Retail Competition for

Electricity Supply in Singapore

18 Oct 16

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Co-Confidential

Singapore Power Group

Australia

Singapore PowerGas

SP PowerGrid

SP AusNet (31%)

Australia

Operations

Singapore

Operations

SP Services

SGSP (Australia)

Assets (40%) SP PowerAssets

Total Assets: S$16B Singapore District

Cooling

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Presentation Outline

Singapore Electricity Market

Electricity Supply

Singapore Regulatory Framework

Retail Competition

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Singapore Electricity Market

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SP in the Electricity & Gas Value Chain

Single player Vertically

Integrated

Single player Private

Generation

Multiple

players

Transmission Line Terminal Station Terminal Station

Power/Gas Transmission Network

Power Generation /

Gas Importation

Power/Gas Distribution

Network

Supply/ Retail

Merchant

Market

Multiple

players

Single entity

(Regulated Returns)

Multiple

players

SP own and operate the Electricity and Gas networks

Government ownership Private ownership

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Singapore Electricity Market Structure

Competitive sectors separated from monopoly sector

Energy Market Company (Wholesale market operator)

Competitive Gencos

(wholesale market) Regulated Grid

Company

Competitive Retailers

(contestable market)

Energy Market Authority (Regulator & system operator)

Generation Transmission &

Distribution (T&D) Retailing

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Generation Transmission &

Distribution

Retail

Who are the Different Players?

(Managing Agent)

Billing & Market Support

Retailers

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Industry Restructuring

Pre-1995 1995

• Water

• Gas (Town gas/ gas

T&D)

• Electricity Generation

• Electricity T&D

• Retail

• Water

• Regulator

Public Utilities Board

(PUB) PUB

• Gas (Town gas/ gas

T&D)

• Electricity Generation

• Electricity T&D

• Retail

Present

Generation

Companies

Retailers

• Electricity and Gas T&D

• Market Support Services

EMA

(Regulator)

Gas

Electricity Generation

Electricity & Gas Retail

Natural gas import

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Electricity Supply

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Electricity Network System

Low Tension Network 400/230 Volts

Low Tension Consumers

230kV Network

66kV Network

22kV and 6.6kV Network

400kV Network

Electricity Transmission & Distribution Assets of ~$9B

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Transmission and Distribution Losses

LV Network

Pool Meter

22kV Network

Upstream

6.6kV Network

22kV Sales

6.6kV Sales

LV Sales

22kV Injection

TFL230/22kV, TFL66/22kV

TFL22/6.6kV

TFL6.6kV/LV TFL22kV/LV

T&D Losses = Injection – Sales ~ 3%

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Singapore Regulatory Framework

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Legislative Framework

Licences

Codes

Regulatory

Agreements

• Generation

Licence

• Wholesale

Licence

• Retail Licence

• Transmission

Licence

• Transmission

Agent Licence

• MSS Licence

Transmission

Code

Market Support

Services Code

Metering Code

Regulated Supply

Services Code

Retailer’s Code of

Conduct

Examples

•Generation Connection

Agreements

•Consumer Connection

Agreements

•MSSL-PowerGrid Services

Agreement

Market Rules

Electricity Act

SP Group’s obligations

Examples

• System

Operation

• Market

Operation

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Unbundled Tariff (LT-Small)

Energy

Cost Mkt Admin

& PSO Fee

Network

Charge

MSS

Fee Total

Bundled

Tariff

(LT-Small)

~70.1%

We earn our revenue

from network charge

~27.7%

~1.9% ~0.3%

Singapore Tariff Composition

As of 1 Oct 16

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Network Charge Computation

+ = X + + +

Market returns to our

investors and lenders

Salaries, maintenance,

other expenses, etc

Network charge = Regulated Revenue _

(¢/kWh) 5-year Sales Volume Forecast

Value of existing assets

+ new capex ~ $6B

Our efficiency gains are

shared with consumers

Regulated

Revenue

WACC

Regulated

Asset Base

Operating

& Maint. Exp Deprec’n

Incentive

Payment Tax

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Regulatory Reset Cycle

2nd Reset 3rd Reset 4th Reset 1st Reset

Tariff components determined by regulator once every 5 years

SP submits to

EMA

5Y Biz Plan

“Reset

Proposal”

EMA reviews

and approves

Regulated

Revenue

SP sets network

and MSS charges

and obtains EMA

approval

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Retail Competition

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National Electricity Market

Electricity

Pool

Gencos bid

half-hourly to

sell

MSSL

Non

Contestable

Consumers

MSSL

Contestable

Consumers

Contestable

Consumers

Retailers

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Introduction to SP Services

Installation

Metering

Consolidated Billing

Payment Collection

Customer Services

Debt Management

1-Stop Service

Regulated

Business

Non-regulated

Business

• Market Support Services

Licensee

• Supplier for Non

Contestable Consumers

• Billing and Collection Agent

Provides convenient and cost-efficient customer service

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Role of Market Support Services Licensee

MSSL Issue & Settle

Vesting Contracts

Provide Meter File

for Wholesale

Settlement

Read Wholesale

Meters Daily

Purchase

Wholesale Electricity

at Spot Prices

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Customer

Number as

at 31 Mar

16

Sales

Volume

FY15/16

(%)

Example of Customers

Ultra High

Tension 1 1%

Large industrial customers

e.g. ExxonMobil

Extra High

Tension 46 19%

Large industrial customers

e.g. SMRT, ST Micro, GlobalFoundries

High Tension

Large 700 37%

Large industrial customers

e.g. Tech Semicon, Sumitomo Chemical

High Tension

Small 600 5%

Small industrial customers

e.g. PUB, MINDEF

Low Tension

Large 26,200 12%

Small-Medium Enterprises

e.g. NTUC Fairprice, KFC, Town Council

Low Tension

Small 1.46 million 26%

Households & Small Businesses

e.g. Hawkers, retail shops

Total 1.48 million 45,453GWh -

The Customers We Serve

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Electricity Consumption Profile

Non Domestic Domestic

Monthly Total Consumption:

3,860 GWh

(675 GWH)

17%

83%

(3,185 GWH)

No of Accounts:

1.5M

(133,000)

(1369,000)

91%

9%

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Consumer Consumption

Contestable Consumers Non Contestable Consumers

Monthly Total Consumption:

3,860 GWh

(1,000 GWH)

25%

75%

(2,860 GWH)

No of Accounts:

1.5M

(35,000)

(1467,000)

(1467,000)

98%

2%

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Jul 2001 Jan 2003 Dec 2003 Dec 2006 Oct 2014

Consumer

with

contracted

capacity of

2MW

44 Consumers

Consumers

taking HT

and EHT

278

Consumers

HT

Consumers

LT

Consumers

Consumption

20,000kWh

About 5,000

Consumers

HT

Consumers

LT

Consumers

Consumption

10,000kWh

Another 4,000

contestable

consumers

HT

Consumers

LT

Consumers

Consumption

4,000kWh

Another

70,000

contestable

consumers

HT

Consumers

LT

Consumers

Consumption

2,000kWh

Another

16,000

contestable

consumers

Jul 2015

Being

Studied

(2017/2018)

Remaining 1.5

million LT

Consumers

Retail Contestability

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Full Retail Contestability

Retailer A

Retailer B • Enables remaining 1.5m consumers to buy electricity

from retailer of their choice

o Smart meters to be installed for non-residential

o Load profiling to be used for settlement for residential

• Small contestable consumers allowed to return to

non-contestable status buying electricity at tariffs

• SPS to continue providing metering & billing services

& acting as default supplier for non-contestable

consumers

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