Singapore
Asia's first liberalised power pool, running on a system that is 93% imported gas. Nowhere else does a molecule price translate so directly into a megawatt price.
Overview
Asia's first liberalised wholesale electricity market sits on a system that burns almost nothing but imported gas. No hydro to lean on, no coal fleet worth the name, no nuclear. Nowhere else in the region does a molecule price read through to a megawatt price this cleanly.
The National Electricity Market of Singapore (NEMS) has been trading since 1 January 2003. Energy Market Company (EMC) calls itself a stock exchange for electricity, and that is fair enough. Practically all of the country's power is bought and sold through it. Generators offer into a half-hourly auction, the clearing engine stacks those offers against demand, and the Uniform Singapore Energy Price (USEP) that falls out settles every injection and withdrawal at the Singapore hub.
The fuel side is just as concentrated. Around 95% of Singapore's electricity comes from imported natural gas, part piped from Indonesia and Malaysia, part landed as LNG at Jurong Island. Gas procurement, terminal throughput and power prices are one chain. Treat them as three markets and you will miss how the risk actually travels.
Two things are now changing the position. Singapore is building towards 6 GW of low-carbon electricity imports by 2035, roughly a third of projected demand, which turns an isolated island system into a node on an ASEAN grid. And gas buying is being centralised under a single aggregator instead of each genco sourcing its own.
In most markets the marginal fuel is a question you have to answer every hour. Here it is a constant. USEP is about as pure an expression of delivered gas cost, plant efficiency and reserve margin as you will find, which puts the money in the distribution rather than the direction.
Market structure
Small market, full institutional stack. A policy regulator that also runs the power system, an independent market operator, a handful of large gencos, and a contract layer built to stop any one of them setting the price.
Who does what
| Function | Body | Role |
|---|---|---|
| Regulator and system operator | EMA | Energy Market Authority — licensing, market rules and real-time power system operation |
| Market operator | EMC | Runs the NEMS auction, clears and settles the wholesale market |
| Transmission and metering | SP Group | Regulated network owner; SP Services buys for regulated-tariff consumers |
| Gas transport | PowerGas | Sole licensed transporter of natural gas and town gas |
| Interconnection | SGEI | Singapore Energy Interconnections, established April 2025 to develop cross-border links |
Generation and retail
A small group of independently owned gencos runs combined-cycle plant on Jurong Island and the mainland, plus newer fast-start open-cycle units. Retail is fully contestable. Every consumer down to a household can buy from a licensed retailer under the Open Electricity Market, or stay on the regulated tariff from SP Services.
The contract layer
A handful of gencos supply most of the load. Left alone, an energy-only auction in that situation is an open invitation to withhold. Singapore's answer is the vesting contract, a two-way contract for difference, usually between SP Services and the generators, priced off the long-run marginal cost of the most efficient technology supplying at least 25% of demand. A generator that withholds capacity to lift USEP hands the difference straight back under its vesting position, so the incentive largely cancels. The current regime runs from July 2023 to June 2028.
Headline USEP is not the whole revenue story for a generator, nor the whole cost story for a retailer. Before you read anything into a price spike, find out how much of the load was already hedged.
Infrastructure — power and gas
One island, one grid, one LNG terminal, and until recently no meaningful electrical connection to anywhere else. The question here is concentration, not congestion.
Power
A single control area
None of the zonal splits that fragment larger Asian systems. Nodal prices are calculated across the network, then collapse to one hub price at settlement.
Installed capacity
13,261 MW as at June 2025, of which 10,115 MW is combined-cycle, co-generation and tri-generation plant.
Cross-border links
The existing interconnection with Peninsular Malaysia carries the LTMS-PIP multilateral trade. Dedicated new links are being built for the import programme.
Gas and LNG
Gas gets here two ways. Pipeline from Indonesia and Malaysia, on long-dated contracts. LNG into the Singapore LNG terminal on Jurong Island: two jetties, four storage tanks, annualised send-out around 9 mtpa and a peak near 11 mtpa. It covers roughly half the gas burnt for power today, and could cover the lot if it had to.
Term LNG import rights sit with a short licensed list, ExxonMobil, Pavilion Energy, Sembcorp Fuels and Shell, under EMA's term importer licences. That structure is being consolidated. EMA intends to appoint one entity to aggregate gas demand for the whole power sector, which moves the price risk on imported fuel onto a different balance sheet.
Schematic — system topology, not a geographic map. Fuel enters by pipeline or as LNG, moves through a single transporter to the generation fleet, and is sold through one clearing engine. Electricity imports enter the same auction rather than bypassing it.
Demand and supply
Demand grinds upward on data centres and electrification. The supply stack is one fuel deep. Everything interesting is happening at the edges of that stack.
