Lifestyle

10 Facts to Know About S’pore’s Open Electricity Market Whereby Retailers Are Starting to Bow Out

2021-10-27 , 10:00 am

In the past month, we’ve learned two main things:

That Squid Game pales in comparison to the NOC saga
That electricity prices are rising

Electricity prices are rising so swiftly, in fact, that it’s causing retailers to leave the electricity market faster than Xiaxue can arrange an interview.

Unless you’re the one paying the bills, you may not be aware that Singapore is one of the few countries in Asia with a fully liberalised electricity retail market.

The Open Electricity Market (OEM) was launched in 2018, before which SP Group was the primary supplier of electricity to households in Singapore.

So, what is the OEM, and why are retailers bowing out of it?

Here are 10 facts you should know about the OEM, the market that’s seemingly getting smaller by the day.

Choices Abound

Liberalising the electricity market allows customers to enjoy more choices and flexibility when buying electricity, as they can choose plans which best suit their needs.

Customers can also benefit from competitive pricing and innovative offers from retailers.

The OEM began with a soft launch in Jurong before it was progressively rolled out to the rest of the country between November 2018 and May 2019.

The OEM Doesn’t Mean it’s Compulsory to Switch Retailers

As previously mentioned, before the liberalisation of the electricity market, households here got their supply of electricity from SP Group.

Even though customers have the offer to switch to another retailer in the market, it was never and is not compulsory to do so.

What’s more, switching retailers will not affect one’s electricity supply. This is because SP Group will continue to operate the national power grid and deliver electricity to everyone.

Since its launch, around half of household consumers in Singapore have switched to buying electricity from OEM retailers.

You Can Use Your U-Save Rebates to Offset Your Electricity Bill Even After Switching Retailers

Are you eligible for the GST Voucher U-Save rebate?

Well, what you may not know is that you can still use them to offset your electricity bill after switching to a retailer.

Typically, households in one- and two-room HDB flats receive U-Save rebates amounting to an average of about three to four months of their utility bills.

How the OEM Works

The OEM sounds complicated, but it’s really not. Here’s how it works:

Power generation firms (gencos) sell electricity in the Singapore Wholesale Electricity Market (SWEM)
Electricity retailers then buy electricity in bulk from the wholesale market and offer different price plans to customers

There are seven gencos in Singapore, and all of them compete to sell electricity to retailers in the wholesale electricity market every half-hour.

Prices for Natural Gas Has Risen Significantly Lately

As previously mentioned, retailers buy electricity from gencos, so they’re not the ones solely responsible for the amount you pay every month.

And it’s not the gencos either. To produce electricity, gencos burn natural gas which is imported from other countries, sometimes in liquefied form.

According to the Energy Market Authority (EMA), the price of liquefied natural gas has risen significantly in the past two weeks, causing higher price volatility for sustained periods.

This is why…

Three Retailers Exited the Market in a Single Week

That’s right, in just over a week, three electricity retailers announced their exits from the OEM recently.

The first to go was iSwitch Energy, which announced its departure on 13th Oct. This was followed by a similar announcement by Ohm Energy (15 Oct) and Best Electricity (19 Oct).

All cited volatile market conditions as reasons for their exits.

But that wasn’t all.

Another Two Retailers Have Dropped Customers Or Advised Them to Switch Retailers

Another two electricity retailers have either dropped some customers or advised customers to switch retailers.

On 18 Oct, Union Power said it was ceasing the electricity accounts of 850 retail customers.

Three days earlier, Diamond Electric had advised customers to switch retailers by 6 Nov this year.

All Affected Customers Will Be Switched to SP Group

In total, at least 120,000 electricity accounts have been affected by the exits and ceasing of accounts.

There’s no need to worry, however, as all affected customers will be automatically transferred to SP Group.

The bad news is that SP Group will charge you the regulated tariff rate, meaning you won’t be paying the same rates as before.

There Are Currently 9 Electricity Retailers in the OEM

With the departure of three retailers, there are now nine electricity retailers left in the OEM, namely:

Diamond Electric
Geneco
Keppel Electric
PacificLight Energy
Sembcorp Power
Senoko Energy
Sunseap Energy
Tuas Power Supply
Union Power

Electricity Prices Have Risen and May Continue to Rise

The rising energy prices won’t just affect retailers, of course.

At the moment, the quarterly household tariff is 24.11 cents per kWh before GST, which is the highest its been in over two years.

This can be attributed to the fact that 95% of our electricity is produced using natural gas. The sudden volatility can be attributed to the increased gas consumption as countries resume economic activity amidst the pandemic.

And with more and more countries opening up, prices could increase further.

Reader: I thought this was Goody Feed. Why do you keep bringing me bad news?

Our articles merely reflect the state of the world, dear reader.

To prevent your jaw from falling every time you check your electricity bills, follow these energy-saving tips:

Use Energy-efficient Appliances – if you prefer the bright, blinding white light of your room, make sure to use energy-efficient appliances such as energy-saving light bulbs to lower your energy consumption
Use Fans Instead of AC – it’s nice to fall asleep with the air-conditioner blasting in our faces, but do we really need it when we work? Use a fan instead, and save electricity
Use Natural Light Whenever Possible – unless you’re a Goody Feed writer who only works from 9pm to 6am because we melt in the sun, you can make use of the glorious sun throughout the day to light up your house when working
Meal Prep -Unbeknownst to many, the microwave is the most energy-efficient appliance in your kitchen, so you should try meal preps, just as you would when working in the office, as it saves time and energy.