Keppel to develop S$750 mn hydrogen-ready power plant in Singapore
Keppel Infrastructure Holdings, through its wholly owned subsidiary Keppel Energy, has reached final investment decision (FID) to develop a 600MW advanced combined cycle gas turbine (CCGT) power plant, and has awarded an engineering, procurement and construction (EPC) contract to a consortium comprising Mitsubishi Power Asia Pacific and Jurong Engineering for the construction of the plant. To be built in the Sakra sector of Jurong Island, the Keppel Sakra Cogen plant will be the first hydrogen-ready power plant in Singapore.
In line with Keppel’s asset-light business model, the Keppel Sakra Cogen Plant will be owned by Keppel Sakra Cogen Pte. Ltd, presently a wholly-owned indirect subsidiary of Keppel Infrastructure.
It is intended that Keppel Asia Infrastructure Fund LP (KAIF) and Keppel Energy will hold 70% and 30% equity interests in KSC respectively. In addition, KSC and Keppel Energy are scheduled to enter into a turnkey contract for the development of the Keppel Sakra Cogen plant, with a total investment expected to be around S$750 million.
Running initially on natural gas as primary fuel, the Keppel Sakra Cogen Plant is also designed to operate on fuels with 30% hydrogen content and has the capability of shifting to run entirely on hydrogen. In addition, as a CCGT power plant, it will be able to produce steam, for use in industrial processes for the energy and chemicals customers on Jurong Island.
Expected to be completed in 1H 2026, the plant is said to be “the most cutting-edge and energy efficient power plant in Singapore, which will translate into superior performance, such as lower emission intensity and higher operation flexibility”.
It will be able to save up to 220,000 tonnes/year of CO2 as compared to Singapore’s average operating efficiency for equivalent power generated. Such savings in CO2 equivalent translates to taking about 47,000 cars off the road per year.
A long-term service (LTS) contract for major maintenance of the turbine was also awarded to Mitsubishi Power Asia Pacific.
With the energy sector accounting for almost 40% of Singapore’s carbon emissions, decarbonising electricity generation is at the core of the global climate change effort and one of the key features of Singapore’s Green Plan.
In addition to the EPC and LTS contracts, Keppel New Energy Pte Ltd, a wholly owned subsidiary of Keppel Infrastructure, also signed a memorandum of understanding (MOU) with Mitsubishi Heavy Industries to carry out a feasibility study on the development of a 100% ammonia-fuelled power plant on a selected site in Singapore. This collaboration seeks to address the energy trilemma and contribute to building a more resilient and sustainable energy sector in Singapore and the region.
The FID on the Keppel Sakra Power Plant as well as the MOU on 100% ammonia-fuelled combined cycle power plant are aligned with Keppel’s Vision 2030, which places sustainability at the core of the company’s strategy.
“Singapore’s electricity demand is projected to grow with increasing electrification and economic growth. As such, the Energy Market Authority welcomes investments by the private sector to bring in best-in-class technologies in power generation. Being hydrogen-ready, this power plant by Keppel will contribute towards greater efficiency and lower carbon emissions. This will support Singapore’s transition to a more sustainable energy future while ensuring the security and reliability of electricity supply to consumers,” said Ngiam Shih Chun, Chief Executive, EMA.
Osamu Ono, Managing Director/CEO of Mitsubishi Power Asia Pacific, commented, “Mitsubishi Power looks forward to supplying the Keppel Sakra Cogen Plant with our hydrogen-ready JAC gas turbine. The plant will enjoy the unmatched combination of world-class efficiency and proven reliability backed by abundant operation hours of the fleet worldwide, T-Point 2 grid-connected combined cycle power plant verification facility located at Takasago Hydrogen Park in Japan, and our extensive experience with power generation using hydrogen-rich fuel for over half a century. As an innovative low and zero-carbon fuel, there is immense potential for hydrogen to be used in power generation systems to enable emissions reduction. It is our honour to partner with Keppel Infrastructure, a visionary in the energy sector, to achieve our aligned net zero vision and build a sustainable energy future for Singapore.”
The abovementioned developments are not expected to have any material impact on its earnings per share and net tangible asset per share of Keppel Corporation Limited, the parent company of Keppel Capital and Keppel Infrastructure, for the current financial year.