Demand
A dense, wealthy, air-conditioned city state has no real seasonal swing. Load is high, flat and, by regional standards, easy to forecast. What growth there is comes from digital infrastructure and transport electrification rather than from more people. Gross electricity output reached 30 TWh in the first half of 2025.
Supply
Natural gas supplied 93.1% of generation in the first half of 2025. Solar managed 2.5%, and municipal waste, biomass and imported electricity split the rest. Solar is growing fast off a small base, and what limits it is land, not economics. Utility scale here means reservoirs and rooftops.
First half of 2025. Source: EMA, Singapore Energy Statistics, corroborated by Low Carbon Power.
As at June 2025. Source: EMA, Singapore Energy Statistics.
Today a supply shock has nowhere to go but into price: an unplanned outage on a piped line, a cargo that slips. Firm imports give the stack a second source that does not move with the first. Correlations that have held for two decades are not safe assumptions for the 2030s.
Price setting mechanism
A half-hourly marginal-cost auction with nodal pricing under the bonnet and one uniform price on top. Two ceilings sit above it: an explicit value of lost load, and since 2023 a second, moving cap.
How the auction works
Generators offer for each half-hour period. The clearing engine dispatches upward from the cheapest offer until supply meets demand, co-ordinating energy against the reserve and regulation the system operator needs. The last offer taken sets the marginal price. Prices are computed at every network node and then collapse into one number for settlement: USEP, the load-weighted average of nodal prices across all off-take nodes in the period.
Gas plant is on the margin in virtually every period, so USEP is a gas price wearing megawatt-hour clothing. EMA notes that offers are dominated by fuel cost and that gas costs are still largely oil-indexed. The route from a crude move to a Singapore power price is therefore short, and what lag exists comes from contract indexation rather than from anyone switching fuel.
The two caps
There is a hard energy price cap of S$4,500/MWh, set against the value of lost load. That is the highest number the clearing engine can produce. Underneath it, since 1 July 2023, sits the Temporary Price Cap: a circuit breaker that trips when the moving average of USEP over the last 48 half-hour periods crosses a threshold. Once it trips it holds for at least a full day, capping USEP at a multiple of CCGT long-run marginal cost, between 1.5 and 3 times, reset fortnightly against the spread between spot and term gas.
The cap tightens precisely when spot gas is dear relative to term gas, which cuts the right tail off the price distribution on exactly the days it would have paid. Price optionality on USEP and you are pricing an option the regulator can shorten at will.
Where prices have sat
Through 2025 USEP mostly settled in the S$100 to S$200/MWh range, a long way below the crisis of 2022 and early 2023, when averages ran near S$320/MWh and spikes cleared above S$450/MWh. Averages are the least useful statistic here. The shape is long flat stretches broken by scarcity events around plant outages.
Regulatory regime
Policy, licensing, market rules and real-time system operation all sit with one regulator. That concentration makes the regime fast-moving, and quick to intervene when it decides the market is not delivering.
| Body | Remit |
|---|---|
| Energy Market Authority (EMA) | Electricity and gas regulation, licensing, market design and power system operation |
| Energy Market Company (EMC) | Operation, clearing and settlement of the NEMS wholesale market |
| Ministry of Trade and Industry | Parent ministry; energy policy and energy security |
| Singapore Energy Interconnections (SGEI) | Development and operation of cross-border electricity interconnections |
The reform arc
NEMS opened in 2003. Retail contestability reached every consumer when the Open Electricity Market rollout finished in 2019. Since then the interventions have been about resilience rather than more liberalisation: vesting contracts to hold market power down, the Temporary Price Cap in 2023 to hold volatility down, and a centralised process from 2023 under which EMA calls for new generation capacity instead of waiting for merchant investment to turn up.
Two changes worth watching
Centralised gas procurement
EMA plans to appoint a single aggregator of gas demand for the whole power sector. Buying as one block should improve terms and security of supply. It also lifts gas price risk off individual gencos and drops it on one balance sheet, which changes what a generator's cost curve is actually telling you.
Electricity imports
Thirteen projects hold conditional approval and six have conditional licences, drawing on Australia, Cambodia, Indonesia, Malaysia and Vietnam. The LTMS-PIP already trades up to 200 MW multilaterally across four ASEAN states. That is the template being scaled.
How to read the regime
Nobody in Singapore treats the wholesale price as sacred. When a market outcome runs against security of supply or consumer protection, the regulator adds an instrument: a contract layer, a cap, a procurement process. It has done so every time. Regulatory risk here is not that someone breaks a rule. It is that a new rule arrives on Tuesday and applies on Wednesday.
Key links
Primary sources for this market. Figures on this page are drawn from these and from published market data.