Pensa | THE NEW ENHANCED DISPATCH | ARRANGEMENT (NEDA) Briefing Session Thursday, 28" July 2016 Today's AgendaToday’s AgendaSegment 1: How things work today SERED —Cepacty Dereraton Schedules Cee CUT Avatity & | ae Settoments Segment 1: Introduction — what is NEDA? + The New Enhanced Dispatch Arrangement (NEDA) is designed to enhance competition and cost efficiency of the Single Buyer market. + The main objectives of NEDA are as follows: = Enhance cost efficiency in generation through short-run competition; = Enable energy efficient options, particulary the use of efficient technology sich a co-generation, re = Provide opportunity for ndn-PPAYSLA Generators such a co- generators, renewable energy generators/producers, embedded Generators and expired PPA/SLA Generators to operate as Merchant Generators to sell energy to the Single Buyer; = Enable expired PPA/SLA Generators to enhance their business options by maximizing the use of the existing faclities ina cost efficient manner for the benefits ofthe electricty supply industry. | «Poon Powase gummed CHAD BI Can) eeeSegment 1: Introduction to NEDA operations and/or VOR lower than contracted levels; eligible parteipants wil submit pie qantiy bids T submissions to produce the Day-Ahead Schedule € Data, tannig + Grd system Operator (650) rerun the Schedule when required and issues rea time dispatch Instructions + SBsettles payment + PPA & SLA holders wil submit hea ate @) | com SSE, ae e as = @ z [—< cos | +f i NEDA Sateports| Today’ 's Agenda NO reesei rc dug MP ning te NOAHSegment 2: Types of participants ‘small generators ‘between 100k: 30m Not presently | partof NEDA smecoasiou | sat 4 Bal dispatchable wee30 MW .ranchie tity Stee Segment 2: How different types of participants participate | CTSA EMR RR LervsAides eset Hest ate Own FA/SAlefor Faas Sriforvon fate VOR ered PASAndMeS VTL Heat rearean — eS rayasts ae Shine oped tate Creiitee 3. Maca eestor 0M Prceuatty pet Peep rors ‘.ceee/ranciseutiypaP Pergnang —Preequntiy recap rors sired exes cpt | 5. cegnroniuteae Perr red rare sytem aria | Scone 100000 wot (niectoprooatemetrag ergata) cele) | S.Fancisevstywhrepsted NUR Pre the no pre idea sue | faces easton 10 tbe tsp metering being ste) “LNon-dispatchabe E220 MW LSSREWith Not present part ofNEDA ince itis nt cently patchedSegment 2: Price/Heat Rate/VOR Caps Bids by generators are subject to a cap. SB will publish the monthly caps (i.e Price/Heat Rate/VOR caps) for the upcoming month by the third week of the previous month. There follows an illustration of how the caps are calculated. 4 Identity the most expensive centrally dispatched PPA/SLA thermal genertor (Gon primary fuel avaliable for espatch using simple ment order stack 2. Calelat te caps. follows 2, Calculated waighted average fuel price for the month | Price p= MAX(Heat Rate, x(a) + VOR) ‘Heat Rate Cap=Heat Rate, SSS Today’s Agenda joo ees twine (Sains ag en ang eo Ay oe saree mene [ome Rt Sea is202se0 “Segment 7A day the ie of NEDA | iso sent haan mere| Today’s Agenda pe catia | oe | a “Segment 3: NEDA Contr\ ctual “mle jee Framework (1/3) ~ +3 Agreement to cete NEDA contact anew eos romenor:Areemert, : eget eee ae copaenty me Regering Taal Now + NEDA Framework Agreement feats! eS = What does) makes the NEDA Rules contfactualy enforceable as between all market participants; and {i gives Single Buyer authority to allow future partes to accede to NEDA Framework Agreement; i) makes effective the limitation of bility provisions inthe NEDA | Rules forthe benefit of al parties | ~ Who wil sign: $8, 50 and all merchant NEDA Participants participating at “Go-tive" Date, | ~ Who wil be « party: multilateral all NEDA parties including TNB ints capacity as TN, | ‘Generetion, Single Buyer and G0. | How do PBA/SIA holders become party: PPA/SLA holders will accede via the