Singapore’s ambitious plan to reduce its dependence on natural gas through cross-border low-carbon electricity imports is facing significant regulatory, financial and infrastructure challenges, according to a new analysis by Wood Mackenzie. Despite approving 9.25 GW of low-carbon electricity import capacity across six corridors, imported electricity is projected to account for only 15% of the country’s generation mix by 2035, substantially below the Energy Market Authority’s (EMA) target of approximately one-third.
The findings were published in Wood Mackenzie’s latest report, Green Electrons Are Waiting to Cross the Border to Singapore: 2026 Update, which examines the progress and commercial viability of regional electricity import projects.
Singapore currently relies on natural gas for approximately 95% of its electricity generation, while limited land availability restricts the development of large-scale domestic renewable energy projects. As a result, EMA’s target of importing 6 GW of low-carbon electricity represents a central component of the country’s long-term decarbonisation strategy.
However, Wood Mackenzie noted that none of the projects within the approved 9.25 GW pipeline has entered construction, raising concerns about the feasibility of meeting the country’s electricity import targets.
Wei Han Tan, Research Analyst for Southeast Asia Power and Renewables Research at Wood Mackenzie, identified export permitting regulations, project financing, cross-border transmission infrastructure and the absence of a comprehensive carbon certification mechanism as major barriers to project implementation.
Meanwhile, Singapore continues to strengthen its conventional power generation capacity to maintain electricity supply reliability. EMA’s September 2026 request for proposals increased the number of planned hydrogen-ready combined-cycle gas turbine units for 2032 from two to five, alongside 600 MW of gas-fired capacity already approved for 2027 and 2029.
The development indicates that natural gas will continue to play an important role in Singapore’s electricity system as the country balances rising power demand with its transition towards cleaner energy sources.
Indonesia Accounts For 37% Of Approved Pipeline But Faces Regulatory Challenges
Indonesia represents approximately 37% of Singapore’s approved low-carbon electricity import pipeline, with six projects receiving Conditional Licences confirming their technical and commercial feasibility.
However, progress has been constrained by regulatory uncertainty surrounding electricity exports. Under Clause 37 of Indonesia’s 2021 electricity regulation, export permits must be renewed every five years and may be revoked if domestic electricity supply becomes insufficient.
Wood Mackenzie noted that these conditions create significant financing risks for projects requiring long-term investment commitments of approximately 20 years.
Indonesia’s 40% local content requirement presents an additional challenge, particularly because Singapore’s firm-power import standards require large-scale battery energy storage systems (BESS). Meeting these requirements could necessitate substantial domestic battery manufacturing capacity before projects can proceed.
The absence of agreed electricity pricing, long-term offtake contracts and commercially viable revenue structures has also prevented projects from reaching final investment decisions.
A potential development emerged in July 2026 when Indonesia’s sovereign wealth fund, Danantara, was designated to lead cross-border electricity trade with Singapore. The organisation subsequently signed memoranda of understanding with Keppel Electric, Sembcorp Utilities and SGEI.
Government Regulation No. 24/2026, which directs strategic commodity exports through a Danantara subsidiary, could provide a possible framework for addressing export permit concerns. However, its applicability to electricity exports remains uncertain.
Malaysia Emerges As Most Viable Near-Term Import Corridor
Malaysia is currently considered Singapore’s most promising route for receiving low-carbon electricity imports before 2030, primarily because of existing cross-border transmission infrastructure.
The Malaysia–Singapore interconnector provides up to 1 GW of bidirectional electricity transfer capacity, reducing dependence on new transmission infrastructure and avoiding some of the supply chain constraints affecting other regional projects.
In August 2026, EMA approved 900 MW of electricity imports from Johor, including 300 MW allocated to Sembcorp Utilities for floating solar and battery storage development and 600 MW allocated to Ditrolic Energy’s Southern Solar Alliance.
The latter project is supported by BlackRock’s Climate Finance Partnership and the International Finance Corporation (IFC).
Wood Mackenzie indicated that Sembcorp’s 300 MW project could begin initial electricity deliveries by 2029 using existing infrastructure.
However, delivering the remaining 600 MW may require a second interconnector, which remains under feasibility assessment. This could delay full-scale imports beyond 2030.
For longer-term electricity imports, Malaysia’s Sarawak corridor offers a comparatively stronger outlook. A Preferred Supplier Agreement signed with Prysmian in October 2025 provides greater certainty regarding subsea cable availability, supporting a potential commercial operation timeline in the mid-2030s.
Vietnam, Cambodia And Australia Face Longer Development Timelines
Vietnam, Cambodia and Australia collectively represent approximately 43% of Singapore’s approved electricity import capacity. However, projects across these corridors remain at the Conditional Approval stage, with no publicly confirmed construction schedules.
In Vietnam, the absence of a regulatory framework allowing foreign developers to construct dedicated generation facilities and export electricity through subsea transmission cables remains a major obstacle.
Although Decree 272, introduced in July 2026, opened Vietnam’s offshore wind sector to foreign investment, electricity export arrangements and cross-border transmission regulations remain unresolved.
Cambodia has also recorded limited publicly visible progress over the past three years. The country lacks a comprehensive electricity export framework and faces domestic power supply constraints, further complicating plans to develop electricity exports to Singapore.
Australia’s proposed Sun Cable Australia–Asia Power Link faces infrastructure and regulatory challenges of a different nature.
Approximately 3,700 kilometres of the project’s proposed 4,500-kilometre transmission route passes through Indonesian territorial waters. While survey approval was granted in 2025, the authorisation does not permit subsea cable installation.
Wood Mackenzie expects these corridors to make limited contributions to Singapore’s electricity imports before the second half of the 2030s.
Electricity Pricing And Carbon Certification Remain Critical Barriers
Beyond regulatory approvals and transmission infrastructure, the commercial competitiveness of imported electricity remains a major consideration.
Imported low-carbon power must compete with Singapore’s Uniform Singapore Energy Price, currently estimated at approximately S$250/MWh, while domestic natural gas generation already incorporates carbon tax costs.
Developers must also establish commercially viable electricity supply agreements that provide sufficient long-term revenue certainty to attract financing.
Another unresolved issue involves the development of a certification framework that would allow electricity buyers in Singapore to claim the environmental benefits associated with imported low-carbon electricity.
According to Wood Mackenzie, successful projects will need to secure an EMA Importer Licence, demonstrate the ability to supply firm electricity at an annual load factor of at least 60%, and offer commercially acceptable long-term electricity prices.
Wei Han Tan noted that no project within the current approved pipeline has successfully fulfilled all three requirements.
The findings highlight the gap between Singapore’s approved low-carbon electricity import capacity and the volume likely to become operational over the coming decade.
While regional renewable energy resources offer significant opportunities to diversify Singapore’s electricity supply, Wood Mackenzie indicated that regulatory coordination, financing certainty, transmission infrastructure development and commercially viable pricing mechanisms will be essential to translating approved projects into operational capacity.
With Malaysia emerging as the strongest near-term supply corridor and larger projects in Indonesia, Vietnam, Cambodia and Australia facing extended development timelines, Singapore’s progress towards its electricity import targets will depend heavily on resolving cross-border regulatory and investment challenges.
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