Power to the People
A $20 billion renewable energy corridor connecting Australia and Singapore looks likely to proceed after Singapore’s Energy Market Authority deemed the project technically and commercially viable according to the operator, Australia’s SunCable. The company’s Australia-Asia Power Link plans to send 1.75gW of renewable electricity to Singapore via a 4,300km submarine cable. This equates to around 9% of Singapore’s current consumption.
The rapid development of AIDCs (Artificial Intelligence Data Centres) is set to be a particularly important swing factor in the rate of growth of global electricity demand. With that in mind we were extremely interested by a recent Jefferies note comparing power tariffs (in USD/kwh) around the world. Qatar ($0.04, gas), Iceland ($0.07, geothermal) and Russia ($0.08 gas) have some of the lowest tariffs thanks to abundant domestic resources.
In stark contrast Italy ($0.58), Poland ($0.53), the United Kingdom ($0.43) and Singapore ($0.34) need to import the raw materials or purchase electricity from their neighbours. Of course it is not always the price that matters, the resilience of supply is also a critical factor. This explains, in part, the increasing interest in small nuclear reactors.
Malaysia ($0.12) is in prime position to assist Singapore. For a start Malaysia has 40% excess power capacity (circa 15gW). It also has acres of cheap land, adequate water resources and is adjacent to Singapore. That said, the Germans and Poles might warn against becoming reliant on one supplier!
Relations between Singapore and Malaysia have had their moments going back all the way to the break away of Singapore in 1965.
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