Singapore’s ambitions to be a smart nation and an artificial intelligence (AI) hub could be threatened by one foundational challenge: energy. From electric vehicles (EVs) to AI-intensive data centres, the technologies driving Singapore’s next economic leap are proving to be voracious electricity consumers.
EV demand alone will require about 1 terawatt-hour (TWh) of power by 2030, equivalent to about 2% of Singapore’s total projected electricity use. This is expected to balloon to 5TWh by 2040, requiring at least 1 gigawatt (GW) of additional capacity. AI workloads exacerbate the demand further, with plans already in place to add 500 megawatts (MW) of data centre capacity in the near term, potentially tripling to 1.5GW in the longer run.
Moreover, semiconductor and biopharmaceutical manufacturing sectors — pillars of Singapore’s “new age” economy — account for 40% of industrial power consumption. Morgan Stanley Research forecasts industrial power demand to grow at a 4% CAGR, outstripping overall national power consumption by 20% as new factories come online.
The heightened digitalisation across industries amplifies the economic stakes. Spain’s widespread power outage on April 28 was estimated to cost its economy millions, underscoring how digital infrastructure cannot afford downtime. For Singapore, diversifying beyond imported natural gas is not just a sustainability measure, but also crucial for economic security.
Nuclear revival
Despite its controversial past, nuclear power has resurfaced as a serious contender in the energy mix to sustain Singapore’s economic future.
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“Nuclear energy appears as quite a logical option looking forward [for Singapore given its land constraints and lack of hydropower, but] it is a decision for Singaporeans to make,” Rafael Mariano Grossi, director-general of the International Atomic Energy Agency (IAEA), told local media on July 26.
The United Nations nuclear watchdog chief dismissed fears of unmanageable risk. “Any technology — and nuclear is not an exception — entails risk [so countries need to] manage those risks and reduce them to the bare minimum. [By having proper] precautionary measures, there won’t be a problem [of deploying nuclear] even within a limited geographical space,” he says. Singapore’s advanced radiation-monitoring capabilities, he adds, would allow real-time radiation detection and rapid response, meeting the “severe safety preconditions” that every new nuclear programme must satisfy.
Singapore’s domestic assessments align with this stance. A 2022 report by the Energy Market Authority (EMA) mentioned that nuclear energy could potentially supply about 10% of Singapore’s energy needs by 2050. While no deployment decision has been made, the city-state has been steadily building capability.
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It most recently launched the Singapore Nuclear Research and Safety Institute (SNRSI), backed by an additional $66 million grant from the National Research Foundation (NRF) research, innovation and enterprise 2025 plan. This builds on the republic’s decade of nuclear safety research and talent development efforts.
SNRSI’s primary focus includes reactor safety, nuclear policy, radioactive particle dispersion, biological impacts of radiation and rapid detection of elevated levels of radioactivity. It will also partner with international laboratories on reactor simulation and modelling. “This will enable it, over time, to build capabilities to assess aspects of the safety of small modular reactor designs and their suitability for domestic deployment,” NRF chairman Heng Swee Keat said at the SNRSI launch on July 11. These capabilities would also inform risk assessments for radioactive releases from potential regional deployment.
Heng adds that SNRSI has joined the IAEA’s research programme on managing used nuclear fuel and waste from different small modular reactor (SMR) technologies, as “waste management will likely be a critical factor for public support for domestic nuclear deployment”.
SMRs will be key to Singapore’s plan should it go ahead with nuclear. Unlike traditional 1,000MW nuclear reactors, SMRs have a smaller power capacity of up to 300MW, can be delivered in modules and assembled on-site, require much smaller exclusion zones and incorporate passive safety features.
“We have not excluded [nuclear]... because there is a lot of promise for some of the advanced [small] modular reactors – the physics, the engineering, the technical feasibility, all point to the fact that they are possible, but it is just that commercially, they are still not viable yet,” Minister Tan See Leng told The Straits Times in an interview on July 21.
Hydrogen: Singapore’s green bet
Hydrogen represents another strategic bet for Singapore’s energy diversification, potentially covering up to half of its electricity needs by 2050. Hydrogen emits no carbon dioxide when combusted and is genuinely sustainable if produced using renewable energy (to qualify as green hydrogen).
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Yet, Singapore’s limited renewable energy resources constrain its ability to produce green hydrogen locally. Importing green hydrogen over long distances is costly too, as it must be transported at cryogenic temperatures of around –253°C.
