<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published April 6, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Good vibes in retail electricity mart
Some tangible savings flowing from market-opening move, says a source
By RONNIE LIM
(SINGAPORE) Singapore has just started to open a part of the so-called 'non-contestable' retail electricity market here to competitively-bid supplies by the gencos.
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</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>The government's objective is to fully open up the market so that all consumers will be able to purchase electricity from a range of retail packages offered by different suppliers.
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>This is already having some impact, though small at this stage, on household electricity tariffs this quarter, BT understands.
'There've been some tangible savings,' a source said of the market-opening move impacting about 1 million households and small businesses which make up 25 per cent of total electricity sales here. Market liberalisation has thus far opened up three quarters of the electricity market here.
The first competitive tender for a portion of this non-contestable market was called by the Energy Market Authority late last year and was recently awarded to three generation companies here to supply various tranches they had successfully bid for from Q2 through to Q4 this year, the sources said.
A second tender for another portion of the non-contestable load was also called by the EMA in Q1 and this has just closed, they add. News of this partial opening of the non-contestable market was disclosed in a just-called EMA tender document calling for consultants to review the parameters of the electricity vesting contract for 2011-2012.
EMA said in the document that 'starting from the second quarter, 2010, to introduce competitive pricing for the setting of the non-contestable tariff, EMA will tender out portions of the non-contestable load.'
'The awarded tender (vesting) price will be used together with the allocated vesting price for the setting of the tariff for non-contestable consumers. The amount put up for tender will be determined by the EMA.'
Some 55 per cent of the electricity demand here is currently 'vested' or price-controlled, and the gencos are being allowed to bid for as much as 3 to 12 percentage points of this pie, with the actual percentage understood to vary from one tender to the next, industry sources said.
Vesting contracts were first introduced by the EMA in 2004 to curb abuse of market power by any single genco and to protect consumers from excessive price volatility. The vesting contracts now cap prices on 55 per cent of total electricity supply here, with the vesting prices set at the long-run marginal cost of the most efficient generation technology in use, namely combined cycle gas turbines.
The latest tenders to supply a part of the non-contestable electricity market is an interim measure by the EMA to inject more competition into the market.
The government's objective is to fully open up the market so that all consumers will be able to purchase electricity from a range of retail packages offered by different suppliers. Singapore is already testing the use of smart meters under the pilot Electricity Vending System to allow such full retail contestability.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Good vibes in retail electricity mart
Some tangible savings flowing from market-opening move, says a source
By RONNIE LIM
(SINGAPORE) Singapore has just started to open a part of the so-called 'non-contestable' retail electricity market here to competitively-bid supplies by the gencos.
<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
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'There've been some tangible savings,' a source said of the market-opening move impacting about 1 million households and small businesses which make up 25 per cent of total electricity sales here. Market liberalisation has thus far opened up three quarters of the electricity market here.
The first competitive tender for a portion of this non-contestable market was called by the Energy Market Authority late last year and was recently awarded to three generation companies here to supply various tranches they had successfully bid for from Q2 through to Q4 this year, the sources said.
A second tender for another portion of the non-contestable load was also called by the EMA in Q1 and this has just closed, they add. News of this partial opening of the non-contestable market was disclosed in a just-called EMA tender document calling for consultants to review the parameters of the electricity vesting contract for 2011-2012.
EMA said in the document that 'starting from the second quarter, 2010, to introduce competitive pricing for the setting of the non-contestable tariff, EMA will tender out portions of the non-contestable load.'
'The awarded tender (vesting) price will be used together with the allocated vesting price for the setting of the tariff for non-contestable consumers. The amount put up for tender will be determined by the EMA.'
Some 55 per cent of the electricity demand here is currently 'vested' or price-controlled, and the gencos are being allowed to bid for as much as 3 to 12 percentage points of this pie, with the actual percentage understood to vary from one tender to the next, industry sources said.
Vesting contracts were first introduced by the EMA in 2004 to curb abuse of market power by any single genco and to protect consumers from excessive price volatility. The vesting contracts now cap prices on 55 per cent of total electricity supply here, with the vesting prices set at the long-run marginal cost of the most efficient generation technology in use, namely combined cycle gas turbines.
The latest tenders to supply a part of the non-contestable electricity market is an interim measure by the EMA to inject more competition into the market.
The government's objective is to fully open up the market so that all consumers will be able to purchase electricity from a range of retail packages offered by different suppliers. Singapore is already testing the use of smart meters under the pilot Electricity Vending System to allow such full retail contestability.
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