How Do Private Electricity Providers Help The Singaporean Society?
We do not think much about the world before electricity. We take electricity for granted amid our rapidly urbanising societies. We forget how it underpins every aspect of our daily lives, whether it is to switch on the Internet router, turn the lights on in the office or power up our railways.
Only when rising electricity prices on our monthly bills begin to hurt the pockets do we relook at our relationship with this basic commodity and understand how much we are dependent on it as a society.
Power Supply In Singapore
The national electricity provider, SP Group, has been managing power supply in Singapore for the longest time, a requirement by the government. The electricity tariffs, the rate at which electricity is sold by the national provider, are regulated by the Energy Market Authority (EMA). The tariffs are set to cover both fuel costs (production of energy from natural gas) as well as non-fuel costs (distribution and supply of energy, and maintenance of the power grid). This makes it difficult for the state to introduce cheaper electricity prices because it does not set the tariff and it needs enough funds to generate energy and deliver it across the country.
Rising electricity prices have been one of the daily pressures faced by the population. However, with the complete liberalisation of the energy market in November 2018, licensed electricity providers began supplying electricity across Singapore at far more affordable rates than the national tariffs. How has this benefitted the population?
Cheaper Electricity Bills
Retailers in Singapore’s Open Electricity Market can sell electricity directly to households and businesses at cheaper rates because they focus on purchasing, supplying and, in some cases, producing electricity to customers. The operation and maintenance of the power grid are taken care of by SP Group.
These licensed electricity providers are either independent retailers who purchase energy in bulk from power plants at a wholesale electricity price, or are the commercial arms of existing power generators in Singapore who have joined the open market, like Senoko Energy.
While the market is still regulated by the government, these retailers can, within their capacity, introduce attractive price plans that are either pegged at a fixed rate or offer discounts off the national tariff. This has allowed the local population to enjoy more affordable electricity bills each month.
Electricity plays a critical role in the smooth functioning of society. Being able to pay less for such a basic commodity ensures that households can continue to afford electricity and have access to it every day. The savings from these wallet-friendly rates over time allow them to channel more funds to fulfil other necessities such as health and education. Similarly, enterprises can save up on operational costs and drive more resources to other areas of the business, and create more profitable opportunities for the company and employees.
Greater Ownership Of Energy Consumption
Since the choice is now in the hands of consumers, households and businesses become more aware of their electricity needs, understand their consumption patterns better and can effectively evaluate the available plans before choosing the best option for themselves. This offers greater ownership of electricity consumption and increased responsibility in ensuring that they make concerted efforts to maintain or limit their use of energy.
The open energy market allows each electricity provider in Singapore to introduce affordable plans that match a range of daily consumption habits. At the same time, they listen to consumer feedback about their electricity needs and introduce new plans so that consumers have more opportunities to maximise savings on daily consumption.
Such efforts at the micro and meso levels can deliver an impact on a larger scale, such as the case of climate change. While benefitting from lowered electricity prices, consumers can review consumption behaviour and find better ways to save electricity. Over time, this would reduce the population’s demand for energy from power generators and the subsequent decrease greenhouse gas emissions.
More Innovative Plans With Increased Competition Among Private Retailers
Whether in Singapore or elsewhere in the world, a liberalised market brings about greater competition among players which gives rise to more innovative products. This goes the same for the energy market. Private electricity providers in Singapore can work the competition to their advantage and offer competitive prices and innovative packages for consumers. This drives the enterprising spirit of the sector, with players who will be more determined to harness new technology to provide the best for consumers on the ground.
More consumer-tailored electricity plans with attractive prices mean greater opportunities for consumers to save energy and minimise costs on power supply every day.