Regulation of Power Sector in Singapore - Development and Current Practices

Transcription

1 Regulation of Power Sector in Singapore - Development and Current Practices 10 th Capacity Building Program for Officers of Electricity Regulatory Commissions Presenter: Rachel Su, Deputy Director (Market Development and Surveillance Department) 17 Oct 2016

2 Agenda Introduction to EMA Energy Landscape Future Developments Electricity Market Design and Regulatory Framework 2

3 Energy Market Authority (EMA) is the lead agency for energy matters in Singapore Power Systems Operator Ensure a reliable and secure energy supply Industry Developer Industry Regulator Develop a dynamic energy sector Promote effective competition 3

4 SINGAPORE S ENERGY LANDSCAPE 4

5 Balancing Singapore s energy challenges 5

6 Singapore s energy landscape Natural gas is the dominant fuel source 95% for power generation in Singapore and is used in several industry applications. Beyond natural gas, Singapore is also exploring alternative energy options to diversify our energy mix. Solar energy, which remains the most promising renewable energy source, makes up less than 1 % of total electricity generation for Singapore today. 6

7 Decision to import LNG to meet our strategic objectives of energy security and price competitiveness 1 Flexibility to import from multiple sources and access competitively priced gas from global markets Singapore LNG supplies PNG supplies Trinidad & Tobago Nigeria Egypt Equatorial Guinea Qatar Malaysia Indonesia, South Sumatra Indonesia, West Natuna Australia, Queensland Reference: 2 Enhances competition in the electricity market 3 Places Singapore in a favourable position to be the natural gas hub for Asia and support growth of LNG ancillary services in Singapore 4 Environmentally Cleaner Fuel due to its lower carbon intensity compared with other fossil fuels 7

8 PNG GAS NETWORK LNG Singapore s 1 st LNG terminal was commissioned in May 2013 LNG Receiving / Regasification Terminal Liquefied Natural Gas (LNG) Piped Natural Gas (PNG) Boil off compressors Current Terminal Operations/ Services Booster compressors Main Operations Receiving Reloading Regasification Boil-off Gas (BOG) recovery Consumption (End-users) Flare Boil off recondensers HP LNG pumps Auxiliary systems Control and safety systems Power Generation Unloading arms LP LNG pumps Sea water open rack vaporisers or submerged combustion vaporisers Send-out to gas network Ancillary Services Vessel cooldown Storage and send-out Storage and reload (e.g. Break bulk) Cold Energy Utilisation Services Home usage (Town Gas) LNG cargo Potential Growth Areas LNG Bunkering Industrial usage 3 8

9 Building ahead of demand to widen our strategic options Continued expansion of our existing terminal to enhance our energy security and allows buyers to access spot cargoes when the price is right. Forward looking terminal design to allow for the development of ancillary services such as break-bulk, LNG bunkering and cold energy integration. 9

10 SINGAPORE S ELECTRICITY MARKET DESIGN AND REGULATORY FRAMEWORK 10

11 Singapore s market liberalisation journey Electricity and gas undertakings of PUB was corporatised Separated at ownership level competitive functions of Generation/Retail from Transmission/Distribution EMA was set up as an referee for the sector. EMC became the operator and administrator of the wholesale electricity market. Kickstarting Liberalisation 2003 Asia s First Liberalised Electricity Market Reining in Market Power 2001 Boosting Consumer Choice Promoting The Market National Electricity Market of Singapore opened for trading Vesting Contracts introduced to mitigate the exercise of market power of generation companies. 6 Gradual opening up of the retail electricity market since Eligible consumers can choose different price packages. 11

12 Singapore s electricity market design 12

13 Market clearing mechanism Price ($/MWh) 80 The market clears at this point Total demand Clearing price = $40/MWh 20 0 Quantity (MW) -20 Offers below the clearing price are accepted Marginal Unit Offers above the clearing price are not accepted Company A Company B Company C 13

14 7 major generators & other small generators 1 grid operator 18 electricity & SP retailers Services 2,609, 19% 3,100, 23% Total Licensed Generation Capacity of 13,405 MW Q ,189, 9% 1,340, 10% 3,300, 25% 800, 6% 396, 3% 1,067, 8% 257, 2% 414, 3% Market Share for Electricity Generation (%) 21% 20% 18% 12% 11% 9% 10% 21% 22% 18% 10% 12% 8% 9% 26% 24% 27% 10% 8% 6% 0% 20% 40% 60% 80% 100% Senoko Energy YTL PowerSeraya Tuas Power Generation SembCorp Cogen Keppel Merlimau Cogen PacificLight Power Tuaspring Waste-To-Energy Embedded Generation Tuas Power Generation Senoko Energy YTL PowerSeraya SembCorp Cogen Keppel Merlimau Cogen PacificLight Power Others 14

