Budget 2025: Government to reorganise for greater focus on nuclear energy, build new capabilities

• Government to reorganise for greater focus on nuclear energy capabilities
• S$5 billion top-up to Future Energy Fund
• S$5 billion top-up to Coastal and Flood Protection Fund

While Singapore has not yet decided whether to deploy nuclear power to meet its energy needs, the government has enhanced its focus on this low-carbon source of electricity, said analysts.

They were responding to the government’s plans to reorganise for “greater emphasis” on building nuclear capabilities, as Finance Minister Lawrence Wong stated in his Budget speech on Tuesday (18 Feb).

“This reorganisation reflects a proactive approach to thoroughly assess the feasibility of integrating nuclear energy, particularly small modular reactors (SMRs), into Singapore’s energy landscape,” said Lee Poh Seng, executive director of the Energy Studies Institute at the National University of Singapore.

SMRs are advanced nuclear reactors with a smaller power capacity which supposedly have better safety and economic aspects than conventional nuclear power plants.

Singapore had previously said it was looking into potentially using nuclear power, such as SMRs, in its strategy to decarbonise its energy sector.

This is part of wider plans to achieve the country’s 2050 target of net zero carbon emissions.
 

Wong, who is also prime minister, said on Tuesday that the city-state is still studying its potential deployment.

Given the need for new capabilities to evaluate nuclear options and assess if they can be deployed in a safe and cost-effective manner, the government will reorganise itself to provide greater emphasis on this, he added.

Victor Nian, founding co-chair of the Centre for Strategic Energy and Resources, noted: “Singapore would need to take a whole-of-government approach in preparation towards a potential future with nuclear energy deployed in the country.”

He added: “The reorganisation would allow Singapore to more efficiently pool resources together to help advance our understanding of suitable nuclear power technologies.”

Prof Lee said that this reorganisation signifies a strategic commitment to diversifying the Republic’s energy portfolio.

Starved of renewable energy resources, the country announced a strategy in 2022 to develop low-carbon hydrogen as a viable energy source.

However, PM Wong acknowledged on Tuesday that there are challenges in making low-carbon hydrogen production commercially viable. While the government said in 2010 that conventional nuclear power was not suitable for Singapore, significant advancements have been made since then, and the technology is gaining more interest globally, including from neighbours Malaysia and Indonesia.

To help fund the deployment of clean energy technology, which could include nuclear power, Budget 2025 includes a doubling of the Future Energy Fund to S$10 billion.

The fund was set up in Budget 2024 with an initial capital of S$5 billion to support infrastructure investments for Singapore’s energy transition.

Prof Lee said that the new S$5 billion injection could help fund critical infrastructure for hydrogen and nuclear energy, as well as offer financial support to mitigate the high costs and uncertainties associated with emerging energy technologies.

Besides measures to reduce emissions, Budget 2025 included a S$5 billion top-up to the Coastal and Flood Protection Fund.

The fund was formed in 2020 – also seeded with S$5 billion – to protect Singapore against rising sea levels and enhance flood resilience.

PM Wong said that the country is looking at various solutions, from sea walls to barrages, as part of climate adaptation efforts.
 

Source: The Business Times © SPH Media Limited. Permission required for reproduction.