**3. ESI Liberalisation in Singapore**

Beginning 1995, the Singapore's ESI has been progressively liberalised and restructured. A regulatory framework is established, the generation and retail markets are opened up to the commercial players, and a wholesale electricity market is introduced. The aim was to gradually introduce competition in electricity generation and retail such that Singapore would have an electricity market that allows the investment, production and pricing decisions to be driven by market forces rather than central planning. The phases of liberalisation can be divided into four; corporatisation from 1995 to 1998, regulatory infrastructure from 1998 to 2001, privatisation and divestment from 2001 to 2009 and full market contestability from 2009 until now [32]. The first (reform) move began in 1995 when the government decided to corporatise the Public Utilities Board (PUB), who were in charge of the supply of water, electricity and piped gas. Under this first move, the electricity and gas undertakings of the PUB were put under the government's investment arm, Temasek Holdings (TH). Under TH, Singapore Power (SP), which at the time was a vertically integrated monopoly wholly owned by the government, was created as the holding company for several new companies including PowerSenoko (now known as Senoko Energy), PowerSeraya, PowerGrid (now known as SP PowerAssets) and Power Supply (now known as SP Services). SP then took over the electricity and piped gas functions from the PUB, and the electricity generation, transmission, distribution, wholesale and retail became the responsibility of the SP. To undertake the responsibility, the companies under SP above were put in charge of the different segments of the ESI. Generation was put under PowerSenoko, PowerSeraya and Tuas Power (now known as Tuas Power Generation, a generation company that was set up as an independent company directly under TH). Power Grid was in charge of the transmission and distribution, and Power Supply, the electricity supply and utilities support services company, became the sole retailer. PUB was reconstituted to continue to supply water and undertake the new role of regulating the electricity and piped gas industries as a result.

Moving on, the Singapore Electricity Pool (SEP) was launched in 1998. It was a day-ahead market with PowerGrid as the system operator and pool administrator. Singapore thus became the first ASEAN country to have the wholesale electricity trading market. At the time, Power Supply was the only buyer in the SEP where the three power generation companies above and a government-owned waste incineration plant competed to sell electricity in the market. Electricity tariffs were unbundled at the same time, making Singapore's ESI to be the most liberalised in ASEAN by the late 1990s. Comprehensive review done by the government in 1999 resulted in the decision to liberalise the electricity market further being made in March 2000. The Electricity Act (Chap. 89A) was enacted in 2001, with the aim to create a competitive market framework for the electricity industry and provide safety, technical and economic regulation of the generation, transmission, supply and use of electricity. With it, the Energy Market Authority (EMA) of the Singapore Act (Chap. 92B) was also enacted to establish and incorporate the EMA of Singapore, to provide for its functions and powers. Consequently, the Energy Market Authority (EMA) was set up in 2001 as statutory board under the Ministry of Trade and Industry to regulate the energy market including electricity and gas industries. EMA's main goals are to ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore [33]. With the EMA now regulating the ESI, PUB is further restructured to become the sole water authority under the Ministry of the Environment effective 1 April 2001. A division under the EMA undertakes the responsibility as the power system operator (PSO) to ensure secure operation of the power system. PowerGrid therefore only operates and maintains the transmission and distribution grid. A new company, the Energy Market Company Pte Ltd (EMC), a joint venture between EMA and M-co Pte Ltd from New Zealand, was established to undertake the responsibility for the operation and administration of the wholesale electricity market. The SEP lasted until December 2002. Beginning 1 January 2003, the New Electricity Market of Singapore (NEMS) took over its role. It represents a progression from the pool to fully competitive wholesale and retail electricity markets. Similar to the WESM in the Philippines, there is a total of eight key players in NEMS [33] as shown in Figure 2; EMA, EMC, PSO, transmission licensee (SP Power Assets), market support services licensee (MSSL) (SP Services), generators, retailers and consumers (contestable and non-contestable). Their respective descriptions are shown in Table 4.

**Figure 2.** New Electricity Market of Singapore (NEMS) governance [33].


#### **Table 4.** Key players in NEMS.

\* All market participants need to be licensed by the EMA and registered with the EMC.

