Please submit all written feedback to Mr Eugene Lim (eugene_lim@ema.gov.sg) and Mr Lim Yew Hua (lim_yew_hua@ema.gov.sg). All comments and feedback should reach EMA no later than 5pm on 6 Jul 2016 in the format as shown in Appendix 3. You are requested to include a soft-copy of your comments in both PDF and Microsoft Word format in your submission.
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Decision
Having considered the comments received, the Consultants’ responses thereto and their final report, EMA makes the Final Determination on the LRMC parameters for setting the 2017 and 2018 vesting contract price as set out in Appendix 1 (for the financial parameters) and Appendix 2 (for the technical parameters).
Overall, the indicative vesting price for 2017-2018 (assuming the weighted average gas price of S$9.87/GJ for Mar to May 2016) is $122.31/MWh, marginally lower than the current vesting price of $122.33/MWh.
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Update
3 Aug 2016:
Having considered the comments received, the Consultants’ responses thereto and their revised report, EMA makes the Draft Determination on the LRMC parameters for setting the 2017 and 2018 vesting contract price as set out in Appendix 1 (for the financial parameters) and Appendix 2 (for the technical parameters). Overall, the indicative vesting price for 2017-2018 (assuming the weighted average gas price of S$9.87/GJ for Mar to May 2016) is $122.03/MWh, marginally lower than the current vesting price of $122.33/MWh.
EMA invites comments on the Consultants’ Revised Reports and EMA’s Draft Determination. All comments must be submitted using the format in Appendix 3and in both PDF and Microsoft Word format. Please submit your comments in writing via email to Mr Eugene Lim (eugene_lim@ema.gov.sg) and Mr Lim Yew Hua (lim_yew_hua@ema.gov.sg) no later than 5 pm on 22 Aug 2016.
6 Jul 2016:
The consultation has closed for comments.
Consultations
The Energy Market Authority (“EMA”) implemented vesting contracts on 1 Jan 2004, with the objective to mitigate the exercise of market power by the generation companies (“gencos”) to promote efficiency and competition in the electricity market. The vesting contracts mandate a specified amount of electricity (viz. the vesting contract level) to be hedged at a specified price (viz. the vesting contract price). This removes the incentives for gencos to withholdtheir generation capacity to sustain inefficient spot prices in the wholesale electricity market.
EMA has appointed Parson Brinckerhoff Pte Ltd (“PB”) and KPMG Services Pte Ltd (“KPMG”) (“Consultants”) to conduct a review of the LRMC parameters for setting the vesting contract price for 2017 and 2018. A summary of the Consultants’ assessment of the financial and technical parameters are set out in Appendix 1 and Appendix 2 respectively. EMA invites comments and feedback on the Consultants’ draft reports.
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