Vesting Contracts

What is vesting contract?

Introduced on 1 January 2004, vesting contracts are aimed at curbing the exercise of market power by the generation companies, to promote efficiency and competition in the electricity market for the benefit of consumers.

Vesting contracts are signed between generation companies and SP Services Ltd. With the vesting contracts, generation companies are committed to sell a specified amount of electricity (viz the vesting contract level) at a specified price (viz the vesting contract price). This removes the incentives for generation companies to exercise their market power by withholding capacity to push up spot prices in the wholesale market.

How is vesting price set?

The vesting price is set taking into account both the long run marginal cost (LRMC) of the most efficient generation technology that accounts for at least 25 per cent of the total electricity demand in Singapore. The policy objective is to promote efficiency and competition in the electricity market for the benefit of consumers.

The vesting contract level is set to effectively curb the exercise of market power based on projected electricity supply and demand.

To ensure the vesting contracts reflect the prevailing market conditions, EMA reviews the vesting parameters every two years or at other times when it considers necessary.

View Vesting Contract FAQs.

View the latest and historical vesting data here.

No.	Title
1	Vesting Contract Vesting Contract (between Market Support Services Licensee and each of the six Generation Licensees) Addendum 7 (updated January 2014) 6 (updated September 2013) 5 (updated October 2012) 4 (updated March 2011) 3 (updated April 2010) 2 (updated November 2009) Vesting Contract - Supplemental Letter to Addendum 1 (updated June 2009) 1 (updated May 2009)
2	How to Calculate Vesting Contract Components Calculating Vesting Credits/Debits EMA's Procedures for Calculating the Components of the Vesting Contracts (updated Apr 2020)
3	Review of Vesting Contract Level 1 January 2015 to 31 December 2016 1 January 2013 to 31 December 2014 1 January 2011 to 31 December 2012 1 January 2009 to 31 December 2010 1 January 2007 to 31 December 2008
4	Review of Long Run Marginal Cost Parameters to set vesting price 1 January 2021 to 30 June 2023 Update of Capital Cost Parameters for 2020 1 January 2019 to 31 December 2020 1 January 2017 to 31 December 2018 1 January 2015 to 31 December 2016 1 January 2013 to 31 December 2014 1 January 2011 to 31 December 2012 1 January 2010 to 31 December 2010 1 January 2009 to 31 December 2010 1 January 2007 to 31 December 2008 1 January 2005 to 31 December 2006
5	Information Paper Variable Hedge Proportion for Contestable Consumers