Evolution in the National
Electricity Market of Singapore
Allan H. Dawson
Chief Executive Officer
Energy Market Company, Singapore
1
Agenda
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Reform Milestones
Singapore an earlier adopter
Why the NEMS?
Industry Structure
Market Design
NEMS Performance
Future Evolution
2
Reform Milestones
1995
Singapore Power formed, Oct 1995
1998
Wholesale electricity pool commenced, Apr 1998
1999
Government review of electricity industry, Sep 1999
2000
Government decision on further deregulation, Mar 2000
PHB Hagler Bailly (later PA Consulting) designs wholesale market, Aug 2000
2001
Energy Market Authority formed, Apr 2001
Energy Market Company formed, June 2001
2002
2003
New Electricity Market commenced on 1 Jan 2003
Planned
All consumers contestable, 2003 / 2004
3
Singapore an early adopter
Singapore Electricity Pool
 Singapore Electricity Pool (SEP) was a costbased day-ahead market
 Designed in 1994, SEP was implemented in
1998
 International thinking on market design
progressed significantly between design and
implementation
 SEP was a useful way of transitioning to a
more dynamic and complex market
4
Why the NEMS?
 Designed to promote the supply of
competitively priced electricity
 Open up the retail market to full competition
 Allow certain government assets to be
privatized
 Encourage private investment in Singapore’s
power system infrastructure
5
Industry Structure
Senoko
Power Ltd
Tuas
Power Ltd
Power
Seraya Ltd
NEA
SembCorp
Regulator
Electricity
Retailers
• Keppel FELS
Power Grid
Ltd
•
•
•
Non-Contestable
Customers
System
Operator
Contestable
Customers
•
Energy
Supply Pte
LTd
SembCorp
Power Pte Ltd
Senoko
Energy
Supply Pte
Ltd
Seraya
Energy Pte
Ltd
Tuas Power
Supply Pte
Ltd
Market
Operator
(EMC)
Electricity
Retailers
Power
Supply Ltd
6
Industry Structure
TENAGA
NASIONAL
BERHAD
SENOKO
PS
Senoko PS:
• Total Installed Capacity = 2,655 MW
• Authori sed Generation Capacity = 3,300 MW
• No. of Combined Cycle Plants = 3
• No. of Steam Units = 5
• No. of Gas Turbine s = 2
• Total no. of Units = 10
Tuas PS:
• Total Capacity Installed = 1,934 MW
• Authori sed Generation Capacity = 2,670 MW
• No. of Combined Cycle Plants = 2
• No. of Steam Units = 2
• Total no. of Units = 4
Seraya PS:
• Total Installed Capacity = 3,100 MW
• Authori sed Generation Capacity = 3,100 MW
•No. of Combined Cycle Plants = 2
• No. of Steam Units = 9
• No. of Gas Turbine Units = 4
• Total no. of Units = 15
TUAS
PS
JURONG
ISLAND
SEMBCORP
COGEN
SERAYA
PS
SembCorp Cogen:
• Total Installed Capacity = 785 MW
• Authori sed Generation Capacity = 900 MW
• No. of Combined Cycle Plants = 2
(Some data are extracted from EMA Brochure, Mar 02)
7
Market Design
NATIONAL ELECTRICITY MARKET OF SINGAPORE
Regulatory
Framework
Electricity Act
text
EMA
Market Rules
Market Codes
Wholesale
Market
Legend
Generation Companies
Financial Flows
Energy Flows
PSO
PowerGrid
Dispatch Information
Retail
Market
Retail
Companies
Contestable
Customers
SPL - Default
Supplier
Direct Market
Participants
Non-Contestable Customers
8
Market Design
 Real-time market spot market for energy,
regulation and 3 classes of reserve
 Mandatory participation
 Cooptimization between energy, reserve and
regulation
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Market Design
 Ex ante pricing
 Locational marginal (nodal) prices at 33
injection nodes and 350 off-take nodes
 Generators receive nodal spot price
 Customers pay Uniform Singapore Electricity
Price
 Daily settlement
10
NEMS Performance
 Competitive pressure in the energy, reserve
(most notably) and regulation markets
 Prices move with fundamentals (oil prices,
generator outages etc)
 Increasing dominance of gas-fired generation
 Stakeholders appear satisfied with the first 10
months of operation
11
NEMS Performance
Wholesale Energy Prices
$/MWh
180
NEM ($/MWh) for 2003
SEP ($/MWh) for 2002
7 Day Mov. Avg. (NEM ($/MWh) for 2003)
7 Day Mov. Avg. (SEP ($/MWh) for 2002)
160
140
120
100
80
60
40
20
0
1- 8- 15- 22- 29- 5- 12- 19- 26- 5- 12- 19- 26- 2- 9- 16- 23- 30- 7- 14- 21- 28- 4- 11- 18- 25- 2- 9- 16- 23- 30Jan Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr Apr Apr Apr Apr May May May May Jun Jun Jun Jun Jul Jul Jul Jul Jul
Trading date
12
NEMS Performance
Wholesale Reserve Prices
($ Mil)
3,000,000.00
SEP Reserve Cost
7 Day Mov. Avg. (SEP Reserve Cost)
NEM Reserve Cost
7 Day Mov. Avg. (NEM Reserve Cost)
2,500,000.00
2,000,000.00
1,500,000.00
1,000,000.00
500,000.00
0.00
18- 15- 22- 29- 5- 12- 19- 26- 5- 12- 19- 26- 2Jan Jan Jan Jan Jan Feb Feb Feb Feb Mar Mar Mar Mar Apr
9Apr
16Apr
23Apr
30- 7- 14- 21- 28- 4- 11- 18- 25Apr May May May May Jun Jun Jun Jun
2Jul
9Jul
16Jul
23Jul
30Jul
13
NEMS Performance
Dominance of gas-fired generation
SEP Generation Composition (Jan to Jul 2002)
NEMS Generation Composition (Jan to Jul 2003)
3% (OTHERS)
3.0% (OTHERS)
38.8%
ST
37.7%
ST
CCGT
CCGT
59.4%
58.2%
Source: Energy Market Company Pte Ltd
Source: Energy Market Company Pte Ltd
14
Further Evolution
 Market rules change panel has supported
over 100 rules changes
 Most changes were in preparation for market
commencement to make the rules workable
 EMC administers the rules change panel
 Critical that the market continues to evolve so
that ‘big bang’ implementations are avoided
15
Further Evolution
 Key market design issues likely to be
considered in the next 2 years
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Interruptible load participation in the reserve
market
Market re-settlement
Transmission planning and augmentation
Financial transmission rights
16
Summary
 Singapore has come a long way in the
liberalisation of its electricity market
 Evolution is important as NEMS performance
directly impacts on Singapore’s economy
 Singapore will remain at the forefront of
market reform
 EMC is excited to play a key role in the
evolution and success of the NEMS
17