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Overview and update on the National Electricity Market of Singapore (NEMS)Electricity Market of Singapore (NEMS)
Henry GanVice President, Market Operations
Energy Market Company
11
Agenda
Overview of the NEMSOverview of the NEMS• Market structure
• Market features
Update on the NEMS • Market developments
• Market performance
22
Overview of the NEMS
33
Drivers for electricity market reform
Singapore’s NationalNational
Energy Policy Framework
Increase economic
•Promote competitive markets
•Diversify Energy Supplies
Increase economic efficiency
Provide price signals
•Improve Energy Efficiency
•Build Energy Industry and Invest in Energy R&D
NEMSEncouraging innovation
Attract private investment
•Step Up International Cooperation
•Develop Whole-of-Government Approach
Providing consumer choice
44
Energy Market Company
• Formed in 2001 to take over operation of SEP and to implement NEMS
• Joint venture between Energy Market Authority (EMA)Joint venture between Energy Market Authority (EMA) and M-co
• NEMS commenced on 1 January 2003
• Market operator of NEMS
• EMC has a 10-year operator licence, and has secured another 10 year operator licence starting from 2013another 10-year operator licence starting from 2013
55
EMC’s role as Market Operator
Pricing and Scheduling
Market SurveillanceMarket Evolution
(Rules change)
Settlements and Market Clearing
Facilitator for
(Rules change)
Market Information
Dispute Resolutionand Education
66
Industry structure and players
Industry Regulator Power System Operator (PSO)Energy Market Authority (EMA)
Supply
Generators
Keppel Merlimau Cogen PowerSeraya Sembcorp Cogen
Senoko Energy Tuas Power Generation
Incinerator Plants NEA SNK WTE TUAS DBOO Market O
perE
nergy Market C
y
Incinerator Plants - NEA, SNK WTE, TUAS DBOO
EGs and small generators – Pfizer, ISK, GPA , MSD, Shell, Banyan, Soxal
Cons mers
PowerGrid
er R
eade
rL
–S
P S
ervi
ces
ratorC
ompanyD
eman
Consumers
Contestable ≥ 10 000kWh per month
Non-Contestable < 10,000kWh per monthvia Market Support Service Licensee (MSSL) – SP Services
Met
eV
ia M
SSL
IL nd
Contestable ≥ 10,000kWh per month
Via MSSL & Electricity RetailersKeppel Electric, Sembcorp Power, Senoko Energy Supply, Seraya Energy, Tuas Power Supply
77
Power flow via Power Grid
Interruptible Load (IL) via Wholesale Electricity Traders for ReservesAir Products, Diamond Energy
Location Map of NEMS Generators (Existing & Upcoming, excluding EG)
Electricity interconnectionwith Malaysia
Natural gas pipelinefrom Malaysia
Senoko Energy·▲
▲
▲ ▲▲
Keppel Cogen
▲ Represents incineration plants
Note: The Locations indicated on this map h b i t d d t li d Th
Tuas PowerGeneration PowerSeraya
SembCorpGMR
TuasSpring
LNG
88
have been approximated and stylised. They do not accurately represent the actual physical location of individual facilities
Embedded generators and small generators (below 10MW) are not depicted in this map.
