Statute Details
- Title: Electricity (Electricity Generation Licence) (Exemption) (No. 2) Order
- Act Code: EA2001-OR2
- Legislative Type: Subsidiary Legislation (SL)
- Authorising Act: Electricity Act (Cap. 89A), section 8
- Citation: G.N. No. S 515/2003 (Revised Edition 2004)
- Commencement / Current Version: Current version as at 27 Mar 2026
- Key Provisions: Section 1 (citation); Paragraph 2 (exemptions from section 6(1)(a) of the Electricity Act)
- Most Recent Amendment Noted in Extract: S 340/2018 with effect from 1 Jun 2018
What Is This Legislation About?
The Electricity (Electricity Generation Licence) (Exemption) (No. 2) Order is a Singapore subsidiary instrument that creates specific exemptions from the licensing requirement for electricity generation under the Electricity Act. In plain language, it identifies certain categories of electricity generators who do not need to hold a generation licence, even though the general rule in the Act requires licensing for generation activities.
The Order is particularly focused on small-scale generation and certain market-facing or operationally constrained generation. It uses objective technical thresholds—such as name-plate ratings (in megawatts, “MW”)—and connectivity conditions—such as whether the generating unit is connected to the transmission system. It also addresses standby generation used only for backup power, and it includes an exemption framework for certain participants trading in the wholesale market under the Enhanced Central Intermediary Scheme.
For practitioners, the practical significance is that the Order reduces regulatory burden for qualifying generators, but it does so with carefully drafted conditions. Whether an entity is exempt can turn on technical facts (rating, connectivity, standby use) and commercial facts (market participant status, licence status under section 6(1)(f), and trading structure).
What Are the Key Provisions?
1. Citation (Paragraph 1)
Paragraph 1 provides the short title: the Order may be cited as the “Electricity (Electricity Generation Licence) (Exemption) (No. 2) Order”. This is standard legislative housekeeping, but it also helps practitioners locate and reference the instrument in submissions, compliance checklists, and regulatory correspondence.
2. Core exemption: Section 6(1)(a) of the Electricity Act (Paragraph 2)
The heart of the Order is paragraph 2. It states that section 6(1)(a) of the Electricity Act shall not apply to specified persons. Section 6(1)(a) is the licensing provision that generally requires a generation licence for persons who engage in electricity generation. The exemption therefore operates as a carve-out: if a person falls within one of the listed categories, they are not required to obtain a generation licence for the relevant generating activity.
3. Exemption for very small generating units (Paragraph 2(1)(a))
Under paragraph 2(1)(a), the licensing requirement does not apply to any person who engages in generation by means of a generating unit with a name-plate rating of less than 1 MW. This is a straightforward threshold exemption. In practice, lawyers advising clients with embedded generation (for example, on-site generation for industrial premises) will need to confirm the unit’s name-plate rating and ensure the generation activity is indeed performed by that unit.
4. Exemption for mid-sized units not connected to the transmission system (Paragraph 2(1)(b))
Paragraph 2(1)(b) exempts persons generating using a unit with a name-plate rating of 1 MW or more but less than 10 MW, provided the unit is not connected to the transmission system. This introduces two cumulative conditions: (i) the rating must fall within the specified band, and (ii) the unit must not be connected to the transmission system. The “not connected” requirement is critical; a unit that is connected to the transmission system would not qualify under this limb and may instead fall for consideration under other exemptions (or require a generation licence).
5. Exemption for certain connected units where the generator is a market participant or a qualifying licence holder (Paragraph 2(1)(c))
Paragraph 2(1)(c) is more complex and is designed to address a particular wholesale market trading structure. It covers persons who engage in generation using a unit with a name-plate rating of 1 MW or more but less than 10 MW that is connected to the transmission system. However, the exemption applies only if the person is either:
- (A) a market participant; or
- (B) a holder of an electricity licence for the purpose of section 6(1)(f) of the Act that trades indirectly in the wholesale electricity market under the Enhanced Central Intermediary Scheme.
This provision effectively links generation exemption to the entity’s role in the market and its regulatory status. A practitioner should therefore treat paragraph 2(1)(c) as a “role-based” exemption: the technical threshold (1–10 MW and connected to transmission) is necessary but not sufficient. The entity must also satisfy one of the specified status conditions.
