PA Consulting Group and The Energy Market Authority of Singapore unveil fully competitive wholesale and retail energy markets.
On 1 January, 2003 a new, fully competitive electricity market began operating in Singapore. This new market, which encompasses both wholesale and retail, is the result of over three years of collaboration between The Energy Market Authority (EMA) of Singapore and PA Consulting Group, a leading management, systems and technology consulting firm.
Singapore’s new electricity market is designed to promote the efficient supply of competitively-priced electricity, open up the retail market to full competition, allow certain government-owned assets to be privatized, and encourage private investment in Singapore’s power system infrastructure.
The Energy Market Authority of Singapore Act 2001 created the EMA and the Electricity Act 2001 allocates to the EMA responsibility for regulation of the electricity sector. In addition the market will be governed by the wholesale market rules and associated manuals and by the electricity licenses and codes of practice issued by the Energy Market Authority.
Since 1998 the Singapore electricity industry has been operating under a competitive, day-ahead structure. The Government carried out a comprehensive review of the electricity industry in 1999. The key objective of the review was to consider whether or not to implement a wholesale electricity market structure and regulatory framework to support a competitive electricity industry in Singapore.
Following the review, the Government decided in March 2000 to continue with further deregulation of the industry to obtain the benefits of full competition. The key restructuring initiatives included:
- The separation at the ownership level of the contestable and non-contestable parts of the electricity industry;
- The establishment of a system operator and market operator;
- The establishment of a market support services entity to undertake meter reading, meter data management, billing, consumer transfers, and provide default electricity supply;
- The establishment of a real-time wholesale market for electricity, regulation and reserve; and
- The progressive liberalization of the retail market.
PA has been proudly partnering with EMA since 1999 to establish the market and has undertaken the following to assist the EMA with structuring their new market:
- Reviewed the existing Singapore Pool market.
- Recommended the changes needed.
- Worked with the EMA and the industry in developing the new wholesale and retail market frameworks;
- Undertook market power analysis and prepared vesting contracts for the curbing market power abuse;
- Produced the necessary legal documents including the Electricity Act, The Rules, codes of conduct, regulatory agreements, and the electricity licenses.
- Built the market clearing engine and wholesale settlement systems for the market company;
- Built the retail market systems covering meter reading, meter data management, retail billing and settlement, and the transfer of consumers between retailers;
- Implemented all of the above, including setting up the Market and System operators and helping market participants with their readiness;
- Provided overall project management guidance to the EMA for the safe and controlled start of the market on 1 January;
- Advised the Regulator on how to manage the program and how to regulate the industry.
Derek HasBrouck, a member of PA’s Management Group says, “PA is proud to have been involved in this very important project, assisting the EMA in development of a real-time, competitive energy market. We are confident that this structure will be the basis for further restructuring in other countries.”
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