On 8 September 2023, the Ministry of Trade and Industry Singapore (MTI) announced that Singapore and Indonesia have signed a Memorandum of Understanding ("MOU") to strengthen cross-border electricity trade ("September 2023 MOU"). Under the September 2023 MOU, both countries undertake to jointly support the development of commercial projects for cross-border trading of low-carbon electricity, facilitate the implementation of such projects in accordance with their respective laws, and work together on both countries' interconnectivity for cross-border electricity trading.
The September 2023 MOU builds on existing Memoranda of Understanding inked by Singapore and Indonesia aimed at enhancing energy collaboration between the two countries for the benefit of the businesses and their citizens. These include the MOU on Renewable Energy Cooperation signed in March 2023, and the MOU on Energy Cooperation signed in January 2022.
On a related note, Singapore's Energy Market of Authority (EMA) announced that it has also granted Conditional Approvals ("CAs") to five projects to allow them to import a total of two gigawatts ("GW") of low-carbon electricity from Indonesia. The CAs will enable the companies managing the projects to obtain the necessary approvals and licences for their projects including the setting up of manufacturing plants for solar photovoltaics (PV) and battery energy storage systems (BESS) in Indonesia.
The September 2023 MOU brings Singapore a step forward towards achieving its target to import up to import up to four GW of low-carbon electricity by 2035. This supports the decarbonisation efforts of both Singapore and Indonesia, and will pave the way for businesses to explore new investment areas in renewable energy.
