The Energy Market Authority is launching a consultation process incorporating demand response -- where industries are encouraged to curtail their demand, thereby reducing peak demand for energy.
Minister in the Prime Minister's Office and Second Minister for Trade and Industry, S Iswaran, made the announcement on Monday at the opening of the Singapore International Energy Week.
He said the move is expected to benefit major consumers of energy, including the electronics, petrochemical and chemicals sectors.
As a small country almost wholly reliant on imported energy, Singapore has to adapt to the evolving global environment to shape its energy landscape.
One strategy is to empower consumers so they can make informed decisions on energy consumption. This is something which the industry consultation on demand response hopes to achieve.
Mr Iswaran said: "This is specifically in the context of consumers being able to respond to price signals and then curtail demand when there are spikes in the price.
"What that does is two things -- one, at the individual consumer level, whether you are a company or an organisation, is that you are able to lower your costs of energy... At the system level, it then lessens the system level pressure when there are peak demands."
Industries will be consulted on how they can put in place control systems to shed energy loads when prices spike -- for example, by cutting down lights and air conditioning.
"What we want to do through this consultation process is put out the Energy Market Authority's, the government's, thinking on these matters with some specific ideas and then get a response from the industry itself -- because there's quite a range of industry players who would be interested in these sorts of initiatives," said Mr Iswaran.
"And we want to make sure we have heard the different perspectives before we go ahead to look at how we can structure these arrangements," he added.
The public consultation will also cover the possibility of an electricity futures market in Singapore, to bring about greater competition in the energy market, which will in turn benefit the end-user.
Mr Iswaran explained: "Futures markets are already well-established for other commodities such as oil and gas. They have also been introduced for electricity in New Zealand, Australia, and the UK.
"By enabling trade in forward electricity products, a futures market will complement Singapore's wholesale market and yield several benefits.
"Firstly, independent retailers will be able to participate in the market by purchasing futures contracts and in turn offering competitive packages to consumers. This will increase retail competition and benefit end consumers.
"Consumers will also be able to hedge their risks by locking in longer-term prices, while generation companies stand to gain by using the futures contracts to hedge against their fuel price and operational risks during plant outages."
Besides the various initiatives to boost Singapore's energy sector, there are also several research projects in areas of renewable energy and electric cars.
Mr Iswaran emphasised that in Singapore's growing energy market, it is important to ensure that the required manpower is trained to meet the needs of the industry.
Mr Iswaran also spoke about Singapore's strategy to diversify sources to enhance its energy security.
He said Singapore's Liquefied Natural Gas (LNG) terminal is on track to start operations in the second quarter of 2013. With the development of the terminal, Singapore will be well-placed to diversify its gas supply and tap on the global LNG market.
Mr Iswaran said the demand for LNG is already stronger than initially expected.
He stressed that individuals and businesses have played, and will continue to play, a key role in developing a strong energy industry for the people and businesses.
To acknowledge those who have made outstanding contributions to Singapore's energy sector, the government has introduced the Singapore Energy Award.
