Singapore Budget announces $5B investment in Future Energy Fund

Singapore is set to address emerging security challenges in the way of energy, said the country’s Deputy Prime Minister Lawrence Wong at the nation’s budget announcement last Friday.

This has led to the set-up of a Future Energy Fund, with an initial injection of $5 billion – this fund will allow for a transition from natural gas to cleaner fuels.

“There is considerable uncertainty as to how these energy pathways will work out,” said Wong. “What is clear is that significant effort and costs will be needed to transit from a system powered almost entirely by natural gas to one powered largely by clean energy. We say this is an ‘energy transition’… But the scale of this so-called transition is massive, and we will need to get it done over the next two decades or so, which is not a lot of time.

[The fund] will give us the confidence to invest in good time, put us in a better position to move quickly on critical infrastructure, and enhance our security in clean energy.”

Singapore’s other energy pathways

Citing Singapore’s natural gas supplies as critical “in the near-to-medium term”, Wong also shared plans to build a second LNG terminal, which will be developed and operated by Singapore LNG Corporation (SLNG).

The organisation is currently studying a Floating Storage and Regasification Unit (FSRU) concept for the second terminal, which will differ from the current onshore terminal on Jurong Island.

Despite the nation’s reliance on natural gas, Wong stressed that Singapore was also looking into other options for cleaner fuels – including hydrogen, as part of the National Hydrogen Strategy announced at the 2022 Singapore International Energy Week (SIEW).

“Hydrogen has the potential as a clean fuel,” he said. “For now, it is still technologically nascent, costly, and risky. Nevertheless, we have set out a National Hydrogen Strategy to take purposeful steps forward. We will start by testing and deploying ammonia, which is a hydrogen carrier, for power generation and bunkering on Jurong Island.”