Natural gas pipeline fromWest Natuna
Natural gas pipeline fromSumatra (Asamera)
LNG Terminal
Financial flow between market players
Contestable C t
Non- Contestable C t
R
Customers Customers
Electricity
Retail M
arket
Electricity Retailers MSSL
EMC
Who
Generators PSOWholesale Electricity
EMC
olesale MarketEMC
Financial flow
Traders
99
Financial flow via EMC
Market governanceg
Market GovernanceMarket GovernanceMarket Governance
Monitoring & Investigation
Dispute ResolutionRule ChangeRule Compliance & Anti competitive
Market Governance
Monitoring & Investigation
Dispute ResolutionRule ChangeRule Compliance & Anti competitive
Dispute Resolution
Market Rules Electricity Act
Rule Compliance & Market Efficiency
Anti-competitive Behaviour
Market RulesMarket Rules
Dispute Resolution
Market Rules Electricity Act
Rule Compliance & Market Efficiency
Anti-competitive Behaviour
Market RulesMarket Rules
Market Surveillance & Compliance Panel
(MSCP)
Dispute ResolutionCounsellor (DRC)
Disputes & Compensation Resolution Panel
Energy Market Authority (EMA)
Rules Change Panel (RCP)
Market Surveillance & Compliance Panel
(MSCP)
Dispute ResolutionCounsellor (DRC)
Disputes & Compensation Resolution Panel
Energy Market Authority (EMA)
Rules Change Panel (RCP)
Resolution Panel (DCRP)
Supported by Market Assessment Unit
Supported by Market Market data
provided by MAU Supported by MAU
Resolution Panel (DCRP)
Supported by Market Assessment Unit
Supported by Market Market data
provided by MAU Supported by MAU
10
(MAU)Administration provided by MAU(MAU)Administration provided by MAU
10
Features of the NEMS
• NEMS commenced on 1 January 2003
• Small compact well engineered system• Small, compact, well-engineered system
• Mandatory “real-time” price based model
• Offer only market with, IL being the only demand side y g yparticipation
• ½ hour trading periods with 65 minute gate-closure for d l tienergy, reserve and regulation
• Sophisticated nodal price system which models power flows, losses, constraints, co-optimising energy, reserves p g gyand regulations
• No formal forward/ financial derivative market yet• Reserve market open to interruptible load since 2004
1111
• Reserve market open to interruptible load since 2004
Features of the NEMS
• Thermal system (predominantly gas & fuel oil)
Fuel Mix for Electricity Generation (2010)
77%N t l G
17%
77%
Fuel Oil
Natural Gas
6%Others
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
1212Source: EMA, Others consist of synthetic gas, diesel and refuse incineration
Features of the NEMS
• NEMS dispatches on a merit order based on generation stack (economic efficiency) approach and is technologystack (economic efficiency) approach and is technology neutral
T o ta l d e m a n d P r ic e ($ /M W h ) ( )
6 0
8 0
1 0 0 T h e m a rk e t c le a rs a t th is p o in t
6 0
2 0
4 0
C le a r in g p r ic e = $ 5 0 /M W h
Q u a n t ity (M W )
- 2 0
0
M a rg in a l u n it
a b o v e
O f fe rs a b o v e th e c le a r in g p r ic e a re n o t a c c e p te d
O ffe rs b e lo w th e c le a r in g p r ic e a re a c c e p te d
C A
1313
C o m p a n y A C o m p a n y B C o m p a n y C
Features of the NEMS
• Market is structured to create:• competition among generation and retail companies• prices and incentives for efficient investment, production and
consumption decisions• Small and concentrated market with a high degree of vertical
integration (eight commercial generators)integration (eight commercial generators)• Vesting contracts in place to mitigate market power since 2004
(currently 60% of market vested) • Contestable consumers can choose to purchase from a retailer• Contestable consumers can choose to purchase from a retailer
(five active retailers)• Retailers pay for electricity purchased from the wholesale
market at a price known as the Uniform Singapore Energy Price p g p gy(USEP)
• Non-contestable consumers have a regulated electricity tariff, supplied by SP Services
1414
• Market settled daily (20 days in arrears)
Update on the NEMS
1515
Market developments
• Market Participant entrants and exits
• Market Rules Changes and EMA directives
• Single Electronic Window• Single Electronic Window
1616