Starting July 2001, EMA has gradually opened the retail electricity market to competition to provide business consumers with more options to manage their electricity cost, beginning with those with maximum power requirement of 2 MW. They become known as 'contestable consumers' and at this stage of partial liberalisation, contestable consumers were able to purchase power from either retailers at a price plan that best meet their needs, or from the wholesale electricity market at the half-hourly wholesale electricity prices, or from the MSSL. In June 2003 and December 2003, the thresholds were lowered to customers having average monthly consumption of 20,000 kWh and 10,000 kWh respectively [34], down to 8000 kWh in 2004, to 4000 kWh in 2014 and 2000 kWh in 2015 [35,36]. The non-contestable consumers, mainly households and small businesses, buy electricity at the regulated tariff from the SP Services, the designated public electricity supplier that sells electricity to the non-contestable customers. Since 1 April 2018, EMA commenced the soft launch of open electricity market, where households and businesses in Jurong can choose to buy electricity from a retailer at a price plan that best meets their needs. From 1 November 2018, the open electricity market is extended to all consumers across Singapore by zones. This initiative provides about 1.4 million households and business accounts with more choice and flexibility when buying electricity, while being provided with the same electricity supply through the national power grid. Consumers who wish to remain with the SP Services and buy electricity at the regulated tariff can choose to do so. The switching is not compulsory and there is no deadline for switching. Transmission and distribution of the electricity is still owned and operated by the PowerGrid, and the prices remain regulated. Table 5 and Table 6 shows the concentration in Singapore's generation and retail markets respectively Information obtained from https://www.ema.gov.sg/Statistics.aspx).


**Table 5.** Key generation players' share in Singapore.

**Table 6.** Retailers' market share in the Singapore.


With regards to RE, Singapore aims to achieve up to 350 MW by 2020 and 2 GWp by 2030 of installed solar capacity, the latter amount is sufficient to power 350,000 homes in Singapore [37]. However, RE prospect is limited in Singapore due to the limited land area. Nevertheless, efforts are made to source the RE from the neighbouring countries including Laos using blockchain-enabled market place for RE [38]. Both the Philippines and Singapore are relying largely on fossil fuel to generate electricity namely coal, natural gas and petroleum-based. Singapore has only about 3% of RE share due to the limited renewable energy options other than solar. Hydro resource is not available, wind speeds and mean tidal range are low, and geothermal energy is not economically viable. Figure 3 summarises the transitions towards liberalisation that the Philippines and Singapore have gone through.

**Figure 3.** Timeline for the electricity market reform in the Philippines and Singapore.

#### **4. Analysis and Discussion**

Taking into consideration the stark contrast between the two countries in many aspects, including geography and demography, the success of the Philippines and Singapore in liberalising their ESIs is worthy of study. Table 1 shows some of the differences. In terms of the country size, vast difference can be seen between the two countries, even though both are islands. The Philippines is an archipelago of more than 7000 islands clustered into three major island groups, Luzon, Visayas and Mindanao. On the other hand, Singapore is a tiny island and the smallest country in ASEAN with a total size of 716 square kilometres (km2). The country size is in itself posing different kinds of challenge to both countries in reforming their ESIs. It translates into the difference in terms of the population size, with the Philippines having 165 times more than Singapore. However, looking into the population density, Singapore is way more populous with 8358 people per square kilometre compared to just 363 overall in the Philippines. This serves as an indication of the economic growth of the countries, where Singapore is more advanced in terms of the economy in spite of the lower population and smaller size. As can be seen from Table 7, Singapore has the highest GDP growth of 7.1% in 2018 and has the highest GDP of USD 364 billion. Singapore has also been enjoying 100% electrification rate since at least 1990, while the Philippines is continuously working to improve access to electricity, which currently stands at 93% and brownouts are still common. Consequent to these, the electricity consumption in Singapore is more than half of the Philippines', so does its installed capacity. Additionally, in Table 7, information about Malaysia is also included. As can be seen from the table, Malaysia sits between the two countries in most of the attributes included for comparison, which provides a good starting point for the discussion on the prospect of ESI liberalisation in Malaysia. Representing the two extreme conditions, the Philippines' and Singapore's success in attaining full liberalisation of their ESIs can serve as the motivation for Malaysia and other ASEAN countries to follow suit. In the following subsections, analysis and discussion with respect to the four perspectives mentioned in Section 1 are presented.

**Table 7.** Selected demographic information of the Philippines and Singapore.


\* All data are captured as at 2018.