15 7 major generators & other small generators 1 grid operator 18 electricity & SP retailers Services Market Share for Electricity Retail(%) % 14% 13% 13% 12% 12% 0.3% 6% % 14% 15% 13% 8% 13% 4% % 15% 10% 6% 17% % 16% 12% 7% 11% % 16% 14% 16% 6% 11% 0% 20% 40% 60% 80% 100% SP Services Seraya Energy Senoko Energy Supply Tuas Power Supply SembCorp Power Keppel Electric PacificLight Energy Hyflux Energy Pte Ltd CPvT Energy Asia Pte Ltd 15

16 Regulatory roles Competitive Sector (Power Generation Companies and Electricity Retailers) Clear and transparent regulatory regime Rely on market signals Ensure level playing field Monopoly Service Providers (Grid Operator, Market Support Services and Wholesale Market Operator) Regulate revenue of monopolies Incentivise efficient behaviour Low barriers of entry Open access 16

17 Competitive Sector Addressing the issue of market power In the electricity generation and retail businesses, companies compete with one another at competitive prices for dispatch and customers. However, there are three large generation companies who can exercise market power and raise electricity price. Vesting Contracts was introduced to mitigate their ability to exercise market power. Spot Market Electricity Price ( Spot Price ) Financial Payments for Vesting Genco Receives Genco receives spot price for quantity sold into physical spot electricity market + Genco makes difference payment Spot Price Vesting Price Genco receives difference payment = Combination of physical spot electricity market and financial payments for vesting results in Gencos receiving Vesting Price for their vested quantity 17

18 Monopoly Service Providers Ensuring outcomes of reliability, affordability & open access Reliability Affordability Open Access Performance standards Price Regulation framework Annual system-wide emergency exercises Efficiency Carryover Mechanism Separate ownership of infrastructure from competitive activities 18

19 FUTURE DEVELOPMENTS 19

20 Enhancements to the Regulatory Framework to facilitate new business models and technologies Enabling Consumer Choice Solar Demand Side Management Facilitate adoption of solar energy by enhancing regulatory framework Demand Response. Compensate consumers for load curtailments during periods of high prices Interruptible load (IL). Consumers to be paid to be on standby in response to system contingency events Full Retail Competition by 2H 2018 Facilitate entry of independent retailers through futures market R&D (grant calls) Ensure that our policy framework facilitates new technologies Enhancing retail competition Catalyse energy R&D solutions through competitive grant calls e.g. energy storage (2016) Energy storage 20

21 Consumers benefit from having a greater choice of retailers and pricing plans Enhancing retail competition Today, around 80% of demand have retail choice, and we are working on how to let the remaining 20% also enjoy the benefits of competition by 2H Lowering of Eligibility Threshold ,000 kwh April ,000 kwh Oct ,000 kwh 1 Jul ,000 kwh 2H 2018 Fully Contestable 21

22 Electricity futures market as a platform for risk management and investment activities Enhancing retail competition 22

23 Parallel developments in the electricity futures market have facilitated new business models Enhancing retail competition Energy management solutions Online marketing and services Green power packages, rooftop rental and solar leasing Hedging expertise Bundling with fuel cards and insurance services Future possibilities Bundling e.g. gas, telco Billing and Payment Concessions 23

24 Improving demand side management Demand Side Management Power generation Transmission Distribution Consumption Household Demand Side Management Industry and Commercial Energy Efficiency Consumers permanently reduce electricity usage by changing consumption behaviour. Demand Response. Compensate consumers for load curtailments during periods of high prices Interruptible load (IL). Consumers to be paid to be on standby in response to system contingency events 24

25 Demand response program was implemented in April 2016 Demand Side Management Demand side bidding where consumers can manage electricity usage in response to price signals Reduce peak wholesale electricity prices Promote more efficient investment Provide additional resource to improve system reliability 25

26 Joint pilot to nudge households to conserve water and electricity Demand Side Management Web portal Six-month comparison against peers Home Utility Audit 26

27 Solar PV offers greatest deployment potential for Singapore Solar Due to our physical constraints, Singapore has limited renewable energy options Renewables Hydro Tidal Wind Our Constraints Singapore s terrain is relatively flat Tidal range in Singapore is generally low and our waters are relatively calm Singapore has low average wind speeds Nonetheless, Singapore is located in the tropical sunbelt with good irradiance. Amongst the renewable energy options, solar energy offers the greatest deployment potential. 27

28 Steady growth in solar PV deployment in Singapore Solar Market interest in solar has been growing in Singapore. The take-up is expected to accelerate over the next few years, as prices fall and technology continues to improve. Number and Total Installed Capacity of Solar PV Installations, 2008 Q

