Regulatory Updates

Investigation of high and volatile USEP between 26 and 29 July 2021

1. The Uniform Singapore Energy Price (USEP), which is the wholesale price of electricity sold by electricity producers in the Singapore Wholesale Electricity Market (SWEM), varies every half-hour period (Trading Period) depending on electricity demand and the supply offers by electricity producers for the Trading Period.

2. Between 26 and 29 July 2021 (hereinafter referred to as Gas Curtailment Period or GCP), there was an unplanned curtailment of piped natural gas (PNG) supply imported from Indonesia, West Natuna (WN), due to an incident at an upstream production facility. This coincided with a planned curtailment for maintenance. The total WN PNG (both planned and unplanned) curtailed accounted for up to 16-20% of the total gas supply to Singapore.

3. The Energy Market Authority (EMA) has investigated the sustained high USEP during the GCP, which averaged at $418/MWh compared to $143/MWh over the preceding 5 weekdays. While EMA worked with the WN PNG importer (viz. SembCorp Gas Pte Ltd) to flow additional regasified LNG to all the affected gas users, which included several electricity generation companies (Gencos), the gas supply remained tight. The ability of the non-affected Gencos to generate more electricity was also constrained by their contracted daily gas supply quantities and the operating limits to maintain stable and adequate gas delivery pressure in the gas supply system. The independent Market Surveillance and Compliance Panel, which enforces compliance with the Singapore Electricity Market Rules by all SWEM participants, has further concluded that there was no breach of the Market Rules during the GCP.

4. EMA will continue to closely monitor the USEP for any unusual movements, as well as the reliability of generation units, and work with the industry to ensure that there is sufficient generation capacity and gas supply in the system.

15 October 2021