6. Exemption for standby generating units used solely for backup power (Paragraph 2(1)(d))
Paragraph 2(1)(d) exempts persons who engage in generation using a standby generating unit that meets two conditions:
- (i) it is used solely to provide backup power in the event of interruption of electricity supply from the transmission system; and
- (ii) it is not connected to and not operated in parallel with the transmission system.
This is a functional exemption aimed at ensuring that backup generators do not become de facto grid-connected generation assets requiring licensing. The “solely” and “not operated in parallel” requirements are particularly important. If a standby unit is used beyond emergency backup—such as for regular generation, peak shaving, or continuous operation—it may fall outside the exemption. Similarly, if the unit is configured to run in parallel with the transmission system, the exemption would not apply.
7. Definition of “Enhanced Central Intermediary Scheme” (Paragraph 2(2))
Paragraph 2(2) defines the “Enhanced Central Intermediary Scheme” as the scheme implemented by the Authority under which a holder of an electricity licence for the purpose of section 6(1)(f) sells to the wholesale electricity market electricity that:
- (a) is generated using a generating unit located on premises owned by a contestable consumer; and
- (b) is not consumed at the premises.
This definition matters because paragraph 2(1)(c)(ii)(B) relies on the scheme. Lawyers should therefore confirm not only that the entity holds the relevant licence under section 6(1)(f), but also that the trading arrangement fits the defined scheme mechanics: generation on contestable consumer premises, and sale to the wholesale market of electricity that is not consumed at those premises.
How Is This Legislation Structured?
The Order is structured in a simple format with:
- Paragraph 1 setting out the citation; and
- Paragraph 2 containing the substantive exemptions from the licensing requirement in section 6(1)(a) of the Electricity Act.
Paragraph 2 is further divided into multiple exemption limbs (2(1)(a) to 2(1)(d)), followed by a definitional provision in paragraph 2(2) for the Enhanced Central Intermediary Scheme. The extract indicates that the Order has been amended (notably by S 340/2018 effective 1 June 2018), which is reflected in the inclusion of the Enhanced Central Intermediary Scheme definition and the related exemption limb.
Who Does This Legislation Apply To?
The exemptions apply to “any person” who engages in electricity generation by means of specified generating units and who satisfies the relevant conditions. “Person” in this context is typically understood broadly to include legal entities (such as companies) and potentially other capable entities, but the operative question is whether the entity is the one “engaging in the generation” using the qualifying unit.
In practical terms, the Order applies to generators across different categories: (i) small generators under 1 MW; (ii) mid-sized generators between 1 and under 10 MW that are not transmission-connected; (iii) mid-sized generators between 1 and under 10 MW that are transmission-connected but only if the generator is a market participant or a qualifying section 6(1)(f) licence holder trading under the Enhanced Central Intermediary Scheme; and (iv) standby backup generators that are not connected to, and not operated in parallel with, the transmission system.
Why Is This Legislation Important?
This Order is important because it directly affects whether an entity must obtain a generation licence under the Electricity Act. For regulated businesses, the licensing question is not merely administrative: it can influence market access, compliance obligations, reporting duties, and the ability to contract for electricity supply or participate in market arrangements.
From an enforcement and compliance perspective, the Order’s exemptions are conditional. A generator that assumes it is exempt based on name-plate rating alone may be mistaken if the unit is connected to the transmission system (for the 1–10 MW band) or if the unit is operated in parallel with the transmission system (for standby units). Similarly, for the Enhanced Central Intermediary Scheme-related exemption, the entity’s regulatory status and trading structure are decisive. Lawyers advising clients should therefore treat the exemption as a fact-intensive legal assessment rather than a blanket rule.
Finally, the Order reflects the regulatory policy of calibrating licensing requirements to risk and market impact. Small and standby generation can be exempted because it is unlikely to create the same systemic or market participation concerns as larger, transmission-connected generation. At the same time, the Order preserves licensing oversight where generation is more integrated with the transmission system or where market trading arrangements require alignment with the wholesale market framework.
Related Legislation
- Electricity Act (Cap. 89A) — in particular section 6(1)(a) (generation licensing requirement) and section 8 (authorising provision for exemption orders).
- Electricity Act — section 6(1)(f) (licensing for purposes relevant to the Enhanced Central Intermediary Scheme).
- S 340/2018 — amendment to the Order with effect from 1 June 2018 (as reflected in the extract).
Source Documents
This article provides an overview of the Electricity (Electricity Generation Licence) (Exemption) (No. 2) Order for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.