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Speaking at the Energy Market Authority (EMA)’s Energy Innovation event yesterday (20 Sep), Senior Parliamentary Secretary for Trade and Industry and Foreign Affairs Dr Tan Wu Meng said that the blackout in Singapore this week has brought home the importance of energy security.
“Very recently, we felt the importance of energy security and energy resilience in a very real way when electricity supply was disrupted to many Singaporean homes in the early hours of Tuesday morning,” said Dr Tan.
“I was up late that night, after meeting some of my residents. I saw the social media updates coming in around 1.30am – that was a few minutes after the blackout occurred,” he said. “I also saw the many emails and WhatsApps from the EMA team, which were working very hard throughout the night, responding, looking into what happened.”
The authority is continuing its investigations into the incident.
Singapore key power assets sold to foreign entities
Since 2008, Temasek has been selling away Singapore power assets as part of Temasek’s “divestment” efforts.
For example, in 2008, Temasek sold away Tuas Power to China’s Huaneng Group for S$4.2 billion, the largest overseas purchase by a Chinese power firm.
Temasek got a very good deal out of the Chinese as Huaneng’s winning bid which worked out to about 24 times the S$177 million net profit Tuas earned in FY2007.
Tuas Power had been reported to have a generating capacity of 2,670MW at the time of sale.
Later in September that year, Temasek sold its Senoko Power generating company to Lion Power Holdings for S$3.65 billion. Lion Power Holdings is a consortium led by Japan’s Marubeni Corporation. Other members of the consortium are GDF Suez of France, The Kansai Electric Power Company, Kyūshū Electric Power Company and Japan Bank for International Cooperation.
At the point of sale, Senoko provides over 30 per cent of the nation’s electricity needs. Till today, it remains the largest power generation company in Singapore.
Finally, at the end of 2008, Temasek sold off Singapore’s PowerSeraya Ltd to Malaysia’s YTL Power International Bhd with the plant valued at S$3.8 billion.
The PowerSeraya plant was the second largest power generation company in Singapore in terms of installed capacity, with a total licensed capacity of 3,100MW, representing about 25% of Singapore’s total licensed generation capacity at the time of the sale.
DBS Bank even provided S$2.25 billion of credit facilities to YTL Power to fund their purchase.
Australia blocks foreign acquisitions of critical infrastructure over security concerns
Meanwhile, Australia has been increasingly restricting sale of the country’s critical infrastructure to foreign entities due to security concerns.
Two years ago, for example, it blocked the sale of Ausgrid, the country’s biggest energy grid, to two Chinese companies over security concerns. Then Australian Treasurer Scott Morrison officially rejected the bid by the two firms to buy a 50.4% stake in Ausgrid. He commented that selling the grid to foreign investors would be against the national interest.
“After due consideration of responses from bidders to my preliminary view of 11 August 2016, I have decided that the acquisition by foreign investors under the current proposed structure of the lease of 50.4% of Ausgrid, the New South Wales electricity distribution network, would be contrary to the national interest,” he told the media.
“This is consistent with the recommendation from the Foreign Investment Review Board.”
However, China Commerce Ministry hit back saying, “This kind of decision is protectionist and seriously impacts the willingness of Chinese companies to invest in Australia.”
PM Lee supports UN’s rule against China over South China Sea issue
Australia has been raising its concerns and objections over what it perceived as “China’s militarization” over the South China Sea islands and so has Singapore.
Two years ago at the National Day Rally, PM Lee said publicly that Singapore must have its own principled and consistent stand on the South China Sea issue despite pressure from other countries to side with them.
He said that Singapore must support and strive for a “rules-based international order” and depends on words and treaties. “They mean everything to us.”
He added that Singapore, as a small nation, cannot afford to have international relations work on the basis that might is right. “If rules do not matter, then small countries like Singapore have no chance of survival,” he said.
Earlier Philippines had launched a case against China under the United Nations Convention on the Law of the Sea (UNCLOS), after which a Tribunal ruled against China saying that its South China Sea’s claim was incompatible with UNCLOS. However, China has rejected the Tribunal’s jurisdiction.
Hence, PM Lee’s support of UN Tribunal’s ruling went against the interests of China in South China Sea and China has on a few occasions voiced its unhappiness over the issue. One such expression of its unhappiness is the detention of Singapore’s Terrax tanks at Hong Kong.
In view of the fact that some of Singapore’s critical infrastructure assets like power plants were sold off to the hand of Chinese and Malaysia entities where the countries may express their unhappiness in various ways, Dr Tan’s opinion about the importance of energy security and energy resilience is made somewhat contradictory.