Demand response program in Singapore's wholesale electricity market

•This paper provides an in-depth review of Singapore's wholesale electricity market while highlighting the key constraints which are imposed by Singapore's PSO. This review offers valuable references as Singapore's electricity market is well-known for its reliability and maturity.•This paper investigates the newly introduced DR program, which is Singapore's first initiative allowing consumers actively managing their loads, with an emphasis on the program's salient features which are designed to smoothly introduce DR into the current regulated market. This study serves as a valuable and instructive example for the market deregulation practice, and particularly to those markets intending to take the first initiative to introduce demand response.•This paper includes the detailed mathematical formulations and various case studies to clearly explain the co-optimization of the market clearing process for both energy and ancillary services.

Singapore is going to implement a demand response (DR) program to further enhance the efficiency and competitiveness of its electricity market. This paper aims to provide an in-depth investigation of this DR program which features demand side bidding and incentive payments. First, the current market clearing model (MCM) of Singapore's existing wholesale market, which has no demand side bidding, is introduced. A mathematical model of the MCM is formulated to explain and solve the current market clearing process, where the energy and ancillary services are settled simultaneously through a form of auction pricing. Second, the mechanism of how the demand side bidding is incorporated into the current MCM is explained, with an emphasis on the demand side offer and the newly introduced constraints. A modified MCM with DR is then formulated. Third, the incentive payment mechanism intended to promote DR participation is elaborated. Numerical analysis is performed to demonstrate how the current MCM and MCM with DR work, as well as how the incentive payment is settled. Various numerical case studies are carried out to discuss the economic benefits from participating in the DR program.