Generator entrance & exits in 2011
MSDtook over Schering Plough’s EGs ≈ 9.6MW
GPAEG ≈ 8MW
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
IUTSmall incinerator ≈ 2MW Steam Turbine ≈ 250MW
Power Seraya
LegendIUT IUT Singapore Pte LtdEG Embedded Generator
1717
GPA Green Power Asia Pte Ltd MSD MSD International GMBH SG
Market Rules Changes
• In FY 11/12, a total of 7 Rule Change proposals was considered by the Rule Change Panel (RCP) as of 13 September 2011
• 2 were not supported by the RCP, and 5 were supported by the RCP
• The approved market rules changes are:
No Market Rules supported by the RCP in 2011No Market Rules supported by the RCP in 2011
1 Publication of Generation Registered Capacity by Facility
2 Removal of Requirement to Withdraw Market Advisory Notices
3 Review of Exemption to Allow Temasek Holdings Affiliates to be Concurrently Represented on the RCPConcurrently Represented on the RCP
4 Recovery and Refund of Reserve and Regulation Payments
5 Eligibility of Regulation Offers
18
Single Electronic Window
• SEW Phase I: On 26 May 2010, EMC launched its new website• SEW Phase II: On 08 Jun 2011 new features were introduced for• SEW Phase II: On 08 Jun 2011, new features were introduced for
the market participant section of the website• The key highlights in the rollout in Phase I are:
• New look and feel
• New functionality and features which include ticker with live trading data as well as charts
• User-friendly format allows easy access to new and existing content as well as trading reports and market information
• Online registration for EMC’s industrial training events and• Online registration for EMC s industrial training, events and data subscription
• Registered users are able to personalize their homepage thro gh a selection of a ailable information portlets
1919
through a selection of available information portlets
Single Electronic Window
• The key highlights in the rollout in Phase II are:
Si l i biliti• Single sign-on capabilities
• Dashboard
• Offer Management System
• Trading Portal which includes prices, settlements and advisory reports
• Trading information functionality includes• Trading information functionality includes
• Sorting, freezing of columns, filters
• Rolling over information on charts
• Drilling in chart capabilities
• Entire trading day view of search results
2020
Single Electronic Window
• EMC also launched its new LCD Dashboard which provides an overview of the current day and past seven days market informationy p y
2121
Single Electronic Window
• A snapshot of the dashboard for market participants in SEW
2222
Single Electronic Window
• A snapshot of the trading portal
2323
Single Electronic Window
• A snapshot of the trading portal
2424
Market Performance in 2011
2525
Market performance in 2011
• Small positive YOY demand growth
• Supply offer price in line with oil price increase
• USEP and contingency reserve price at record levels
Gas supply disruptions in June July August and September• Gas supply disruptions in June, July, August and September
• More efficient CCGT continues to dominate generation
• Electricity price increase is less than the increase in oil prices y p p
• CCGT getting more reliable
• More generating units responding better for reserves
• Keen competition in the generation and retail market
• First security constraint in NEMS applied in March
2626
Historical demand since 2003
Moderate demand growth of 3 4% per annum since 2003
5500
6000
MWModerate demand growth of 3.4% per annum since 2003
4500
5000
3500
4000
2500
3000
Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11
2727
YOY demand change
Small positive YOY demand growth in 2011 %
15%
20%
10%
15%YOY 2010 = 8.8%
5% YOY 2011 = 1.2%
Jun 10
Jul 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
Apr 11
May 11
Jun 11
Jul 11
Aug 11
Sep 11
Jan 10
Feb 10
Mar 10
Apr 10
May 10
0%
-5%
2828
Registered and Incoming Capacity
A potential of 3131 MW of new generation over the next 3 years
Registered Capacity Incoming Capacity
4000
MW
incoming 840M
in 2013
incoming 800M
Win 2013, 2014
incoming 220M
Win 2012
(9934MW) (2271MW)
incoming 411M
in 2014
incoming 860 M
in 2012
2000
2500
3000
3500
MW
