Challenges to Investment
Renewable Energy Certificates (RECs) are tradable instruments that allow corporates and individuals to transfer the property rights and environmental attributes of renewable energy generation without the need to trade physical energy. A REC is created for each megawatt-hour (MWh) of renewable electricity generated and delivered to the grid.
While REC transactions grew in the mid to late-2010s, the REC market in Singapore faced several challenges in its early stages. The process of acquiring and selling RECs was complex, with many hidden costs involved. The market was still in its infancy, with changes in regulations or demand and supply causing significant price volatility. Prices were not fully transparent, with most trades done over-the-counter. Without a clear framework, there was a lack of consistency and credibility in the issuance, tracking and usage of RECs in Singapore.
Approach
To address these challenges, Singapore introduced Standard (SS) 673: Code of Practice for Renewable Energy Certificates (SS 673) in 2021. The new standard provides a clear REC framework and improves the integrity of measurement, reporting, and verification requirements for REC issuance and management. It creates guidelines surrounding the roles of REC ecosystem stakeholders, procurement modes for RECs, the verification of renewable energy installations, and public reporting requirements for REC issuance and retirement. Despite the lack of explicit timelines from the government, the introduction of a comprehensive standard supported consistent REC transactions and management, catalysing the continued growth of clean energy projects.
Key Enabling Conditions
Experts suggest that RECs can play a role in the transition to renewable energy in Southeast Asia, but should be combined with other measures such as power purchase agreements and direct investments in renewable energy projects. SS 673 was intended to create consistency in the REC production and management process in Singapore, and it is likely that other REC tracking systems wishing to serve the Singapore market will conform to these rules.
Impact / Outcomes
The SS 673 standard helped synchronise the two existing standards – International RECs Standard Foundation (I-RECs) and Trade Instrument for Global Renewables (TIGR) – and aimed to harmonise costs for issuing and managing RECs, promoting clean energy development in Singapore. As of July 2022, over 32 MW of installations had been registered under the I-RECs standard in Singapore, primarily solar. I-RECs-registered installations generated and issued over 0.16 million RECs between 2015 and July 2022. Conversely, the TIGR standard had more installations than I-RECs as of 2021, amassing over 745 MW of cumulative total installations. TIGR-registered installations issued over 1 million RECs between 2015 and July 2022, accounting for 86% of the cumulative total issuance.
Additional Sources
- International Energy Agency, “Energy Statistics Data Browser: Singapore”, 21 December 2023, https://www.iea.org/data-and-statistics/data-tools/energy-statistics-data-browser?country=WORLD&fuel=Energy%20supply&indicator=TESbySource
- International Renewable Energy Agency, “Energy Profile: Singapore (2023)”, https://www.irena.org/-/media/Files/IRENA/Agency/Statistics/Statistical_Profiles/Asia/Singapore_Asia_RE_SP.pdf
- https://www.ema.gov.sg/news-events/news/media-releases/2021/new-singapore-standard-launch-to-support-management-and-use-of-renewable-energy-certificates
- https://sbr.com.sg/utilities/news/sembcorp-rolls-out-renewable-energy-certificate-platform
- https://www.mti.gov.sg/Newsroom/Speeches/2021/10/Speech-by-2M-Tan-See-Leng-at-the-Asia-Clean-Energy-Summit