The Group has continuously sought to deliver value to its shareholders, employees, partners and customers. We have created value by focusing on stability, diversification and growth in the following areas:

• Optimal utilisation of assets and lowering of portfolio costs
• Diversifying into related businesses
• Expanding our capabilities, assets and earnings of our core businesses
• Operational excellence and implementation of best practices

Here is a glimpse of our core businesses:

Energy Markets
The Energy Markets team plays the role of key intermediaries in each energy-related area that PowerSeraya operates in. By working closely with Utilities to optimise plant dispatch schedules, we have been able to reduce our generation portfolio costs. This is done through optimisation, adoption of a variety of bidding strategies and active pool bidding.

On the retail end, the internal teams work hand-in-hand to derive a competitive pricing mechanism that would optimise all financial commodity movements within the PowerSeraya Group. In turn, we have been able to support competitive pricing to our customers and at the same time ensure reasonable retail market share for the company. The prudent hedging management programme protects the revenue stream of the company by minimising adverse price and volume risks associated with vesting contracts and fixed electricity contracts and at the same time ensure firm prices to our customers.

PowerSeraya’s foray into Energy Trading has borne results through effective hedging that addresses the volatility of the fuel oil market while managing its fuel cost within an acceptable risks level.

This business is responsible for fulfilling the entire gas usage requirement of the company. We are also focused on optimising PowerSeraya’s portfolio of gas supplies by developing operational excellence and risk management in the gas market.

Trading & Fuel Management
Our physical oil trading arm, PetroSeraya, has been able to leverage on its physical storage capabilities to trade in physical fuel oil and optimise fuel-related assets. This physical trading arm has a two-fold objective: firstly to facilitate the purchase of our fuel oil in the most economical method by going up to the source and secondly, to maximise the use of the existing fuel management assets, which include 18 huge storage tanks and deep-water jetties. PowerSeraya’s fuel oil purchasing cost is a significant cost component in power generation. To create a stronger value chain, PetroSeraya added two new 25,000m³ oil blending tanks to improve the company’s fuel oil access and completed the reconfiguration of its fuel pipelines to optimise operational efficiency in oil transfer.

Utilities
PowerSeraya is the second largest power generation company in Singapore with a licensed capacity of 3,100MW. It has two gas-fired combined cycle power plants (CCPPs), that comprise two units of 370 MW natural gas fired Siemens V94.3As, six units of each 250 MW oil-fired steam plants and two units of each 105 MW open cycle gas turbine.

Our plant portfolio of baseload and peaking plants use a fuel mix of natural gas, industrial fuel oil (IFO), high sulphur fuel oil (HSFO) and diesel for power generation. To date, piped natural gas amounts to over 80% of our fuel mix; up from 30% a few years ago.

Despite having a lower Combined Cycle Plant capacity than our peers in the industry, PowerSeraya has successfully maintained its Generation market share of 28%. Our 10,000 m³ Desalination plant supplies high grade water for generation needs and in turn lower our non-fuel cost. There is potential for the plant to be an additional revenue stream as excess capacity can be sold to customers on Jurong Island. The establishment of our 800 MW Co-Generation Combined Cycle Plant will also allow the company to simultaneously produce electricity and supply steam to customers. These latest developments bring us a step closer to becoming a Multi-Utilities Services Energy Hub.

Retail
Our retail arm, Seraya Energy Pte Ltd was listed as one of the top “Singapore 1000 Company” in 2009 for its excellent financial performance.. Its relentless efforts to up its product offerings, services and customer standards has helped Seraya Energy maintain its stable market share of over 28% of the contestable customers who can buy electricity from the market. The company continues to capture the largest market share among private retailers and has secured its position as the market leader for two consecutive years in 2008 and 2009.

Through the diversification of our core business, Seraya Energy has been able to offer enhanced product and service offerings in the form of bundled solutions. For the more market savvy customers, Seraya Energy offers products such as remote metering, energy management, tenant management and interruptible load to provide their businesses with an additional edge.

Partnerships are key to building Seraya Energy’s customer base. Seraya Energy’s strategic alliance with United Overseas Bank (UOB) in September 2009 offers customers an alternative payment platform via UOB Credit Cards to bring them greater cost savings. It also collaborated with United Premas Energy to hold energy efficiency training courses for customers in 2008 and 2009 to enhance customer relationships.

Through our specialised account serving managers focused on different customer groups, strong in-house bill operation and a solid portfolio management team further ensures that we continue to expand our share of Singapore's energy retail market, amongst contestable customers.

The PowerSeraya Group has proven that it has an in-depth understanding of the relationships linking the generating plant, electricity retail market, wholesale electricity market and the fuel market. These four areas of our business have been successful in bringing out each other’s strengths and playing complementary roles to deliver outstanding results and value to the shareholders.