Supplemental | Agreement = How do future parties accede: via NEDA Accession Agreement Inthe case of merchant NEDA Partelpants or via future PPA/SLAS inthe cas of future PPA/SLA holders)Segment 3: NEDA Contractual a Framework (2/3) [NEDA Supplemental Agreement (PPA/SLA) What does: (amends PPAS and SLAS in place with Single Buyer to ensure NEDA Participation doesnot affect rights/bligations under PPA/SLA; i) allows PPA and SLA holders to accede to NEDA Framework Agreement as orginal parties (to avoid signing ‘two agreements) and (il) tallow PPA and SLA holders to declare a lower heat rate andor oR. Who sans: PPA and SLA holders. Who willbe party: bilateral, between each PPA/SLA holder and Single Buyer [NEDA Accession Agreement What it does: allows future parties to accede to NEDA Framework Agreement and ‘become a NEDA Party Who sans: future parties Who willbe o party: the incoming party andthe Single Buyer (on behalf of al existing [NEDA Partes) 8 wil maintain list of NEDA Participants on ls website. | Segment 3: NEDA Contractual a Framework (3/3) + How to cease being a NEDA Party: 1. De-registration: will occur in specified circumstances, for example if a NEDA Participant is inactive for a period of one year. 2. Voluntary withdrawal: will allow a party to elect to cease being a NEDA Participant pursuant to the procedure set out in the NEDA Rules aSegment 3: Status of NEDA a relative to SBRs and PPA/SLAs In the event of a conflict between provisions, the order of precedence i as follows: ‘Amended PPA/SLAS will EVAN prevail over NEDA Rules NEDA Rules will prevail NEDA Rules over Single Buyer Rules Seemed SE BER ign apart put A950 Segment 3: Legal Registration Process + leformation provided to ST we Single Buyer, ating on behalf of ST + Selected information verifies by SB/SO ly + opoortnity to raise queries with NEDA Participant * ST confirms registration s accepted by sue of Framework Agreement/Supplemental 1G Aereement/accession Agreement ~ NEDA Participant signs and sands back to the appropriate agreement within 2 soecited period + Following escuton of the agreement, Single Buyer Issues notice to NEDA Participant BA confirming that its now a NEDA Party as from the date of the notice rtSegment 3: Legal Registration Requirements (except for PPA/SLA) In addition to technical parameters, there will be a number of legal criteria required for registration as a market participant. Each prospective market participant should have and be able to confirm (with evidence where required) ‘A generation licence issued by ST Fuel arrangements in place Confirmation of adequate metering for settlement ‘Aconnection point for export onto the electricity system with sufficient capacity Contact details for communication, service and notification Bank details for settlement and other financial operations No ongoing material disputes or default of any material agreement Other matters such as corporate authority to enter into agreements —_—_ __| Segment 3: Technical parameters to be | registered with ST For non-PPA/SLA generators, verified (In green) technical parameters need to be registered. | Were) Mosc eas a Primary & unit(s) fan) COM fete Pe eae OR, default a : BS generating unit(s) pee quantity ere pee micalpeet ree ea aaa Cet eeeMarket Participant Interface (MPI) ‘+ MPLis the window to NEDA portal for submission of bids and receipt of reports and data sree radng Partcants For itetation purpose onlyToday’s Agenda sano Segre ow tng work & ations ADA ee Sore DN apetine 22820 peti bara hetng dpah 0 eter opt econ soso __seenen 7 Asoyne He otNEON se0ii0 Segre Walrunbunlne i} RSET _ Segment uel management for expired PPA/SLA under Power Sector Gas Definition of Power Secor Gas Power sector gs that which covered in the Gas Framework Agreement (GFA) between TNB and Petronas + Thisprovides gas at a