Singapore Market Briefing
London Economics, September 2007
The Singapore market briefing provides a concise overview of the country power sector, providing up to date information on regulation, generation, transmission, market operation, distribution, and retail supply; a list of market participants in each market segment is provided as well as a list of useful websites.
- Singapore
- Macro Economics Indicators
- Electricity Sector Statistics
- Useful Links
- Singapore Snapshot
- Generation
- Transmission & Market Operation
- Distribution & Supply
- Singapore’s electricity sector restructuring began in 1995 with reorganization and unbundling of Public Utility Board
- Singapore Electricity Pool was created in 1998 to introduce wholesale electricity competition through day-ahead market
- IPPs started operating in 2000
- In 2001, Energy Market Authority (EMA) was established as regulator, and Energy Market Company was formed to manage the Singapore Electricity Pool; ownership of state owned generation assets is separated from transmission and distribution; 250 very large consumers became eligible to choose their own suppliers
- New National Electricity Market opened in 2003; electricity is traded on spot basis
- Government currently owns directly and indirectly most of the assets in the sector; privatization of three generation companies (PowerSeraya, Senoko Power, Tuas
Power) will begin in 2007
- EMA is in charge of overseeing the privatization process
- Establishment of an electricity futures market is part of EMA’s strategic plan
GENERATION
- 6 companies actively engage in generation
- SembCorp Cogen was first IPP in Singapore, a subsidiary of SembCorp Industries; Temasek Holdings controls 50% of the parent
- Tuas Power, Senoko Power and PowerSeraya were fully owned by
Temasek Holdings (Government of Singapore investment company)
- National Environment Agency runs 251 MW waste incineration plant
- Keppel Merlimau Cogen (subsidiary of Keppel Corporation – 21% controlled by Temasek Holdings) with 500 MW capacity (0.1% share) was operational in April 2007
- Island Power (owned by InterGen, acquired by AIG and Ontario Teachers’ Pension Plan) will be first private generator with 785 MW CCGT operational in 2009
- Keppel Seghers will complete 24 MW incineration plant by 2009
- Competition forced generation companies to use more natural gas (from 19% in 2000 to 78% in 2006)
- Recently reviewed Singapore Green Plan 2012 encourages cleaner energy source (natural gas) and exploration of renewable energy (solar, biomass)
TRANSMISSION & MARKET OPERATION
Transmission and distribution network is owned by SP PowerAssets Co., while management and operation of the network is executed by SP PowerGrid
Co.; both companies are part of Singapore Power, a corporation wholly owned by state-owned Temasek Holdings
- Transmission rates are regulated by EMA; efficiency gains are passed on to
consumers; average transmission charge in 2007 was US$2.32 cents/kWh
- Transmission interconnection exists with Malaysia’s Tenaga Nasional Bhd, however, EMA caps imports at 600 MW; counterparties required to use similar market rules to Singapore
- Sellers in the market submit half-hourly bids and system calculates weighted average price to be paid by buyers
- The maximum price was caused by a gas supply disruption in December 2006 that led to energy shortfall and load shedding
- Vesting contracts are temporarily imposed by EMA on 3 largest generators, forcing them to sell 55% of total demand at long-run marginal cost of the most efficient technology (CCGT) that accounts for at least 25% of total demand, thus curbing market power and forcing cost-efficient supply; the contracts are voluntary for other small generators
DISTRIBUTION & SUPPLY
Electricity distribution is managed by
SP PowerGrid
- Three retailers are subsidiaries of the generation companies; other retailers owned by the same parent companies as their related generation companies
- Eligible customers (minimum monthly consumption of 10,000 kWh) may buy electricity from retailers and wholesale market, but not directly from generation companies
- Ineligible customers and those eligible customers that choose not to buy electricity from retailers are supplied by SP Services at regulated rates (see table), normally reviewed quarterly
- 11,000 consumers (equivalent to 60% of total consumers or 75% of sales) are currently eligible to choose their own suppliers; competition for the remainder is deferred while EMA explores ways to reduce implementation cost
- EMA’s pilot project on Electricity Vending System that enables retailers to post supply pricing schemes at various point-of-sale and thus saves cost is expected to be completed by 2009
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