Managing Transition to Retail Competition. Lim Howe Run Managing Director, GCEO s Office Head, Strategic Investments

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1 Managing Transition to Retail Competition Lim Howe Run Managing Director, GCEO s Office Head, Strategic Investments 11

2 SP Group 100% China Singapore Australia China Singapore SP PowerAssets SGSP (Australia) Assets (40%) Shirui Energy PowerGas AusNet Services (31%) Australia Singapore District Cooling Total Assets: $18B SP Services As at 31 Mar

3 Our Mission We provide reliable and efficient energy utility services to enhance the economy and quality of life 33

4 SINGAPORE ELECTRICITY LANDSCAPE 44

5 Industry Restructuring Pre Present Public Utilities Board (PUB) Water Gas (Town gas/ gas T&D) Electricity Generation Electricity T&D Retail Water Regulator Gas (Town gas/ gas T&D) Electricity Generation Electricity T&D Retail PUB Electricity and Gas T&D Market Support Services Generation Companies Retailers Gas EMA (Regulator) Electricity generation Electricity & Gas Retail Natural gas import 55

6 Electricity Market Structure Energy Market Authority (Regulator & system operator) Energy Market Company (Wholesale market operator) Generation Transmission & Distribution (T&D) Retailing Competitive Gencos (wholesale market) Regulated Grid Company Competitive Retailers (contestable market) Competitive sectors separated from monopoly sector 66

7 Key Players Generation Transmission & Distribution Retail SP PowerAssets Billing & Market Support SP Services Retailers SP PowerGrid (Managing Agent) 77

8 National Electricity Market SP Services Non Contestable Consumers Gencos bid half-hourly to sell Electricity Pool MSSL MSSL Contestable Consumers Retailers Contestable Consumers 88

9 SP Services Regulated Business One-Stop Service Non-Regulated Business Installation Metering Consolidated Billing Payment Collection Customer Services Supplier for non-contestable customers Retail Settlement/ Switching Debt Management Billing and Collection Agent 99

10 Electricity Customers Composition By Customer Accounts Total ~ 1.5m customers By Volume Monthly ~3,900GWh 1.4m (89%) Residential Households Residential, 17% 0.1m (11%) Commercial & Industrial 1.5m accounts C&I customers, 83% 10 10

11 Unbundled Tariff Structure 26% 2% <1% 72% Total Bundled Tariff Energy Costs Network Costs MSS Fee Market Admin & PSO Fee Unbundled Tariff Based on Low Tension 3Q2017 Tariff 11 11

12 OPEN ELECTRICITY MARKET 12 12

13 Open Market Value Chain Assets Generation T&D Customers >>> Network Management System Invoice Generated to customers Smart Meters Silver Spring Network Dataflow >>> Datacenters Retailers Invoice 13 13

14 Market Contestability Journey Jul MW Contract Capacity Dec ,000kWh consumption Dec ,000kWh consumption Oct ,000kWh consumption Jul ,000kWh consumption TODAY 2018 All Consumers By 2H 2018 Full Retail Contestability 44 Consumers 5,000 Consumers 9,000 Consumers 70,000 Consumers 100,000 Consumers 14 14

15 SPS Role in FRC 15 15

16 Project Phases 1 Design System design meet FRC requirements and are captured and validated 5 Nonfunctional Test Testing for system security, technical robustness and recoverability Build System Integration Test User Acceptance Test Testing of technical build & system components End to end process testing performed by the project team End to end process testing performed by the business users 6 7 Performance Test Market Trial Stress test system for ability to handle increased transaction volumes Testing of market transactions with retailers 16 16

17 Project Milestones Milestone 6: Nationwide FRC Launch Milestone 5: Pilot Run Milestone 4: Preparation & Go-Live Phase Milestone 3: Test Phase Milestone 2: Build Phase Milestone 1: Business Blueprint Phase 17 17

18 Critical Success Paths 1 IT Infrastructure Backbone of the entire OEM mechanism 2 Retailers Readiness Seamless transition; No disruption to consumers 3 Consumers Education Active participation from informed consumers 18 18

19 IT Infrastructure Upgrade of IT applications Upgrade hardware & software applications to support higher volume of market interactions & new market processes Introduce digital channels to facilitate consumer & retailers participation Cyber & data security Key Risks System design & readiness Integration of retailers, consumers and SP Services 19 19

20 Retailers Readiness (1/2) Market trials with retailers to ensure IT systems readiness Briefings and information session to inform retailers of Project progress On-going industry consultations Pilot launch (Jurong Estate ) 20 20

21 Retailers Readiness (2/2) Pilot Launch (Jurong Estate) Soft launch of OEM with full functionalities 108k Residential accounts 10k business accounts Option to continue buying from SP at regulated tariff or switch to retailer of choice Consumers will be notified of eligibility in Q Provide insights for EMA, SP & Retailers to gather feedback and fine-tune processes 21 21

22 Consumers Education (1/2) Online Information Platform Education on Singapore Electricity Landscape and application of Open Electricity Market Consolidated information site for both consumers and retailers Application to opt in as contestable consumer

23 Consumers Education (2/2) Price Comparison Website Consolidated site for consumers to compare offers from retailers Match retailers offers to consumers requirements 23 23

24 Project Timeline Today Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug FRC Changes Price Comparison Website Self Service Platform Retailer of Last Resort Design Design Complete [22/4] Build Build Complete [20/1] EBS Migration System Integration Testing Handover to User Acceptance Testing [10/7]... Operational UAT (3 cycles) UAT Complete [22/12] Non-Functional testing / Security / Data Center Performance Test (2 cycles) Market Trials with Retailers Possible technical cutover [12/3] Design Build SIT / UAT / Non-Functional Testing Go live [4/6] Possible FRC pilot Possible nationwide FRC roll out 24 24

25 powering the nation 25 25