Managing Transition to Retail Competition Lim Howe Run Managing Director, GCEO s Office Head, Strategic Investments 11
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 2017 22
Our Mission We provide reliable and efficient energy utility services to enhance the economy and quality of life 33
SINGAPORE ELECTRICITY LANDSCAPE 44
Industry Restructuring Pre-1995 1995 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
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
Key Players Generation Transmission & Distribution Retail SP PowerAssets Billing & Market Support SP Services Retailers SP PowerGrid (Managing Agent) 77
National Electricity Market SP Services Non Contestable Consumers Gencos bid half-hourly to sell Electricity Pool MSSL MSSL Contestable Consumers Retailers Contestable Consumers 88
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
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
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
OPEN ELECTRICITY MARKET 12 12
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
Market Contestability Journey Jul 2001 2MW Contract Capacity Dec 2003 20,000kWh consumption Dec 2006 10,000kWh consumption Oct 2014 4,000kWh consumption Jul 2015 2,000kWh 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
SPS Role in FRC 15 15
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 2 3 4 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
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
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
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
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
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 Q1 2018 Provide insights for EMA, SP & Retailers to gather feedback and fine-tune processes 21 21
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 https://www.openelectricitymarket.sg/home 22 22
Consumers Education (2/2) Price Comparison Website Consolidated site for consumers to compare offers from retailers Match retailers offers to consumers requirements 23 23
Project Timeline Today 2016 2017 2018 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
powering the nation 25 25