Singapore auctions power packages

Tan Liang Ching

EMC has conducted over 50 live auctions since its launch.

Singapore auctions power packages SINGAPORE T he operator of Singapore’s wholesale electricity market, Energy Market Company (EMC), wanted to cut the time it took companies to find their electricity retailer from one to two months to just 15 minutes when it launched its procurement portal PowerSelect in 2018.

Since the launch of PowerSelect, EMC has successfully conducted over 50 live auctions for businesses in the industries of manufacturing, transportation & storage, accommodation, and food services, shared Liang Ching Tan, senior vice president for business development at EMC. “On average, these businesses enjoyed savings of about 30% off the regulated electricity tariff (based on prevailing tariff rates at time of auction) when they procured electricity through PowerSelect. Compared against the businesses’ reserve prices (or starting bids for the auctions), the amount of additional savings ranged between 3% and 15%,” he said in an exclusive interview.

PowerSelect allows business to shortlist their retailers based on retailers’ packages as well as their track record of performance. After the round of shortlisting, the retailer that offers the most competitive price in PowerSelect’s 15-minute auction ultimately wins the contract.

He recalled a customer in the Food and Beverage sector which conducted a Live Auction for a Discount Off Tariff plan. The live auction allowed the customer to secure a final discount of 28% off the regulated tariff, which was higher than the 25% rate it had with its incumbent retailer. “Most businesses prefer Fixed Price Plans as there is certainty in their electricity spending which is helpful for budgeting purposes. They usually compare 12- and 24-month contracts, and decide based on the prevailing fixed rates. In the current market situation, 24-month fixed rates are lower for businesses,” Tan said. Most of the time, the electricity procurement process is still very manual and time consuming—the businesses contact electricity retailers individually for quotes, and then try to make sense of the various electricity packages which often come with detailed and complex terms and conditions.

Powered-up platform PowerSelect condenses the procurement processes in its platform by housing data from the wholesale and futures electricity markets, having an in-house team assist businesses in understanding and navigating the contract terms and conditions of the electricity retailers and advise them in areas like the reserve price for the auctions and contract durations. For the future, EMC is looking to expand the PowerSelect platform as it has observed that businesses are increasingly looking for other energy-related products and services. “Whilst there were plans to roll out additional, value-added services on PowerSelect at later stages, we intend to bring forward our plans to better support our customers. We are in the process of evaluating our options for PowerSelect,” Tan said.

The EMC is also expects more differentiated packages from the remaining retailers like green electricity packages as they gain more experience, and as consumers’ awareness and expectations increase over time.

THE CHARTIST: JAPAN’S SOLAR INDUSTRY IS DIMMER WITH JUST 20GW PROJECTED TO COME ONLINETHE CHARTIST: POWER SECTOR LED SOUTHEAST ASIA’S INFRASTRUCTURE LEAGUE TABLES IN 2019

x Source: BMI Research Japan’s solar power sector will expand at robust rates through to 2020 as a large backlog of projects supported by feedin tariffs come online. After 2020, BMI Research said that the transition to a reverse auctions system will slow growth, as the Japanese government looks to regulate capacity additions in order to reduce subsidy costs and support grid stability.

“We expect Japan to register robust solar capacity growth through to 2020 as a result of the implementation of a substantial pipeline of projects that benefit from a generous feed-in tariff support scheme. Our forecast is that out of a 50GW backlog of such projects, only 20GW will actually come online, as most will not be able to take advantage of the FiT subsidies amid stringent government requirements and delays in development,” BMI Research added. Sector breakdown by deal value Source: Inframation The power sector took up the chunk of Southeast Asia’s largest infrastructure projects in 2019 as transport developers eschewed their plans amidst political and regulatory risks. According to Inframation and SparkSpread’s 2019 League Tables, big-ticket energy deals like the $1.1b refinancing of the Mong Duong 2 plant in Vietnam pushed the region’s total transaction value to $21b.

David Zemans, a partner at law firm Milbank, said that a tested commercial structure allows export credit agencies and commercial players to participate together in power projects. Southeast Asia’s largest transaction in 2019 was the sale of a 69.11% stake of ENGIE’s Thai IPP portfolio, Glow Energy, to Global Power Synergy Public for $3.87b. The transaction was followed in the ranking by the development of Vietnam’s 1,320MW coalfired Van Phong 1 power plant for $2.58b.

x Top 5 SE Asia Greenfield Projects by Value (2019)