Singapore opened the Open Electricity Market (OEM) in 2018. OEM gives households the freedom to choose their retail electricity provider.
Switching is optional, but if you want to find out whether you’ll save more if you go to another provider, start by shopping around and comparing offers from various retailers.
If you’ve been with SP Group for a while, that means you’re paying the tariff rate. The tariff rate is computed based on imported fuel and non-fuel costs. This rate is adjusted quarterly.
Whatever the reason you’re thinking of switching, it helps to know what residential and business retail electricity providers are and how they work. Read on to learn more.
Electricity distribution in Singapore
Electricity in Singapore goes through different layers before reaching your household.
First, power plants produce electricity. Power generation companies bid for contracts so they can buy electricity in bulk from the wholesale electricity market and then retail them to households.
Regardless of which retailer you choose, the electricity is delivered to your home through Singapore’s national power grid, which is operated by the SP Group.
To regulate prices and protect consumers, electricity rates from the SP group are based on the tariff set by the Energy Market Authority (EMA). The tariff consists of fuel and non-fuel costs.
- Fuel costs. Singapore relies heavily on imported fossil fuels, making the prices vulnerable to global market conditions. The cost of imported fuel is calculated based on its daily average price in the first two and a half months of the previous quarter. The tariff for October to December, for instance, is computed based on the average daily fuel cost from July and August.
- Non-fuel costs. This tariff component includes the cost of generating and distributing electricity to households. For example, the power generation costs, which cover the cost of running the power stations, including its maintenance and the network costs, the cost of having the electricity travel through the power grid.
If the prices of imported fuel increase, you can expect the electricity bills to rise as well. Some electricity retailers offer discounts off the tariff rates, a package which you might be interested in.
One advantage of having several electricity retailers is the competitive pricing. If you feel the tariff is getting too high, for example, you won’t have to settle with the same provider. You can look around and find a retailer that you feel is providing better rates and services.
This can be especially helpful if you also need business electricity retailers.
Electricity retailers, themselves, are established companies that have been around for decades. And, naturally, thanks to the competition, each retailer strives to offer a better customer service experience for their clients.
Choosing from the different electricity retailers in Singapore
The amount of potential savings you can earn from switching to another residential or business electricity retailer depends.
Review your previous bills to know how much electricity you’re consuming on average and whether you’ll benefit from certain offerings from retailers. If you want flexibility, look into short-term contracts.
Always check the terms and conditions and contact representatives if you’re unsure about anything.