Recognising these constraints, Singapore is investing $43 million into scalable hydrogen technology projects under its Directed Hydrogen Programme. This includes the use of ammonia as a carrier, which is relatively stable and can be transported at ambient temperatures. It can be combusted directly for power or “cracked” to extract hydrogen, though the latter requires high temperatures.
Complementing that, Singapore is building out its energy value chain from upstream liquefied natural gas (LNG) terminals (including floating storage regasification units or FSRUs) to downstream power plants designed for hydrogen flexibility. The first of these next-generation gas plants is expected to be operational in 2026. Existing plants may also be retrofitted with new gas turbines that could “extend asset lifespans and improve investment returns as hydrogen technology scales globally”, according to the Morgan Stanley Research analysts.
For instance, YTL PowerSeraya, a wholly-owned subsidiary of Bursa-listed YTL Power International, is building a 600MW hydrogen-ready combined cycle gas turbine (CCGT) facility on Jurong Island. Upon completion in 2027, just one of YTL PowerSeraya’s CCGTs will be able to produce three to 4TWh of electricity, enough to power half of Singapore’s households. By using GE Vernova’s 9 high-efficiency air-cooled (9HA.01) gas turbines, the plant could combust up to a 50% blend of hydrogen and natural gas as feedstock. It can also be retrofitted to achieve 100% hydrogen-readiness in the future.
Reinforcing LNG Leadership
Amid a broader global pivot toward cleaner fuels, Singapore is ramping up efforts to solidify its status as a key trading hub in Asia. The city-state hosts 60 LNG trading firms, managing over US$240 billion ($309 billion) in trade flows annually, significantly surpassing domestic needs.
To keep pace with surging regional demand, Singapore is expanding its infrastructure across the LNG value chain. It plans to double its storage capacity to almost 0.8 million tonnes (around 1.5 million cubic meters) and boost regasification capacity by 50% to 15 million tonnes per annum (MTPA). A new FSRU, built by South Korea’s Hanwha Ocean, will be berthed at Jurong Port to enhance system flexibility in meeting future gas needs.
At the same time, Singapore is scaling up LNG bunkering to support the maritime industry’s shift to cleaner fuels. Singapore LNG expects bunkering demand to exceed 2–3 MTPA by 2035, or about 20% of terminal capacity.
Morgan Stanley Research analysts view Singapore as a key regional LNG hub providing infrastructure for trading and bunkering. “Key beneficiaries could include Seatrium, given its LNG carrier repairs and upgrades business, as well as DBS, OCBC, and UOB, providing trade financing support. SGX [Singapore Exchange] may also ultimately benefit by expanding its commodity and freight product offerings, although this is expected to be a medium-term opportunity,” they wrote in a June 23 report.
Modernising the grid
Singapore is exploring all possible options in its energy transition to ensure its energy needs are met in a sustainable, resilient and cost-effective way, says Minister Tan. “We will explore every single pathway, every single possibility, and... make sure it is cost-effective and sustainable.”
The government is, therefore, injecting an additional $5 billion into its New Energy Fund to support the buildout of critical infrastructure. Morgan Stanley analysts believe the fund will be used for cross-border grid projects that enable clean electricity imports and domestic upgrades to manage a more complex and diversified energy system.
As Singapore transitions to a low-carbon future, its power supply mix will rely more heavily on variable sources like domestic solar and imported renewables. This shift introduces new challenges to grid stability, particularly during extended periods of low renewable generation or peak demand. At the same time, the growing adoption of distributed energy resources (DERs) —including rooftop solar, battery energy storage systems, and EV chargers — is making the grid more decentralised and dynamic.
To address this complexity, Singapore is investing in energy storage and delivery (ESD) systems and integrated energy management systems (IEMS). ESD systems serve as physical storage buffers that absorb excess energy when renewable generation is high and discharge it during lulls. IEMS platforms act as smart controllers, monitoring demand and supply in real time, coordinating ESD usage, and balancing load through techniques such as peak shaving and valley filling.
Several foundational technologies are being rolled out in tandem. For example, EMA and SP Group are developing a grid digital twin and distributed resource management systems to improve planning and integrate decentralised assets. Virtual power plants will also coordinate distributed energy resources islandwide to function as a unified generator, helping stabilise the grid and manage demand fluctuations.
Ultimately, Singapore’s strategy to overcome its energy challenge will determine the viability of its Smart Nation and AI aspirations. How effectively it executes on its nuclear readiness, hydrogen roadmap, LNG upgrades and grid modernisation will shape not just energy resilience, but also the country’s long-term economic trajectory.
