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Liberalization of electricity markets in selected places - Coggle Diagram
Liberalization of electricity markets in selected places
Objective: liberalization of electricity market in UK & Singapore.
Singapore
Development of local electricity market
1995, corporatization of PUB, under Temasek Holding
Temasek created Singapore Power, under it:
Power Senoko
Power Seraya
PowerGrid
Power Supply Ltd
Tuas Power directly under Temasek
1998, Singapore Electricity Pool launched
2000-2019 Market reform towards full competition
Regulatory framework
Electricity Act
need license for electricity-related business
EMA, independent regulator
Operation
Separates contestable (gen & retail) from non-contestabe (transmission & distribution)
Generation
National Electricity Market, operated by EMC
A spot market, every 30min
selected Gencos receive nodal price
retailers pay Uniform Singapore Energy Price (USEP)
Schemes put in place to enhance NEM
Interruptible Load Scheme
Embedded Generation
Demand Response Programme
Transmission & distribution
SP Power Assets
not allowed to compete in energy market (Gen or Retail)
subject to access regulation
grid charges determined by EMA, through CPI-X mechanism, every 5 years
Retail
progressively opened since 2001
2018, launched Open Electricity Market, everyone become contestable
Outcomes of liberalization
New participants, decreased incumbent market share
Need for unbundling due to conflict of interest
Put in place a form of access regulation
Accounting separation
Functional separation
Corporate separation
Hong Kong
Electricity supply provided by two VIU:
HEC, serves 20% of Hong Kong (Hong Kong Island, Ap Lei Chau and Lamma Island), capacity 3.2GW from Lama Power Station.
CLP, serves 80% of Hong Kong (Kowloon, the New Territories and some outlying islands), capacity around 7GW from 3 power station, imports power from China.
Regulatory regime
Regulated under Scheme of Control Agreements (SCAs)
Government signed new SCAs with HEC & CLP in April 2017 and last until 31/12/2033. Terms include:
regulated return reduced from 9.99% to 8%
Introduce FiT
raise incentive/penalty levels and threshold
Price setting mechanism
Basic Tariff, covers:
OPEX
Standard fuel charges
regulated return
Fuel Cost Adjustment
surcharge/rebate
cost-pass-through
fully borne by customers
Areas of concern
No competition
Option: Allow cross selling HEC & CLP
need to expand interconnection capacity
March 2015, Government launched public consultation on future electricity market development
Government found that requisite not present to introduce competition in 2018
TPA framework
wholesale market
Fuel cost-pass-through
Candidates for Competition
Generation
Retail
UK
Regulatory Framework
Regulated by GEMA
Ofgem performs day-to-day regulatory duties
administered through a licensing regime
generation
transmission
distribution
supply
unbundling rules
legal unbundling for distribution & supply
ownership unbundling for transmission
Operation
Generation
liberalization created wholesale market
Electricity Pool, 1990
generators only
Replaced with NETA, 2001
based on bilateral between generators and suppliers
forward market
futures market
power exchange market
Voluntary balancing market
operated by NGET
Transmission & Distribution
RPIX, until 2013
5 year basis
after 2013, RIIO
rewards for innovation and meeting changing customers expectation
Retail
Three phases of competition, 1990-1999
Outcome of liberalization
Market structure
Increase number of Gencos and suppliers
Electricity price
difficult to isolate impact
Supply reliability
interruption fell by 11%, duration of interruption fell by 9%
Switching rate
Low switching rate
resulted in price cap of default tariff in Jan 2019