The global energy crisis continues to worsen with its latest victim Singapore. Power prices in the Southeast Asian country saw a dramatic surge in wholesale power prices.
According to Bloomberg, provisional Uniform Singapore Energy Price jumped S$4,499 ($3,293) per megawatt-hour, the highest on record or about a 1,290% jump in the last few days. Just on Tuesday, prices were S$323.61 ($236.60).
The dramatic price increase in wholesale power reflects the persistent global energy crisis. It doesn't help when 95% of the country's electricity is generated by burning natgas. All of the natgas is imported from neighboring countries.
With the Northern Hemisphere winter just weeks away, Singapore's electricity prices are likely to remain elevated as natgas demand continues to strengthen across Europe and the rest of Asia, due in part to La Nina conditions producing unseasonably colder trends.
There's word that limited gas supply from Indonesia has already resulted in turbine trips, or emergency shutdown of power generation turbines, at some Singapore power plants.
Julius Wiratno, deputy for operations at Indonesia oil and gas regulator SKK Migas, told Bloomberg that gas flows from Indonesia to Singapore are at "minimum demand levels" as supply is limited.
"Almost all of the independent retailers were forced out of the market, leaving a significant number of consumers previously on fixed price tariffs at the mercy of the spot market," Whistler said.
Singapore has resorted to bringing back combined-cycle gas turbine capacity in the event of more turbine trips to mitigate a collapse of its power grid.
A spike in power prices might not have a tremendous impact on households, considering a majority of them are under fixed-rate contracts. Still, it could unleash pain for companies that tend to be on variable contracts.
Considering Singapore's power grid is mostly powered by natgas, we suspect this is not the last we'll hear about soaring power prices as winter fast approaches. We first noted the energy crisis was going globale back in September.