EMA Developing Future Grid Capabilities Roadmap, Consults on Benefits of Virtual Power Plants via Regulatory Sandbox

Singapore is on a journey to decarbonise its power sector. This journey will result in Singapore’s energy supply mix becoming more diverse and the growing use of domestic solar and electricity imports. Further, the electricity grid will become more complex with the inclusion of distributed energy resources (“DERs“) such as rooftop solar panels, battery energy storage systems and electric vehicle chargers. It is anticipated that as Singapore moves towards net-zero emissions by 2050 there will be a proliferation of DERs. These changes require Singapore to develop its capabilities for the future electricity grid to support the power sector’s decarbonisation transition. In preparation, on 21 October 2024, the Energy Market Authority (“EMA“) announced the two initiatives below:

  1. Future Grid Capabilities Roadmap (“Roadmap”). The Roadmap, developed by EMA and SP Group, 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, such as:
    • harnessing DERs to enhance grid resilience;
    • enhancing grid planning, control and maintenance efforts via the development of digital solutions; and
    • exploring solutions to maintain grid stability as the share of renewable energy sources is increased within the energy mix.

The Roadmap will be launched later in 2024 and will set the direction to build Singapore’s future grid capabilities via a combination of research and development, pilot projects and deployment efforts.

  1. Regulatory Sandbox for Virtual Power Plants. EMA has launched a Consultation Paper and Call for Regulatory Sandbox Proposals to explore the benefits of virtual power plants (“VPPs“). This is part of the efforts to harness DERs. Individual DERs may be small (usually less than 10 megawatts each) and are distributed across multiple locations in Singapore. It may not be commercially viable for each DER to individually provide services to the grid, as this requires using expensive pilot wires between each DER and the grid.

A VPP can be used to increase the commercial viability for DERs to provide these services. A VPP is a digital platform that can control, optimise, and aggregate a network of DERs across various locations so they may operate as a single generator to provide energy and ancillary services to the grid.

Currently, there is no regulatory framework that allows for the aggregation of DERs via a VPP to provide energy and ancillary services in the Singapore Wholesale Electricity Market. Given the potential benefits that VPPs can bring to Singapore’s power system, EMA intends to pilot VPPs via a regulatory sandbox to inform the regulatory framework for VPPs.

Under the sandbox, each VPP shall aggregate DERs and register as a single Generation Registered Facility with the Energy Market Company (“EMC“) to provide energy and all ancillary services to the grid. The DERs managed by the VPP will not need to register individually with EMC. EMA will assess the outcomes of the sandbox based on the VPP’s technical ability to meet stipulated compliance thresholds and provide benefits to the system. The Sandbox will have a one-year duration, and its parameters and criteria are detailed in the Consultation Paper.

Further, EMA has entered a Memorandum of Understanding with SP Group to collaborate on the research and development for a VPP to participate in the regulatory sandbox. The VPP will participate in the electricity market to evaluate its benefits to the power system.

EMA invites proposals for the regulatory sandbox, and industry feedback on the parameters for the sandbox. The consultation period closes on 31 December 2024, and feedback can be submitted via EMA_ECDD_Demand@ema.gov.sg.

In our view, the Regulatory Sandbox for Virtual Power Plants is an important step forward, especially given the number of solar projects which we have seen and have been involved in Singapore, and the economies of scale will be an important factor. If successful, this may also have the potential to lead to consolidation of DER assets and companies in Singapore.

Click on the following links for more information (available on the EMA website at www.ema.gov.sg):


 

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