Ladies and Gentlemen,

1. A very good afternoon to all of you. I would first like to congratulate the Meranti Power team and its partners on the groundbreaking of Meranti Power's Open Cycle Gas Turbine (OCGT) generation station. Thank you for inviting me to share this significant milestone with you.

Critical Role of OCGTs within our Power System

2. Singapore has one of the most stable and reliable power systems in the world. To achieve this, we constantly maintain, renew and expand our electricity grid, and ensure that there is sufficient reliable generation capacity to meet energy demand.

3. Today, almost all the electricity produced in Singapore is generated by Combined Cycle Gas Turbines, or CCGTs. They are the most efficient thermal generation units available.

4. However, CCGTs have some technical limitations.

a. They cannot start up quickly when other CCGTs run into technical issues and have to be shut down, nor can they respond quickly to changes in demand patterns.

b. This is because CCGTs take up to 14 hours to reach full generation output from a cold-state, and once a CCGT is started, it needs to run for at least 6 hours before it can be shut down. And once it is shut down, it needs at least 6 hours before it can be restarted again.

5. Therefore, many power systems also have fast start generation units to complement CCGTs. This is needed to ensure that there is sufficient supply to meet energy demand.

6. One example is the Open Cycle Gas Turbine, or OCGT. They can be started in 10 minutes and reach full generation load within another 15 minutes.

a. OCGTs have played an important role in Singapore's power system for decades, ensuring that all consumers in Singapore receive uninterrupted electricity.

b. They also play a role in supplying electricity to meet peak demand, which is typically experienced during the middle of the day when the temperature is the hottest and factories are operating at full capacity.

i. The difference between electricity demand at 8am and 2pm is ~560MW on average. This difference is typically met by CCGTs.

ii. But during the hottest months of the year, in May and July, the difference between peak and off-peak demand can rise to ~780MW, which is approximately 200MW increase in demand. This translates to half a CCGT unit. Rather than starting up additional CCGTs to meet these bursts of peak demand, it is more effective and efficient to start up OCGTs instead.

iii. During this hot spell that we have been facing, the existing OCGTs in the system have been supplying electricity regularly during the peak hours.

Meranti Power to Build 2 New OCGTs

7. Today, we are commissioning Meranti Power, a subsidiary of EMA, to build 2 new OCGTs.

a. These units will be operationally ready by June 2025.

They will replace the existing OCGTs in our system which are more than 30 years old and reaching the end of their asset life.

b. With these 2 new OCGTs, our system will have a 680MW of new fast start generation capacity. This will cater for the fast start needs of the system, and backup capacity for future growth in electricity demand.

c. The units will run primarily on natural gas, but also have the capability to run on diesel as a back-up fuel, if needed.

8. Meranti Power has been commissioned to build these new OCGTs as there has not been any commercial interest from the private sector to build them. This is because they are less competitive than CCGTs. Therefore, government has to step in, as a last resort, to provide the critical infrastructure needed to ensure the energy sector remains resilient and reliable.

9. Nevertheless, in our liberalised electricity market, the private sector will continue to play an important role in ensuring that we have sufficient generation capacity. The upcoming new CCGTs by Keppel and Sembcorp are examples of the critical role that privately-owned generation companies play.

Preparing for the Future

10. Even as we meet today's system demands, we should prepare for the future. I am heartened to learn that Meranti Power has also designed these OCGTs to be future ready.

a. They will have the ability to take up to 30% hydrogen.

b. In the future, with the necessary enhancements, the OCGTs can potentially be powered by up to 100% hydrogen.

c. These capabilities are part of Singapore's plans to transit using other low-carbon energy fuel when it becomes commercially viable to do so.

11. I would also like to applaud Meranti Power for its other efforts to support the energy transition. I understand that Meranti Power will install solar photovoltaic systems on the rooftop of its premises, and energy-efficient infrastructure such as smart air-conditioning and smart lift systems. Every effort towards reducing energy consumption counts towards our efforts to succeed in the energy transition.

Conclusion

12. Let me conclude. The commissioning of these 2 new OCGTs is a significant milestone, not just for Meranti Power, but for the entire power sector. It marks various firsts:

a. It is the first time in 30 years that new OCGTs will be built;

b. It is the first time that Meranti Power will be building new generation units;

c. It is also the first time since the electricity market was liberalised that the Government, through Meranti Power, is building large scale natural gas fired generation capacity. This demonstrates our commitment to safeguarding energy security and reliability.

13. On this occasion of many firsts, I would like to congratulate all the staff of Meranti Power and EMA for this milestone. I am confident that Meranti Power will continue to play an instrumental role safeguarding the stability and reliability of energy supply for all Singaporeans.

14. Thank you.

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