WW WMW
31002640 2550
785 490500
1000
1500
2000
490 256.8 60 51.860
POW
ERSER
AYA
TUAS PO
WER
SENO
KOEN
ERG
Y
SEMBC
OR
PC
OG
EN
KEPPELM
ERLIM
AUC
OG
EN
INC
INER
ATION
EG >=10M
W
DG
< 10MW
GM
R
TUASPR
ING
29Incoming capacity is constructed from EMA figures, Registered capacity with NEMS as of 21 September 2011
EG Embedded Generation, excluding DG
DG Distributed Generators
Supply versus maintenance and demand
Supply following maintenance and demand
6,000
7,000
Demand/Supply (MW)
1,200
1,400
Maintenance (MW)
4,000
5,000
800
1,000Demand
2,000
3,000
400
600Supply (Energy offers)
0
1,000
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 20110
200 Maintenance
3030Maintenance figures compiled from AGOP dated 12 Oct 2011
Supply offer price in line with oil price movementmovement
Offer price pattern moving with trend in oil price US$/Barrel
80%
90%
100%
120
140
>=$400/MWh
50%
60%
70%
80
100
>=$200/MWh and <$400/MWh
30%
40%
50%
40
60 >= $100/MWh and < $200/MWh
< $100/MWh
0%
10%
20%
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 20110
20Brent S$/Barrel
3131Brent data from EIA
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011
Spot prices 2007/11
In 2011 (as of 30 September):
• Energy Price rose 29.9% at $222/MWh compared to 2010
• Primary Reserve Price fell to a record low at $0.37/MWh
S d R P i• Secondary Reserve Price fell by 48% to $2.69/MWh
• Contingency Reserve Price is at a record high ofPrice is at a record high of $19.32/MWh
• Regulation price fell by 14% to $65/MWh compared to 2010
3232
$65/ p 0 0
Gas disruptions in June 11 - September 11
Affected Planned / Remedial
Market Share (%)
dates Unplanned Cause Actions USEP CCGT ST GT
Jun 24 – 26 Jun PlannedORF
maintenance - $348/MWh 73.37 26.60 0.03
Jul 23 29 Jul Planned Gas curtailment $254/MWh 77 65 22 35 0 00Jul 23 – 29 Jul Planned Gas curtailment - $254/MWh 77.65 22.35 0.00
Aug 15 Aug UnplannedLightning
tripped ORFFuel
changeover $855/MWh 80.47 18.61 0.92
Sep 14 Sep UnplannedORF platform
shutdownFuel
changeover $243/MWh 77.80 22.20 0.00Sep 14 Sep Unplanned shutdown changeover $243/MWh 77.80 22.20 0.00
3333
Gas disruptions in June 11 - September 11
Jun gas Jul gas Aug gas Sep gas
45004000
4500disruption disruption disruption disruption
2500
3000
3500
/MW
h
1000
1500
2000
USE
P $
367.2491.71618.11
166.41162.67158.44220.960
500
1000
3434
Contingency reserve price duration curve
Prices above $1000/MWh: 9 times in 2011 and 3 times in 2010 pushing up yearly contingency reserve price
600
2011* 2010
Prices above $1000/MWh: 9 times in 2011 and 3 times in 2010, pushing up yearly contingency reserve price
Outliers above $600/MWh not
400
500
h
presented for better visibility.
200
300
$/M
Wh
Contingency reserve price curvein 2011, mostly above that in2010 for higher prices.
0
100
0.01% 11.00% 22.00% 32.99% 43.98% 54.98% 65.97% 76.97% 87.96% 98.95%
3535* 2011 data is until 30 Sep 2011
Interruptible load (IL) supply see decline across five quarters
IL offers decline steadily Q1 10 to Q1 11
across five quarters
14
16
18
7
8
9
ion
Primary Secondary Contingency Instance of IL Activation
10
12
14
apac
ity (M
W)
5
6
7
es o
f IL
Act
ivat
i
4
6
8
IL O
ffer C
a
2
3
4
Tot
al In
stan
c
0
2
Q107
Q207
Q307
Q407
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
Q310
Q410
Q111
Q211
Q311
0
1
07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11
3636
Regulation price cap instances
Regulation price at cap value of $300/MWh
180
200
Count Q1 Q2 Q3 Q4
120
140
160
60
80
100
0
20
40
2010 = 189 counts 2011 = 127 counts*
3737* 2011 data is until 30 Sep 2010
Comparison of market transactions 2007-20112007-2011
Energy payment for 2011 set to surpass the record set in the preceding years
8First to Third Quarter Fourth Quarter
02468
2007 2008 2009 2010 2011
Billio
ns ($
)
Reserve payment for 2011 moved up against 2010 but still below the level set in 2009
100
150
ons
($)
First to Third Quarter Fourth Quarter
0
50
2007 2008 2009 2010 2011
Milli
o
Regulation payment for 2011 remained below the level seen in 2010g p y
0
40
80
120
Milli
ons
($)
First to Third Quarter Fourth Quarter
3838
2007 2008 2009 2010 2011
USEP and oil price movements
USEP price increase is less than the increase in fuel oil price