regulated price Generators entitled to power sector gas for thelr contractedfregistred capa ere rues || ets ve holders, + Allgenerators who receive power sector gas wil bid heat rates and VOR. Their energy Dayment calculated based on cared a e MI i . LLLL—_<<Segment 4: Fuel management | Re-registration of fuel for expired PPA/SLA holders | Bee fuel A As the GFA gas volumes are forecast by the SB on an annual basis, the change in fuel arrangement will only take effect at the year end. Hed we = kui Gas Puce. Oe Cried Poesia ea Cong eed “shout gnestor—Thsiteaidasa fmt othe | Gonetutectsouce, "tegtatin vow en yer | the generator will amendment which will | Meftregirtis tec Smoot | ————— Today’s Agenda fim eo | | [suai span prot pariane Ean gremer repens nln MP. cengta ba NEDA Par | | [zero Seer: Sovran of DA | {seas Segment anna sonar aaa Concanernan ceca tTToday’s Agenda Fine Tene [ssoaoso_—_Sepnen How tng wrt Xraticionto ADA ovosim pean geen per ion ot cde MP cenit be MDA at | oe Eiamacae [ Segment 5: NEDA operations - Pre-bidding Information availability timeline on MPI + Forecast half-hourly SMP based on indicative Day Ahead Dispatch Schedule Forcast demand pote wed or Day Anes span inate schedules foal generators Jemand profil forthe week ahead ‘week in aerears of historia hall-hourly SMP ‘Heat rate/VOR/price cap forthe fllowing month + Generation and transmission constrains ._— ES SLE BER ng zed cape passat S550 y ws| Segment 5: NEDA operations - Pre-bidding | System marginal price The half-hourly SMP is defined as the price of the most expensive unconstrained generator scheduled to meet demand in the half-hour. ‘nunca reratr is defined asa generator thats ntrally dopatches jt ramping at maximum rate it generating a minimum stable load or maximum load it testing unit sunning under normal conditions (eg. no gas curtallment) sunning on primary fue Segment 5: NEDA operations - Bidding Gate opening & closure Gate opening :10 am Day-2 Gate closure : 10 am Day-1 Mondsy ——Thndy eidoy Tuesday aay Monday Thursday Tuesday Wedesay Fedsy Wednesday Thustay smurésy ——Thaeéay Fray Bid periods | 2 periods (peak and off-peak) comprising 10 bids each (Le. 20 bids in total) Period 1 : 0800-2159 hr for all days — Period 2 : 2200-0759 hr forall days sadSegment 5: NEDA Operations — Bidding Heat rate/VOR bids for PPA/SLA holders PPA/SLA generators can submit heat rate and/or VOR offers that are lower than thelr PPAYSLA rates. Heat rate bids submitted must follow the format ofthe PPA/SLA \VOR bid: 1 bid for each period Example of PPA/SLA heat rate curve and reduced heat rate curve Segment 5: NEDA Operations - Bidding Heat rate/VOR bids for expired PPA/SLA holders | Expired PPAVSLA holders id heat ate and VOR, Gen price + 2 tm 28/5) + Heat ate table concontin upto 2OPoints hat valet SEA tog Tech eee eH + VOR bid: 1 bid for each period + Minimum block size is 10 MW da MOY PSUS ae) 400826 75280 12569 12408 12284 12058 14855 11688 an 612 1135) 11248 11378 (ope “ewan 22 | Example of 10 points on a heat rate curveSegment 5: NEDA operations - Bidding Price quantity pair bids for merchant generators | What are price quantity pairs? + Price-quantity pairs (up toa s ‘maximum of 10 bids for each bidding period) are submitted by eligible Merchant Generators. g» | + Bids are monotonically increasing ¥ » (ice. always increasing). ‘Minimum block size oem were n me mm | ‘+ Minimum block size is 10 MW on cog EERIE SHGLEBUER ign apart : NEDA operations - Bidding Bid revisions Segment ‘After gate closure: Ter’ Coen eer) Before gate closur ee eee ed bar Pageants + Participants can submit multiple * Only be accepted where plant bids, with each new bid overriding constraints require the available the previous one, up togate closure capacity be reduced. at D-1 1000hrs, + Bids remaining in the system at gate closure