29 Singapore s efforts to maximise solar PV deployment Solar PUBLIC 1 Enhancing the regulatory framework for solar (led by EMA) 2 Program to aggregate solar lead demand in government buildings (led by Economic Development Board) 3 Fostering a pro-business environment by facilitating new solar business models (facilitated by EMA) PRIVATE 29

30 1 Enhancing regulatory framework for solar (led by EMA) Solar #1: Streamlining deployment process a) Reduced the grid connection process from 27 to 7 days b) Established a grid connection checklist c) Empowered Licensed Electrical Workers (LEWs) to commission solar installations of certain class d) One-stop solar PV Portal to reduce search costs #2: Simplifying payment procedures a) Streamlining the market registration process b) Allowing net settlement c) Innovative solutions to reduce metering cost 30

31 2 Program to aggregate solar lead demand in government buildings (led by Economic Development Board) Solar Through government-led demand, the SolarNova Program aims to contribute 350 MWp of solar PV to Singapore's energy supply by

32 3 Fostering a pro-business environment by facilitating new solar business models (facilitated by EMA) 1 of 3 Solar Solar leasing model Consumers can enjoy green electricity with no upfront cost. Rooftop rental model Companies without rooftop space to buy solar energy from intermediaries who lease rooftop space for solar panels Rooftop space No Rooftop space Leases solar panels Sells excess solar back to the grid Pays the excess solar sold to the grid Solar energy Solar company Pays PPA price for solar energy Consumer Accounts solar energy to Shares payment received Coy A Pays rent for rooftop space Solar company Pays PPA price for solar energy Coy B 32

33 3 Fostering a pro-business environment by facilitating new solar business models (facilitated by EMA) 2 of 3 Solar Landmark deal between Apple and Sunseap for Apple to be the first company to be powered by 100% renewable energy in Singapore Hedges through the Electricity Futures Market Providing consumers better and more tailored solutions, especially for MNCs who have corporate renewable energy policies 33

34 3 Fostering a pro-business environment by facilitating new solar business models (facilitated by EMA) 3 of 3 Solar 34

35 Building capabilities to manage solar intermittency Solar Review Reserves Allocation Framework Review of the reserves allocation framework to better recognise the characteristics and impact of intermittent generation sources on the power system, whilst aligning with the causer-pays principle. Solar Forecasting Important tool for managing intermittency and determining the reserves requirements to cater for real-time weather fluctuations and solar output. EMA is working with the Meteorological Service Singapore to bring together knowledge in weather science and grid modeling. Energy Storage Launched the Energy Storage Program to build capabilities and solutions in grid-scale energy storage, suited for Singapore s weather condition, to deal with intermittency and to facilitate the deployment of solar energy. 35

36 Thank You 36

37 Performance Standards for SP PowerAssets, the Transmission Licensee (1 of 2) Service Dimension Availability of Supply Reliability of Supply Restoration of Supply Quality of Supply Quality of Supply Quality of Supply Service Indicator Minimum advance notice for planned interruption of electricity supply No. of power failure incidents* caused by failure of, damage to, or operation of Licensee s equipment or cables Time taken to restore electricity supply for each power failure due to failure of, damage to, or operation of Licensee s equipment or cables rated at 22kV & below Time taken to rectify voltage complaint or limit violation Time taken to correct a voltage complaint that requires network reinforcement No. of voltage dip incidents* due to failure of, damage to, or operation of Licensee s equipment or cables Service Standard 7 calendar days Performance Target (%) 95% 0 100% 3 hours 2 hours 2 calendar days 100% 90% 95% 6 months 99% 0 100% *Only incidents where the Licensee is determined by EMA to be at fault will be counted 37

38 Performance Standards for SP PowerAssets, the Transmission Licensee (2 of 2) Service Dimension Providing Supply Providing Supply Customer Contact Metering Services Service Indicator Time taken to implement electrification scheme requiring new substations after take over of substation (up to 22 kv) Time taken to implement service connection requiring cable installation work, after premises to be supplier with electricity is ready to receive cable Time taken to reply to a written enquiry or complaint Time taken to attend to meter problem at site upon notification Service Standard 10 weeks 90% 6 weeks 90% 7 working days 8 calendar days Performance Target (%) 95% 95% 38

39 Performance Standards for SP Services, the Market Support Services Licensee (1 of 2) Service Dimension Providing Supply Providing Supply Providing Supply Providing Supply Providing Supply Service Indicator Time taken to process application for electricity supply and reply to applicant Lead time to inspect large electrical installation (supply capacity greater than 45kVA) and turn on electricity supply upon request Lead time taken to test small electrical installation (supply capacity less than or equal to 45 kva) and turn on electricity supply upon request Time taken to inspect pre-tested electrical installation and turn on electricity supply upon request after opening of account Waiting time at site for appointment to turn on or cut off electricity supply Service Standard 14 calendar days 7 working days 10 calendar days 3 working days Performance Target (%) 85% 90% 90% 98% 1.5 hours 90% 39

