Singapore is hoping that its first ever dual solar and conventional electricity contract will help reduce the city-state’s nearly complete dependence upon fossil fuels for electricity.
Around 95% of Singapore’s electricity generation comes from natural gas. There is only a 25-30MW peak of solar capacity installed, a figure that is only 8% of the national target of 350MW by 2020.
Singapore’s PacificLight Energy (PLE) is working with Oslo-based Renewable Energy Corporation (REC) to present the solar and conventional electricity contract to commercial and industrial consumers that utilise at least 4,000kWh a month.
This contract will allow the customers to combine the two costs from REC for the PV generated electricity, that will be at a fixed rate per kWh, and also to PacificLight at the grid price, into one bill. According to the companies, this differs greatly from other programmes where the bills must be paid individually.
According to chief executive officer of PacificLight, Yu Tat Ming: “Once you have made the [solar panel] instalment, you are not subject to any [price] volatility”.
This program has arisen to combat the rising electricity tariff in Singapore (it went up by almost a third between 2009 and 2013), and to accommodate the growing popularity and relatively low prices of solar.
According to an estimate by Deutsche Bank, many countries, including the United States, Japan most of Europe, and Singapore, have achieved grid parity where electricity sales revenues equal the cost of solar. Deutsche Bank believes that in the next three years, 80% of the global market will achieve grid parity, and that some markets even have grid parity without any subsidies.
The International Energy Agency claims solar may command the global markets by 2050.
Despite the recent drop in oil prices, chief executive of REC Martin Cooper believes solar will stay competitive with its dropping price as well: “It’s a minor hiccup. For a 40-year plan to do something, this afternoon’s price is just a blip”.