The Straits Times says

Seeing electricity costs in new light

As discussed during the ongoing Singapore International Energy Week, alternative sources like solar energy might be tapped more in the future, although the current target here is for solar power to meet just 5 per cent of electricity needs by 2020. And alongside the central power grid, which has been around for a century, distributed generation (multiple small energy systems) and microgrids fed by solar and other sources are arising.

As the overall energy scene gets more diverse, consumers will have to adapt to the changes. These were set in motion decades ago - such as the restructuring of the electricity industry, which was started in 1995 - to develop competition in areas which could be contested like the retail sale of electricity. Over the last 15 years, efforts to liberalise this market have led to more consumers being allowed to choose an electricity retailer, starting with the bigger customers. Last year, the threshold for such choice was lowered to monthly consumption averaging at least 2,000 kWh (costing about $400). The plan is to fully open up the market to competition in 2018.

Naturally, the first question on the minds of consumers is whether this long wait will lead to lower prices, with so many players making up the energy supply chain. These now include the power generation companies, Singapore Power (SP) Group (which owns and runs the transmission and distribution networks, and provides metering and billing services) and the Energy Market Company (the wholesale market operator). Apart from the energy costs to be paid, which vary with consumption, there is a market administration fee, market support services fee and network costs, all set at fixed amounts to be paid by all consumers. Smaller customers deal with SP Services, which applies a fixed regulated tariff adjusted quarterly. Later, pricing will be up to retailers (there are 20 listed now), which might offer a fixed discount or fixed rate over a contract's term, or lower rates for off-peak consumption.

Many might find a maze of plans bewildering. Some have asked if customised price plans will be well disseminated or geographically limited. Others wonder how market liberalisation, which has a nice ring to it, will really play out. Will it benefit a few industry players or the majority of end users? There is a possibility of even a smart metering system for the masses that could provide real-time information about electricity usage. But whether any meaningful cut can be derived from it by most domestic users is a fair question to pose. Essentially, many share a reader's view that the provision of vital services like electricity "should not make our lives more complicated". In wearing the two hats of industry regulator and industry promoter and developer, the Energy Market Authority should be alive to such concerns and shed more light to ease consumers' minds.

A version of this article appeared in the print edition of The Straits Times on October 27, 2016, with the headline 'Seeing electricity costs in new light'. Print Edition | Subscribe