Gan Kim Yong outlines energy transition safeguards amid global market volatility
Minister Gan Kim Yong said Singapore’s energy strategy is anchored in diversification, with safeguards such as a second LNG terminal, regional electricity imports, and a S$10 billion Future Energy Fund to address volatility in global energy markets.
- Energy diversification across four key switches remains central to Singapore’s energy transition.
- A second LNG terminal and over 8GW in approved electricity imports aim to improve supply resilience.
- S$10 billion Future Energy Fund and carbon tax support long-term decarbonisation despite market fluctuations.
In a written parliamentary reply on 4 February, 2026, Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong said that diversification of energy sources is critical to Singapore’s energy transition strategy, especially in managing global market volatilities and uncertainties.
The reply was issued to People's Action Party Member of Parliament Edward Chia Bing Hui (Holland–Bukit Timah GRC), who had asked how Singapore’s strategy accounts for potential volatility in global energy markets, and what safeguards are in place to ensure that medium-term decarbonisation goals remain on track.
Key elements of energy diversification strategy
Gan stated that Singapore “will continue to decarbonise our power sector across our four switches of natural gas, domestic solar deployment, low-carbon electricity imports and low-carbon alternatives.”
Within each switch, he said the Government has “implemented strategies to ensure that we continue to press forward on greening our energy supply.”
Currently, around 95% of Singapore’s electricity generation comes from natural gas, making security of supply a key concern.
Gan announced that Singapore is developing a second liquefied natural gas (LNG) terminal to allow for greater diversification of gas imports, helping to “mitigate supply disruption risks.”
Progress and outlook for solar energy
Gan said Singapore is “making good progress” towards its target of 2 gigawatt-peak (GWp) of solar deployment by 2030, with over 1.7 GWp installed as of June 2025.
He added that “we will continue to find new ways to accelerate and maximise solar deployment.”
Referencing estimates by the Solar Energy Research Institute of Singapore (SERIS), Gan noted that up to 8 GWp of solar PV could theoretically be deployed across all viable surfaces in Singapore with future technology improvements.
However, he cautioned that “maximising solar at 8 GWp is only expected to meet up to 10% of Singapore’s electricity demand by 2050.”
Regional electricity imports and emerging technologies
To supplement domestic solar generation, Gan said Singapore is “pushing forward with our plans to import low-carbon electricity from the region.”
To date, the Energy Market Authority (EMA) has granted conditional approvals and licences for more than 8 gigawatts equivalent of electricity imports from Malaysia, Thailand, Indonesia, and Australia.
Gan noted that “project developers remain interested in supplying low-carbon electricity to Singapore” and are working with foreign authorities to obtain the necessary approvals.
In addition, the Government is “building our capabilities in other low-carbon energy sources, including hydrogen, advanced geothermal, and advanced nuclear,” which may become “cost-competitive options in the long run.”
Financial safeguards and infrastructure investment
Gan acknowledged that “geopolitical and commercial risks, coupled with energy price volatility, reduces private investment appetite to fund these [low-carbon energy] projects.”
To address this, he said the Government has established the Future Energy Fund with a S$10 billion injection “to support strategic low-carbon and energy supply security projects.”
Singapore has also created Singapore Energy Interconnections Pte Ltd, which will “invest, develop, own and operate subsea interconnectors to transmit low-carbon electricity into Singapore.”
Carbon tax and international alignment
Gan reiterated the role of Singapore’s carbon tax as a safeguard to “ensure the cost of emissions are appropriately priced.”
Revenue from the tax “will be channelled to support decarbonisation efforts and help companies invest in low-carbon and energy-efficient solutions.”
He added that the Government will “continue to closely monitor global developments and take into consideration international climate efforts, to ensure that our energy transition trajectory is wearable and sustainable.”
Singapore’s growing interest in nuclear energy
Singapore is assessing the viability of nuclear energy as part of its long-term strategy to decarbonise the power sector and strengthen energy security.
Prime Minister Lawrence Wong announced in February 2025 that the Government will build national capabilities to evaluate nuclear options safely and cost-effectively.
This includes support through the Future Energy Fund, which will now receive a total injection of S$10 billion to catalyse clean energy projects, including nuclear, hydrogen, and electricity imports.
The Republic has also signed the 123 Agreement on Nuclear Cooperation with the United States and is pursuing similar partnerships to deepen expertise in small modular reactors (SMRs), a new generation of safer and more compact nuclear technologies.
