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Developing a Forward Capacity Market to Enhance the Singapore Wholesale Electricity Market
After reviewing the feedback from all stakeholders, EMA noted that the FCM may not provide competitive market outcomes and achieve the key objective of maximising economic efficiency, given the high level of uncertainty that the power generation sector faces. EMA will therefore defer the implementation of the FCM. EMA will continue to monitor market conditions and technological developments, and review the introduction of the FCM in the future.
Following the second FCM Consultation Paper which provided an indicative implementation timeline for the FCM, EMA has received feedback from stakeholders that the development timeline for Market Rules and IT systems will need to be extended. EMA would like to invite written comments to the design proposal including the revised implementation timeline, as well as the Heat Rate Standard for Power Generation as set out in the attached. Deadline for submission is 5pm on 25 Jun 2020.
4 Dec 2019:
EMA had conducted industry-briefing sessions in Oct 2019 after issuing the consultation paper to seek comments on the proposed High-Level Design Straw Proposal. EMA would now like to invite comments to the draft detailed design proposal of the FCM and the revised implementation timeline as set out in the second consultation paper released on 4 Dec 2019.
Please submit all written comments via email to firstname.lastname@example.org by 5pm on 2 Jan 2020 in the format shown at Appendix 1 of the attached consultation document. You are requested to include a soft-copy of your submission in both PDF and Microsoft Word format.
The Energy Market Authority (EMA) introduced the Singapore Wholesale Electricity Market (SWEM) in 2003 to facilitate competition among the generation companies (“gencos”). The SWEM is designed as an Energy-Only Market (EOM)with ancillary services. The gencos are remunerated primarily based on the prevailing half-hourly spot price for the energy that they generate, with no separate capacity payments. This was the best practice adopted in the early 2000s by other established competitive electricity markets such as in Australia, New Zealand (“NZ”), the United Kingdom (“UK”) and the United States (“US”).
The EOM, by design, seeks to provide short term price signals to guide longer-term investments in generation capacity. However, there is no guarantee that the EOM will achieve timely resource adequacy to ensure electricity supply reliability. The experience in many jurisdictions with EOMs is that spot energy prices that result from the prevailing demand and supply conditions may not be high enough, on average over the longer term, to attract adequate new investments in generation capacity to meet the target electricity supply reliability standard (“Reliability Target”).
EMA is therefore consulting the industry on developing a Forward Capacity Market (“FCM”), which together with the real-time wholesale energy market with ancillary services. We would like to invite written comments and views on each key FCM design element, as well as the transitional arrangement and indicative development and implementation timeline for the FCM. EMA will take the comments/views into consideration as we develop the detailed FCM design and rules in consultation with the industry.
Please submit all written feedback via email to email@example.com by 5pm on 8 Jul 2019 in the format shown at Appendix 2 in the consultation document. You are requested to include a soft-copy of your comments in both PDF and Microsoft Word format.