will be used in scheduling, dispatch and settlements.Segment 5: NEDA operations ~ Scheduling & Dispatch (1/2) Start up cost for Merchant Generators & expired PPA/SLA holders + Start-up cost is considered only for scheduling and settlement of fast start plants. + Fast start plants are defined as plants capable of at least two- shifting. Segment 5: NEDA operations — Scheduling & Dispatch (2/2) Part-PPA holders with registered excess capacity isi utiguraticn fe traded in NEDA are treated as two virtual ‘merchant and expired generators (VG), one PPA generator and one Dees holla: merchant generator. Plant owner decides ‘what configuration eT in ic tose todeliver the ‘offered electricity ear Beese Segment 5: NEDA operations — Failure to meet dispatch instruction (FDI) & Cancelled Start for Merchant Generators asmetered) FI consequences © ent * Exemptions forced outage; merchant generators under GSAS who fll to meet dispatch instruction due to gas curta ‘+ However, the event the FD give rise to concern, refer to NAU Impose adaltianal conditions on the relevant merchant generator including (consistent withthe TNB Short Term PPA) an FDI payment of 150 RM/MW ayable bythe generators for each occurrence of FO such circumstances, a merchant generator would be charged at 150 RM/MW x the difference in MW between dispatch instruction and actual generated level startup cost Cancelled start compensation for Merchant fast start plants + Generators that havea start cancelled by the GSO willbe compensated at offered + tf NEDA Party believes that additional compensation are required, they may | raise a Rule Change. Segment 5: NEDA operations — Settlement + Settlement forall participa the participant's invoice. ‘Care + if there are unresolved disputes, settlement will be carried out according to 8's, | Payment atheat Payment able fevORasbid "pee assessment of the amount payable. ert fo peer cbr is carried out monthly in areas following receipt of fat wld own cel GOP Payment for PPA fame a PPASUA older ON| Segment 5: Dispute Resolution a | Procedure (1/2) + The NEDA dispute resolution process aims to: = be simple, quick and inexpensive; — preserve or enhance the relationship between the parties to the dispute; = place emphasis on confict avoidance; and = encourage resolution of disputes wherever possible without the involvement (of ST, formal legal representation o reliance on legal procedures + A dispute will be initiated by a party serving notice on another. ong ye | + there witbe | remem) Segment 5: Dispute Resolution Procedure (2/2) + A Trading Dispute would in broad terms be ether: ~ a dispute relating to settlement, prices or related trading charges, including disputes relating to data, processes or application of rules for settlement; = any disputes relating to data or for determining a participants credit default; ~ disputes relating to the calculation of electricity trades e.. dispatch quantities or interest amounts. | + AMorket Dispute would in broad terms relate to any disagreement, diference of | ‘opinion or any other dispute between SB and a NEDA Party or disputes between | NEDA Parties themselves in relation to the NEDA Rules which is not a Trading | Dispute. | | + Both Trading and Market disputes will be determined by the process set out in previous page * Right to appeal decision of NEDA Disputes Resolution Committee to ST. ST decision | Js final and binding ETT _—— | scueures ang net epartmer punt A250 | iiacacaannc annaToday’s Agenda | [soa win nomenon | noc stesso feroiz0 _pebisAveemens resto ree ic MP ease be 2 NEDA PY st00 __feowent7 Ady te aNEOA [ Segment 6: NEDA Assessment Unit (1/3) 4 + ANEDA Assessment Unit(NAU) willbe set up within Single Buyer. ts main functions and powers will deta = Proactively monitor analyse, assess and report on the market; Issue periogic