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Retail Competition for
Electricity Supply in Singapore
18 Oct 16
2
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
3
Co-Confidential
Presentation Outline
Singapore Electricity Market
Electricity Supply
Singapore Regulatory Framework
Retail Competition
4
Co-Confidential
Singapore Electricity Market
5
Co-Confidential
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
6
Co-Confidential
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
7
Co-Confidential
Generation Transmission &
Distribution
Retail
Who are the Different Players?
(Managing Agent)
Billing & Market Support
Retailers
8
Co-Confidential
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
9
Co-Confidential
Electricity Supply
10
Co-Confidential
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
11
Co-Confidential
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%
12
Co-Confidential
Singapore Regulatory Framework
13
Co-Confidential
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
14
Co-Confidential
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
15
Co-Confidential
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
16
Co-Confidential
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
17
Co-Confidential
Retail Competition
18
Co-Confidential
National Electricity Market
Electricity
Pool
Gencos bid
half-hourly to
sell
MSSL
Non
Contestable
Consumers
MSSL
Contestable
Consumers
Contestable
Consumers
Retailers
19
Co-Confidential
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
20
Co-Confidential
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
21
Co-Confidential
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
22
Co-Confidential
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%
23
Co-Confidential
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%
24
Co-Confidential
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
25
Co-Confidential
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
26
Co-Confidential
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