04-07-2023, 03:27 PM
Bloomberg
Tue, 4 July 2023 at 10:41 am SGT
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Between them, Sembcorp and Keppel account for roughly a fifth of the city’s 12 gigawatt power-generation capacity, of which 35% is over two decades old. DBS Group Holdings Ltd. expects a quarter of it to retire in the next five years, even as electricity demand grows by more than 4% annually. As a result, “Singapore’s power market will likely remain fairly tight until more capacity comes online from 2026,”
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Starting from July 1, the island’s Energy Market Authority has imposed temporary caps on wholesale power prices to tamp down exceptional volatility. It will bring some relief to a market where 3,000%-plus intraday spikes have become common since 2021. So destabilizing were these that even before Russia's invasion of Ukraine many of the city’s newly formed electricity retailers — iSwitch, Ohm Energy, Best Electricity and SilverCloud Energy — had thrown in the towel.
......
With that capitulation, the 2018 liberalization of Singapore’s retail electricity market lost some of its sheen. This is what happened: The 2021 reopening of the economy unleashed pent-up power demand and eroded Singapore’s electricity reserve margin, the cushion that provides for planned and unplanned outages of generating units. The start of the war in Ukraine last February shocked prices of imported natural gas, the fuel source for Singapore’s power plants. Meanwhile, demand continued to grow. That created the perfect entry point for “sellers’ inflation,” a concept that has taken centerstage in the current debate on stubbornly high global price pressures.
......
Even now, when global natural gas costs are stabilizing after last year’s crisis, wholesale electricity prices are still stubbornly high. Everybody is operating in the same tight market, and benefiting from it. While Sembcorp and Keppel are still investing, their foreign-owned rivals don’t have much interest in building new capacity. The city’s reserve cushion will be around 26% in 2025, compared with 64% in 2015
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Given Singapore’s fundamental deficiency in energy resources, perhaps a fully liberalized power market with several private-sector generators and many resellers doesn’t exactly meet its need for resilience.
......
As there is no commercial interest from the private sector to set up open-cycle gas turbines, the Energy Market Authority has said that it will commission two 340-megawatt plants on its own by June 2025, one year ahead of the more expensive but more efficient, hydrogen-ready, combined-cycle units that Keppel and Sembcorp are building.
......
Just like Singapore’s authorities intervene in the housing market when prices get too far out of whack, cooling down the power industry is also up to them.
https://sg.finance.yahoo.com/news/commen...06291.html
Tue, 4 July 2023 at 10:41 am SGT
......
Between them, Sembcorp and Keppel account for roughly a fifth of the city’s 12 gigawatt power-generation capacity, of which 35% is over two decades old. DBS Group Holdings Ltd. expects a quarter of it to retire in the next five years, even as electricity demand grows by more than 4% annually. As a result, “Singapore’s power market will likely remain fairly tight until more capacity comes online from 2026,”
......
Starting from July 1, the island’s Energy Market Authority has imposed temporary caps on wholesale power prices to tamp down exceptional volatility. It will bring some relief to a market where 3,000%-plus intraday spikes have become common since 2021. So destabilizing were these that even before Russia's invasion of Ukraine many of the city’s newly formed electricity retailers — iSwitch, Ohm Energy, Best Electricity and SilverCloud Energy — had thrown in the towel.
......
With that capitulation, the 2018 liberalization of Singapore’s retail electricity market lost some of its sheen. This is what happened: The 2021 reopening of the economy unleashed pent-up power demand and eroded Singapore’s electricity reserve margin, the cushion that provides for planned and unplanned outages of generating units. The start of the war in Ukraine last February shocked prices of imported natural gas, the fuel source for Singapore’s power plants. Meanwhile, demand continued to grow. That created the perfect entry point for “sellers’ inflation,” a concept that has taken centerstage in the current debate on stubbornly high global price pressures.
......
Even now, when global natural gas costs are stabilizing after last year’s crisis, wholesale electricity prices are still stubbornly high. Everybody is operating in the same tight market, and benefiting from it. While Sembcorp and Keppel are still investing, their foreign-owned rivals don’t have much interest in building new capacity. The city’s reserve cushion will be around 26% in 2025, compared with 64% in 2015
.....
Given Singapore’s fundamental deficiency in energy resources, perhaps a fully liberalized power market with several private-sector generators and many resellers doesn’t exactly meet its need for resilience.
......
As there is no commercial interest from the private sector to set up open-cycle gas turbines, the Energy Market Authority has said that it will commission two 340-megawatt plants on its own by June 2025, one year ahead of the more expensive but more efficient, hydrogen-ready, combined-cycle units that Keppel and Sembcorp are building.
......
Just like Singapore’s authorities intervene in the housing market when prices get too far out of whack, cooling down the power industry is also up to them.
https://sg.finance.yahoo.com/news/commen...06291.html