reports, opinions and recommendations to ST = Identity improper exercise of market power and/or fraudulent behaviour such as: ‘+ Withholding capacity/generation; misuse flcenseé/contracted activites; nd gaming the NEDA Rules; Advise ST a5 to mitigation actions and coordinate their implementation; Propose to ST the revision of max/min prices; = Analyse and make proposals to ST regarding consolidation or divestiture inthe power | market and | Recommend and sponsor changes to NEDA Rules, structures and operation. “+ NAU willbe safes with Single Buyer and GSO personne, which wll work fulltime within au, + NEDA Participants must maintain and provide alinformation requested by NAU in timelySegment 6: NEDA Assessment Unit (2/3) “+ NU wil, ta minimum, provide a monthly report to ST regarding its day-to-day monitoring activity, “+ NAU wil report to ST on suspicious activity detected e.,breach of NEDA Rules or applicable tow). + NAU may intitean investigation based on the suspicious actvty detected, with dscipinary ‘ction taken by STon the bass of @ NAU report. The NAU may make recommendations to ST regarding disciplinary actions. | conducts subject investiation (Not ited these) | | + tvestigatons can ve nts by way offeror complain from any source | + Ofers beyond costs or opportunity costs + NAL may mae public that invesgtion + Wwilang eapscy or generation ages - | |= aun to maniplte pices + aU may not alse ide of party + heats hat rete or eacerbae ferences a fede arto stele Prices without bing jn the costs Publeation of vents | \ | \| * Remaster afectorredicethe || Gamage ares of reputation it Srother gat + Snap eco rete and ident — | Segment 6: NEDA Assessment Unit (3/3) | Example reporting outputs Content of monthly report a + Price trends ~ SMP, magnitude and duration of price spikes + Costs ~ Spark spreads for gas and coal + Customer complaints - number of complaints received, progress in Contents of investigation report + Summary of incident ~ a short description ofthe incident + Findings =the NAU's findings as responding and resolving complaints + Market anomalies numberof incidents || SwBported by relevant data and + Other matrix as appropriate following | _‘Tecommendations to Cae discussions with NEDA participants irrnren Rel [pete eececetnennent eonSegment 6: NEDA governance — a Suspension of NEDA ‘Where there is an averidng emergency which requires immediate action to maintalnthe safety and security f the power system, the G50's exiting rights to take appropiate steps under MGC ‘would apply. Separate to that, there wll aso be the ability to suspend NEDA where ppropriste, | in an emergency situation. A suspension of NEDA Is defined as a period af time for which the NEDA rules fo scheduling, dispatch and settlement are waived + Example of situation where During the suspension of + Settlements wil be based NEDA may be suspended is” NEDA, the GSO wil ‘on administered prices and ‘when an emergency dispatch power soasto volumes ealeulated "tuation has been ‘maintain or return the following the resumption suthorty. operation, declaeabyterelevnt ——_powersytem tonormal——_of NEDA | | ! Rule Change mmmmcaecnoioc | sms erence ca erent susie of341999 Segment 6: NEDA governance - Rule Change “The NEDA Rules wll includea Rule Change mechanism, to ensure that NEDA can adapt to market evolution ‘ky NEDA Party may submit Rule Change Proposal in writing to the Single Buyer Single Buyer wil make an tial determination whether the Rule Change Proposal should be ‘considered fr further assessment or rejected. Rejected proposal willbe notified to ST. tf the Rule Change Proposal has merit and shouldbe considered, the Single Buyer wil develop and expand the Rule Change into a fully dated rule Single Buyer wal convene the ule Change Committee ‘After consideration ofthe Rule Change Proposal, the Rule Change