Moves to boost energy security helped reduce wholesale market prices

Measures taken by regulator Energy Market Authority (EMA) since October last year have helped to push down the wholesale electricity price, which changes every half hour.

Minister for Trade and Industry Gan Kim Yong said in a written reply to a parliamentary question on Monday that the average Uniform Singapore Energy Price - which refers to the half-hourly energy price in the Singapore wholesale electricity market - in the second quarter of this year was about $300 per megawatt-hour (MWh).

This works out to be about 30 cents per kilowatt-hour (KWh)

This is down from the average price of $440 per MWh, or 44 cents per KWh, in the fourth quarter of last year when global energy prices started to spike due to growing demand for heating in the cooler months and economic recovery.

Figures from EMA's website show that the average half-hourly energy price for the third quarter of last year was about $153.07 per MWh, or 15.3 cents per kWh.

Last October, EMA said it would take steps to boost the country's energy security amid the global supply crunch. This includes the establishment of a standby liquefied natural gas facility to stockpile the fuel, which electricity generation companies (gencos) can draw from in the event of supply disruptions.

"We also required gencos to bolster their own stockpile of fuel and empowered EMA to direct the gencos to generate electricity using gas from the (facility) if there are potential shortages," Mr Gan said.

He was responding to Ms Poh Li San (Sembawang GRC), who wanted to know how Singapore was ensuring the reliability and affordability of its electricity supply.

It is mainly large electricity users, such as malls and manufacturing facilities, that are affected by fluctuations in the wholesale market.

Currently, such users, which have an average monthly consumption of at least 4,000kWh - about 10 times that of a four-room Housing Board flat - can buy electricity only from retailers, or from the wholesale market, where electricity prices fluctuate every half hour.

Households have the option of buying electricity from grid operator SP Group at the regulated tariff, currently at 32.28 cents per kWh including the goods and services tax.

But volatile gas and electricity prices, and risk of piped natural gas disruptions, had limited the retailers' ability to offer fixed price contracts to large users.

To cushion the impact of fluctuations in the wholesale market, EMA in December introduced the Temporary Electricity Contracting Support Scheme, which lets businesses buy electricity at fixed prices.

"For businesses who want greater certainty, EMA has been working with electricity retailers and gencos since January 2022 to offer longer-term fixed price plans of up to three years," Mr Gan added.

With the global energy crisis exacerbated by Russia's invasion of Ukraine, EMA has extended these measures until March 31 next year.

While the authorities will monitor the situation to see if further measures are needed, Mr Gan said firms should become more energy-efficient to manage costs.

They can monitor their half-hourly electricity usage on the SP Utilities portal or Open Electricity Market e-services portal to manage and reduce consumption, Mr Gan said, or tap various support measures to enhance efficiency.

These include the recently announced Energy Efficiency Grant for the food manufacturing, food services and retail sectors; the National Environment Agency's Energy Efficiency Fund; the Building and Construction Authority's Green Mark Incentive Scheme; and EnterpriseSG's Enterprise Sustainability Programme.

"Businesses which need financing support can also tap EnterpriseSG's programmes such as the Enterprise Financing Scheme and the Temporary Bridging Loan.

The Small Business Recovery Grant will also help eligible firms in sectors most badly affected by Covid-19 cope with overall higher costs of doing business," Mr Gan said.