The Energy Market Authority (EMA) has launched a consultation paper and call for regulatory sandbox proposals to explore the benefits of virtual power plants (VPPs). EMA will also launch three new initiatives to harness energy demand flexibility potential in Singapore, announced Deputy Prime Minister Gan Kim Yong in his opening lecture at the Singapore International Energy Week (SIEW) 2024 on Oct 21.
A VPP is a digital platform capable of controlling, optimising and aggregating a network of distributed energy resources (DERs) across various locations to operate as a single generator.
DERs refer to assets like solar panels, small-capacity battery energy storage systems (BESS) and electric vehicle (EV) chargers.
By itself, an individual DER may not generate, store or consume a significant amount of electricity. Collectively, these DERs can be aggregated as a VPP to have enough capacity to work similarly as conventional power generation plants to provide energy and ancillary services to the Singapore Wholesale Electricity Market (SWEM), says EMA in an Oct 21 statement.
VPPs can benefit from receiving payments for their services provided to the SWEM, adds EMA. “In turn, VPP aggregators may choose to share some of these benefits with consumers with DERs participating in the VPP.”
EMA invites the industry to submit VPP sandbox proposals by Dec 31.
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To develop this initiative, EMA has signed a memorandum of understanding (MOU) with SP Group to collaborate on research and development for a VPP to participate in the regulatory sandbox.
The MOU involves deploying a 15-megawatt (MW) VPP comprising DERs like solar panels and BESS “in the initial phase”, says EMA. The VPP will participate in the electricity market to evaluate its benefits to the power system.
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EMA is also collaborating with SP Group to develop a roadmap for Singapore’s power grid. The Future Grid Capabilities Roadmap, to be launched later this year, will outline challenges associated with the changing context of Singapore’s power system and identify key focus areas to transform the electricity grid to manage new complexities, says EMA.
“By developing capabilities ahead of time and across various phases, EMA and SP Group aim to anticipate and address emerging challenges, ensuring a robust and future-ready grid,” says Singapore’s energy market regulator.
Demand flexibility
EMA will introduce three initiatives to harness Singapore’s “demand flexibility”, or the ability of consumers to adjust electricity consumption in response to the needs of the power system.
According to EMA, these initiatives will focus on enhancing Singapore’s demand response (DR) programme and enable BESS and EV charging stations to participate in the programme.
The DR programme helps manage and reduce overall system cost, says EMA. Between 2023 and mid-2024, the DR programme has resulted in over $700 million in savings for electricity buyers in the SWEM, such as electricity retailers, through reduced wholesale prices.
According to a study commissioned by EMA, over 400MW of demand flexibility potential remains untapped in Singapore. “Commercial sectors — such as those reliant on heating, ventilation and air-conditioning — show potential for load-shifting, while certain industrial processes, like those involving gas production, offer opportunities for rescheduling operations to off-peak times.”
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Through the new initiatives, EMA encourages business consumers to participate in the DR programme and voluntarily reduce their electricity usage in response to wholesale electricity prices during peak demand periods. In return, they receive a share of the savings from the reduction in wholesale electricity prices.
Enhancing the DR programme
EMA launched a two-year DR sandbox in 2023 to encourage participation in the DR programme. According to EMA, the sandbox more than doubled the registered DR capacity from 46MW to 103MW.
EMA says it will keep these enhancements under the regular DR programme when the sandbox ends in December. These include a lowered compliance threshold to recognise the nature of business operations, and two penalty waivers for non-compliance within the first six months of DR registration to allow participants to become familiar with the programme.
EMA will retain the 80% compliance threshold introduced under the DR sandbox arrangement. This means participants that deliver between 80% but less than 100% of what they promised will not receive any incentive payment.
Participants that deliver less than 80% will incur a penalty. Previously, the compliance threshold was set at 95%.
BESS inclusion
Meanwhile, businesses with BESS with nameplate rating below 10MW can apply to EMA by Feb 28, 2025 to participate in the DR programme.
With BESS, businesses can potentially shift their electricity consumption “more flexibly” from peak to non-peak periods and participate more frequently in DR, says EMA.
EV charging station sandbox
By aggregating charging stations across different locations and tapping on BESS resources, EV charging operators can respond to “DR events” by adjusting their charging speeds, says EMA,.
EMA is collaborating with ComfortDelGro C52 via a regulatory sandbox to pilot the participation of the latter’s EV charging stations in the DR programme. According to EMA, this will explore how ComfortDelGro’s network of nearly 1,000 charging stations can adjust charging volumes during DR events, helping to balance demand and supply in the electricity grid.
infogrpahics: EMA
