In the second half of 2018, everyone who consumes electricity in Singapore will be free to shop around for the best deals in the market.
That is because the Energy Market Authority (EMA) plans to fully open up the electricity retail market to competition, Mr S. Iswaran, Minister for Trade and Industry (Industry), said yesterday at the opening of the Singapore International Energy Week.
This means consumers will have the choice to buy electricity from electricity retailers under customised price plans, similar to the way customers choose mobile-phone plans from telcos. This will allow these customers to get the best deal based on their usage patterns.
Currently, only some 33,000 commercial and industrial consumers with an average monthly electricity consumption of at least 2MWh - which amounts to a monthly electricity bill of about $450 - benefit from this flexibility. This threshold was last lowered from 4MWh to 2MWh in July. The remaining 1.3 million consumers, mainly households, are on the regulated tariff with SP Services. But that is set to change.
Dr Shi Xunpeng, deputy head of energy economics at the National University of Singapore's Energy Studies Institute, said: "This free choice and competition among retailers will give consumers more customised electricity supply, better services and probably lower prices."
He pointed out that with full liberalisation in Texas in the United States, the average electricity tariff with retail competition is 5.5 per cent lower than the national average. But Dr Shi noted that it is not yet possible to quantify the benefits for Singapore customers.
This would make Singapore the first liberalised energy market in East Asia, he said.
Professor Subodh Mhaisalkar, executive director of Nanyang Technological University's Energy Research Institute, said data from places such as Europe or the US shows that households could enjoy savings of between 5 and 15 per cent due to competitive pricing by multiple utility providers.
But he added that additional savings may be possible if there is a shift in consumer behaviour, by running heavy-duty appliances like clothes dryers or ovens at night to benefit from lower, off-peak electricity prices, for example.
Madam June Tan, a nurse in her 50s, said more choices could benefit consumers if they translate into lower electricity prices. "I hope the price plans will not tie us down for years, but instead leave us free to choose again after a short period, for example, one year."
She added: "It's pay-per-use now, so electricity providers must give us ample notice before they roll out the price plans."
Yesterday, Mr Iswaran also gave out the EMA's biennial Singapore Energy Awards to the Housing and Development Board for its use of solar panels and to Mr Neil McGregor, former chief executive of the Singapore LNG Corporation, who oversaw the building of Singapore's first LNG terminal.
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