40 Performance Standards for SP Services, the Market Support Services Licensee (2 of 2) Service Dimension Customer Contact Customer Contact Customer Contact Metering Services Metering Services Metering Services Service Indicator Time taken to reply to a written enquiry or complaint Queuing time at customer service counter (enquiries and opening/closing of accounts) Time taken by customer service office to pick up incoming telephone call Time taken to attend to meter disputes at site upon notification Time taken to attend (make appointment, reply) to meter reading issues upon notification Time interval between successive reading of billing meters Service Standard 7 working days Performance Target (%) 95% 20 mins 90% 30s 90% 8 calendar days 5 working days 95% 95% 2 monthly 95% 40

41 Performance Standards for PowerGas, the Gas Transporter (1 of 2) Service Dimension Availability of Supply Availability of Supply Reliability of Supply Gas Emergencies Providing Supply Providing Supply Service Indicator Time taken to restore gas supply after an unplanned interruption in the gas distribution network Minimum duration of notice of interruption of gas supply No. of gas supply disruption incident* caused by failure of, damage to, or operation of the ORFs, and gas pipeline network rated at 18 barg and above, arising from the fault of the gas transporter Service Standard 24 hours 95% 2 working days Performance Target (%) 95% 0 100% Time taken to respond to all reported gas leakages 1 hour 100% Time taken to process and application for connection of gas distribution network and to reply to applicant Time taken to carry out gas service connection from the date when customer s premises is ready to receive connection and where the premise is within the gas distribution network 2 weeks 90% 6 weeks 90% *Only incidents where the Licensee is determined by EMA to be at fault will be counted 41

42 Performance Standards for PowerGas, the Gas Transporter (1 of 2) Service Dimension Service Indicator Service Standard Performance Target (%) Metering Services Time taken to respond (make appointment, visit or reply) to a metering problem or dispute upon notification 5 working days 95% Customer Contact Time taken to reply to a written enquiry or complaint 7 working days 95% 42

43 Performance Standards for SLNG, the LNG terminal operator Service Dimension Reliability of Supply Restoration of Supply Restoration of Supply Gas injection tolerance Gas injection tolerance Service Indicator No. of gas supply disruption incident* caused by the failure of, damage to, or operation of LNG terminal arising from the fault of the LNG Terminal operator Time taken to resume gas supply after each gas supply disruption incident Time taken to fully restore gas supply to the LNG Terminal Operator s total schedule injection quantity after each gas supply disruption incident % deviation of aggregate metered injection quantities from aggregate Terminal Operator scheduled quantities for the day at each of transmission network injection point operated by LNG Terminal Operator % deviation of aggregate metered injection quantities from aggregate Terminal Operator scheduled quantities for the month at each of transmission network injection point operated by LNG Terminal Operator Service Standard 0 100% 30 mins 100% 60 mins 100% +/- 5% 100% +/- 2.5% 100% Performance Target (%) *Only incidents where the Licensee is determined by EMA to be at fault will be counted 43

44 Performance Standards for City Gas, producer and retailer of town gas Service Dimension Providing Supply Providing Supply Customer Contact Service Indicator Time taken to process and approve submission of plans for application of gas supply Waiting time for appointment for turn-on or cut-off of gas supply Time taken to reply to a written enquiry or complaint Service Standard 2 weeks 90% 2 hours 95% 7 working days Performance Target (%) 95% 44

45 Components of the Regulated Tariff Components Purpose Service Providers Fuel Cost Power Generation Cost Grid Charge Market Support Services (MSS) Fee Power System Operation (PSO) and Market Administration (EMC) Fees Fuel costs or cost of imported natural gas tied to oil prices by commercial contracts Cost of operating the power station (manpower/maintenance costs and capital cost). Cost of transporting electricity through the power grid. Costs of billing and meter reading. Costs of operating the power system and administering the wholesale electricity market. Generation Companies SP PowerAssets SP Services EMC PSO Frequency Set quarterly based on average gas price in previous three months. Determined through the biannual review and adjusted annually. Revised Annually Revised Annually Revised Annually 45

46 Singapore s enjoys high system reliability 46

47 at a relatively low cost (grid charge) 47

48 What is the future trajectory of solar installations in Singapore? Solar Nova 350 MWp HDB rooftops & aggregated govt demand by to 4 GWp roof-tops, facades, islands, floating PV and infrastructure 2 GWp roof-tops Future Possibilities? off-shore floating PV open spaces (car park/ highways) 48