1. 1 Allan H. Dawson Chief Executive Officer Energy Market Company, Singapore Evolution in the National Electricity Market of Singapore

2. 2 Agenda  Reform Milestones  Singapore an earlier adopter  Why the NEMS?  Industry Structure  Market Design  NEMS Performance  Future Evolution

3. 3 Reform Milestones

4. 4 Singapore an early adopter Singapore Electricity Pool  Singapore Electricity Pool (SEP) was a cost- based day-ahead market  Designed in 1994, SEP was implemented in 1998  International thinking on market design progressed significantly between design and implementation  SEP was a useful way of transitioning to a more dynamic and complex market

5. 5 Why the NEMS?  Designed to promote the supply of competitively priced electricity  Open up the retail market to full competition  Allow certain government assets to be privatized  Encourage private investment in Singapore’s power system infrastructure

6. 6 Industry Structure Senoko Power Ltd Tuas Power Ltd Power Seraya Ltd NEASembCorp Power Grid Ltd Regulator System Operator Market Operator (EMC) Non-Contestable Customers Contestable Customers Electricity Retailers Power Supply Ltd Electricity Retailers Keppel FELS Energy Supply Pte LTd SembCorp Power Pte Ltd Senoko Energy Supply Pte Ltd Seraya Energy Pte Ltd Tuas Power Supply Pte Ltd

7. 7 Industry Structure

8. 8 Market Design

9. 9  Real-time market spot market for energy, regulation and 3 classes of reserve  Mandatory participation  Cooptimization between energy, reserve and regulation

10. 10 Market Design  Ex ante pricing  Locational marginal (nodal) prices at 33 injection nodes and 350 off-take nodes  Generators receive nodal spot price  Customers pay Uniform Singapore Electricity Price  Daily settlement

11. 11 NEMS Performance  Competitive pressure in the energy, reserve (most notably) and regulation markets  Prices move with fundamentals (oil prices, generator outages etc)  Increasing dominance of gas-fired generation  Stakeholders appear satisfied with the first 10 months of operation

12. 12 NEMS Performance Wholesale Energy Prices

13. 13 NEMS Performance Wholesale Reserve Prices

14. 14 NEMS Performance Dominance of gas-fired generation

15. 15 Further Evolution  Market rules change panel has supported over 100 rules changes  Most changes were in preparation for market commencement to make the rules workable  EMC administers the rules change panel  Critical that the market continues to evolve so that ‘big bang’ implementations are avoided

16. 16 Further Evolution  Key market design issues likely to be considered in the next 2 years  Interruptible load participation in the reserve market  Market re-settlement  Transmission planning and augmentation  Financial transmission rights

17. 17 Summary  Singapore has come a long way in the liberalisation of its electricity market  Evolution is important as NEMS performance directly impacts on Singapore’s economy  Singapore will remain at the forefront of market reform  EMC is excited to play a key role in the evolution and success of the NEMS