1.8
Index
USEP Brent
1.4
1.6
1.0
1.2
0.6
0.8
Q1 10 (index base) Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 3Q11
3939
( )
Market share by plant type based on registered and scheduled generationregistered and scheduled generation
Market Share by Plant Type based onMarket Share by Plant Type based on y ypTotal Registered Capacity
34 9% 35.2%
4.5% 3.8% 3.0% 3.1% 3.8% 3.7% 2.9%3.0%GT 4.5%
80%
90%
100%
y ypScheduled Generation
32.3%24.9% 22.0% 21.0% 18.5% 18.5% 20.2% 19.5%
ST39 3%80%
90%
100%
48.0% 48.0% 46.0% 44.9% 45.1% 39.3% 34.9% 35.2%
ST56.1%
50%
60%
70%
80%39.3%
50%
60%
70%
80%
47.5% 48.1% 51.0% 52.0% 51.8% 56.9% 61.4% 62.0%
CCGT39 4%20%
30%
40%67.7%
75.0% 78.0% 79.0% 81.5% 81.5% 79.8% 80.5%
CCGT60.7%
20%
30%
40%
39.4%
0%
10%
2003 2004 2005 2006 2007 2008 2009 2010 20110%
10%
2003 2004 2005 2006 2007 2008 2009 2010 2011
4040* 2010 data is until 30 Sep 2010, GT market share by plant type for GT is 0.03% for 2005, 0.01% for 2006-2008, 2010-2011 and 0.02% in 2009
Generation reliability factor
CCGT failure probability improves over the last five quarters
0.080%
0 040%
0.060%
0.020%
0.040%
0.000%Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
4141
Reserve effectiveness group
EDCBAReserve Provider Group EDCBAReserve Provider Group
• Measures the performance of each generating and load registered
0.550.650.750.850.95Group Effectiveness 0.550.650.750.850.95Group EffectivenessMore responsive to reserve provision
• Measures the performance of each generating and load registered facilities following the actual system disturbance events or verification tests.
R i d t• Revised every quarter.
• This reserve effectiveness will affect the prices that each generating and load facilities get paid
• For instance, a generating facility with Class A will receive 95% of the cleared reserve price while a generating facility with Class E will only receive 55% of the cleared reserve price.
4242
Reserve effectiveness group
Better reserve response from generating units in 2011
18% 25 00% 14.29% 10.71%
14.29%11.11%
12%
15%11% 7.14% 10.71% 14.29%
7.14% 3.70%12%
4% 4% 3.57% 3.57% 0.00% 0.00% 0.00%
80%
90%
100%
E
12% 15%18%
21.43%28.57%
28.57%
25.00%
25.93%15% 19%
18% 25.00%
50%
60%
70% D
C
50% 46% 50%42 86% 42 86% 46.43%
53.57%59.26%
20%
30%
40%
50%
B
42.86% 42.86%
0%
10%
20%
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
A
4343
Competition in generation
Generation market share2007 t 2011*2007 to 2011*
25.68%26.43%27.62%29.71%
24.75%
28.44%27.16%25.41%27.68% 27.08%
25.21%24.32%24.27%24.51%
27.47%40%Senoko Energy
PowerSeraya
20%
30%PowerSeraya
Tuas PowerGeneration
SembCorp Cogen
9.61%
8 25%10%
20%
Incineration Plants
Keppel MerlimauC
2.56%
8.25%
0.25%0%2006 2007 2008 2009 2010 2011 2012
Cogen
EmbeddedGenerators
4444* Data is until 30 Sep 2011
Competition in the retail market
Retail market share2007 t 2011*
Retail market share2007 t 2011*2007 to 2011*
40%
50%SP Services
S k E
2007 to 2011*
16 36%
22%Senoko EnergySupply
37.28%
30%
40% Senoko EnergySupply
Tuas Power Supply
12.44%
16.36%
16.08%
12%
17% Tuas Power Supply
Seraya Energy
10%
20%Seraya Energy
SembCorp Power6.88%
10.96%
7%
12% y gy
SembCorp Power
0%
10%
2006 2007 2008 2009 2010 2011 2012
Keppel ElectricLess concentration of market share amongst retailers2%
2006 2007 2008 2009 2010 2011 2012
Keppel Electric
4545* Data is run on 06 Oct 2011, where available settlement data for WEQ is up to 19 Sep 2011
EMC Services
• EMC Training programme “Understanding Electricity Markets”• Two-day training course, conducted quarterly
• Overview of electricity markets with a focus on the unique features of the NEMSfeatures of the NEMS.
• The course combines expertise from engineering, economics and regulatory perspectives to convey the fundamentals of
l t i it k t th d tielectricity market theory and practice.
• Data Subscription Service• Provides access to real-time market data and to the daily,
weekly and monthly reports, which provide updates on the performance of the NEMS with commentaries.
4646
performance of the NEMS with commentaries.
Thank you
For more information, please contact:
[email protected]@emcsg.com
+65 6779 3000www.emcsg.com
4747
