Disclaimer: I am writing as a layman who do not work in this industry. What i write is what i read and interpreted. I am a noob.
The poster child of Singapore has runned into difficulties.
So what led to its fate?
It has been stated that Tuaspring is the one that broke Hyflux due to the excess capacity in the local electricity market. Hyflux is unable to sell Tuaspring at book value due to losses, so she is unable to repay creditors, suppliers and other securities.
So why is there excess capacity in the local market in first place?
From my limited understanding, to curb Gencos from exercising market power, Vesting Contracts were put in place between SP power ( the distibuter of electricity) and the gencos. Each Genco is commited to sell a fixed amount of electricity (MWh) at a fixed price, called the Vesting Price. The intention …