Lower electricity bills expected this year as global energy prices stabilise: Geneco CEO
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Mr Lim Han Kwang, chief executive of electricity provider Geneco, said that the drop in gas prices should give Singaporeans some reprieve.
ST PHOTO: MARK CHEONG
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SINGAPORE - Households and businesses in Singapore can look forward to cheaper electricity bills in 2023 as global energy prices begin to stabilise.
Mr Lim Han Kwang, chief executive of electricity provider Geneco, told The Straits Times in a recent interview that the steep drop in gas prices seen globally, as well as falling oil prices, battling rising living costs
“Singapore imports all its natural gas, and the price of the natural gas we import is pegged to global oil prices,” he said, adding that the bulk of the Republic’s procurements were based on long-term contracts.
“We have observed seven quarters of increase, starting in early 2021 through the third quarter of 2022, in the regulated electricity tariff as a result of higher global energy prices.
“But in the last two quarters, that trend has turned as prices ease.”
Energy prices rose further following Russia’s invasion of Ukraine,
But recent industry data suggests investors are turning bearish.
In the first two weeks of March, traders sold oil-related futures and options contracts at the quickest rate in almost six years, bracing themselves for the onset of a recession driven by tighter credit conditions, while the unfolding banking crisis keeps markets on edge.
The benchmark ICE Brent crude contract traded as low as US$70 a barrel in March, down from its high of US$88 seen earlier in the year.
“With the further easing of global oil prices, we can expect lower electricity prices this year as compared with 2022,” said Mr Lim, who cautioned consumers to not let their guard down.
“The market remains volatile, and any significant events that affect the global oil price will have a direct correlation to our electricity prices here in Singapore.”
Mr Lim, 46, said that consumers could better mitigate sudden price fluctuations by opting for longer-term fixed price plans instead of leaving themselves exposed to the quarterly adjustments seen in the regulated tariff.
“With the full liberalisation of the retail market, consumers are allowed to choose where they buy their electricity from, and for peace of mind, they can consider fixing their electricity rates for either six, 12 or 24 months,” he said.
While electricity prices are expected to be cheaper in 2023, he expects demand in the Republic to grow. This, however, will be at a slower rate of around 1 per cent to 1.5 per cent due to the cooling of Singapore’s economy as forecasted by the Ministry of Trade and Industry.
He said that in 2022, with the return of economic activities following the gradual relaxation of Covid-19 restrictions in Singapore,
“Electricity consumption in Singapore is closely correlated with Singapore’s economic activity. In 2022, we saw around 2 per cent growth in electricity demand as compared with 2021, with peak demand at 7,300 megawatts.”
Geneco, which is Singapore’s top residential electricity supplier serving more than 160,000 homes, has also been working on projects to reduce its own carbon footprint, said Mr Lim.
According to The Energy 2050 Committee Report released by the Energy Market Authority (EMA) in 2022, Singapore’s power sector now contributes about 40 per cent of the country’s emissions.
But the report also highlighted that the sector could realistically lower this down to net-zero by 2050, by importing more clean energy through regional power grids, developing infrastructure suitable for clean-burning hydrogen to be used as a fuel, and maximising solar panel deployment.
One of the initiatives launched since Mr Lim helmed the company has been Singapore’s first and only customisable green add-on for a residential electricity plan.
He hopes this will encourage more households to proactively contribute to the global effort to fight climate change.
“With an increasing awareness of climate change and the desire by consumers to contribute to the environment, we believe that the take-up rate of our Power Eco Add-on, Singapore’s first and only customisable green add-on, will increase,” he said.
Under the initiative, Mr Lim said consumers will get to choose the amount of carbon credits or Renewable Energy Certificates to offset the carbon emission of their power consumption when they sign up for a residential electricity plan with Geneco.
Since 2021, he highlighted that Geneco has pledged to plant 250 trees by 2025 in support of the Singapore Green Plan 2030, a nationwide movement launched by the National Parks Board in 2022 to plant one million trees.
“To commemorate our 160,000-home milestone in 2022, we went the extra mile and planted 150 trees in September, adding on to the 50 planted earlier in April,” said Mr Lim, who has been working in the power sector since 2002. “This reinforces our commitment to tackling climate change by playing an active role in greening Singapore.”
Among the other projects the company is currently evaluating that will help it reduce carbon emissions, it is studying the feasibility of retrofitting its existing power plants to run on a mixture of natural gas and hydrogen, said Mr Lim.
He added that YTL PowerSeraya, Geneco’s parent company, was also reviewing investments in hydrogen and ammonia cycle power plants, which is in alignment with the direction of national policy.
Singapore has taken a significant step towards promoting sustainable energy by implementing a National Hydrogen Strategy,
Mr Lim said hydrogen, an environmentally friendly fuel that produces no greenhouse gases when burned, was a promising option for reducing emissions.
The Republic’s strategy, first announced by Deputy Prime Minister Lawrence Wong at the Singapore International Energy Week in late October 2022, aims to establish a hydrogen ecosystem that can support various applications, including power generation and transportation.
Mr Lim backed the country’s hydrogen strategy, which has the potential to meet half of Singapore’s electricity demand by 2050 alongside renewable energy and imported electricity.
“We are optimistic about the future, and are committed to doing what’s right for the environment and future generations, as we support Singaporeans and the Government in the country’s transition to net zero,” he said.