Committee wil provide a ule Change Endorsement Hotce ora Rule Change Rejection Notice to the Single Buyer ‘Upon conclusion of Rule Change Committe deliberation, Single Buyer wll review and make recommendations to ST. ‘ST will review the Rule Change Recommendation and other supporting information received from the Single Buyer ST's dechions wil be implemented by Single Buyer ‘ST retains powers to implement an Urgent Rule Change inspected circumstances,Today’s Agenda TT —————— | Today’s AgendaSegment 7: A day in the life of NEDA | Timeline for Day D for generators who bid | stwker previous month 9-2 1000 hrs Day 00000 hrs | Receive eat | Start bidding Generate following | ratervor/price | for Day D clspatch instruction caps | 30 days ator receipt 0-11000 hes of actuol invoice | End of bidding Receive payments | for Day from 8 D-2.1700 hes | | End of previous wie Receive forecast Receive demand profile for demand profile and 1 wicof the following the upcoming week and 1 Dispatch Schedule month’ || weettin arrears of historical for Day Submit invoice to $8 hall-hourly SMP | Segment 7: A day in the life of NEDA Timeline for Day D for price takers | 0.1200 tesa feast hoary SM for Dey 20 daysaher receipt of au | ioe Receive payments from 1 wkot flowing End of previous wh Salih month Decare avalabity Submit invoice to Receive demand profefor eae walably the upoming week and = weekin ares of stort halF-nouy SP EE t__Today’s Agenda scan toner Ongar | ene Towns WET | rt rms shin bees nag es bea Pay | fisoano hala | frmesao jis20a5e0 ‘Seger 7A dan the ie of NEDA | Segment 8: NEDA trial period (1/2) ‘The objectives ofthe tral period are 1 to assess and fine-tune the operation of NEDA; and 2. toallow partis (e.g. generators, $8, 650) to familiarize themselves with the | ‘operational and financial implications of NEDA without any financial risk to the stakeholders. During trial period 2 parallel work streams Stream 1 Current practice: physical operations and settlement will continue to follow the existing processes and ruleSegment 8: NEDA trial period (2/2) Measurements for success of NEDA trial mode to go live KPIs to measure the success of NEDA trial to give an indication of when it would be appropriate to move on to NEDA ‘live’ * Generator bids (Merchant generators, PPA/SLA holders) received and successfully scheduled on % of days + SB personnel designated + NAU operational with monthly reports to ST | ‘+ MPIis available + Settlement calculations and processing are validated for all {generators including price takers Segment 8: NEDA trial period (3/3) + Froma legal perspective, the NEDA tral period wil be implemented s follows = Tapartspte forthe fl ra period NEDA artcants wll neato gre tothe term &condensfor | = Late parcpats wil ony be able to partcpate forthe remainder ofthe period but may nt be fvarantoed readiness forthe Gove’ date Tal prog wi Hof by Seng to paripant a Til Note epetying the “al Commencement ~ Ti peri wirun fora minimum of 6 months, esnning onthe i Period Commencement Date and NEDA Prtpants wil sign NEDA Agrermert etre Gove ~ Tra paid wi end once kPishave boon met to SPs satsfacton, Ruts ave Been issued an ‘GoveSegment 8: NEDA timeline Targeted pathway forthe rollout of NEDA 1. pied PPA holders 2, Merchant generators = 30 MW with own fuel (e.g. Cogen, part-PPA holders, franchise utilities, new generators) 3. Cogen/RE generators between 100 kW - 30 MW Note: This timeline assumes that the IT syster/MPI will be fully operational by | | december 2016 Today’s Agenda ne Teor | ec isceso __Sagner ow ting nn ly Aodhan EDA fsoacio segment hae apeicpane | aioe) xb i} moany Sener Hawa ba ORT EDR enon region ces nde MP cnn be = DAF fzeaise __Seemett fotmaraanent Toaouny Sener EDN apeaane Fe biang bg el pth steer ite reson fsoasio aera 7 hanno tAEON | 03880 Segre Haran ne