Open Electricity Market (OEM) Singapore – What Is It & How Does It Work?

Before the Open Electricity Market (OEM) in Singapore launched in November 2018, electricity supply was never something Singaporeans had to give much thought to. Singapore Power (SP Group) was the only electricity retailer around, supplying juice to all households in Singapore.

But that’s old news now. Ever since the official launch of the OEM, there were as many as 20 electricity retailers in 2020 fighting for a slice of the power pie. Now? Only 9 electricity retailers are left.

All households already have the option to switch from SP to another electricity retailer. If you’re too lazy to care, you’ll just continue getting your supply from SP (albeit at the more expensive electricity tariff rate).

But what about the rest of us penny-pinching Singaporeans? Will this affect the electricity prices in Singapore? How do I make the switch?

Let’s address all these questions and more below.

Psst… if you’re completely new to the OEM and electricity scene in Singapore, read our Moneysmart Ultimate Guide to Cheapest Electricity:

• Beginner’s guide to the Open Electricity Market in Singapore
• 5 Most common questions about switching from Singapore Powers (SP) to electricity retailer
• Compare 9 Best Electricity Price Plans in Singapore
• All Green and Solar Electricity in Singapore
• A list of hidden costs to look out for when choosing electricity retailers

Then, watch our video explainer: How Much Will You Save If You Switched From SP Services? 

Singapore Electricity Guide — What is OEM, Electricity Retailers?

Contents

1. What is the Energy Market Authority (EMA)?
2. What is the Open Electricity Market (OEM)?
3. Who are the new electricity retailers?
4. What types of new electricity price plans are there?
5. Will electricity be cheaper or more expensive?
6. What are the benefits of the Open Electricity Market (OEM)?
7. Can I switch from SP Group already?
8. If I switch, will my electricity supply be affected?
9. If I buy wholesale, will it be cheaper?
10. Is the Open Electricity Market (OEM) a good thing?

1. First of all, what is the Energy Market Authority (EMA)?

According to their website, the EMA is a statutory board under the Ministry of Trade and Industry that aims to “ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore”.

They regulate the local electricity industry, helping to ensure that the power supply to your homes are reliable and running. They also set the regulated tariff, which is the long-term cost of producing and delivering electricity in Singapore (because that’s the price SP Group sells it for). They’re basically the ones behind the current OEM initiative to liberalise the electricity market.

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2. Okay, so what is the Open Electricity Market (OEM)?

In 2017, the Electricity Market Authority (EMA) announced the Open Electricity Market (OEM) initiative in effort to encourage competition and innovation in the power industry.

From 1 Nov 2018 to May 2019, the OEM was released in phases to gradually allow all households in Singapore to choose their preferred electricity provider. The rollout has been complete and that means all residences in Singapore can now switch away from SP Group. That said, it is not mandatory (it’s completely up to you!) and there is no deadline for it.

Here’s the timeline of the OEM initiative:

• Oct 2017 – Official OEM announcement
• Apr 2018 – Soft launch for 108,000 households (and 9,500 businesses) in Jurong
• Nov 2018 – Official launch of OEM, starting with zone 1 (postal codes 58 to 78)
• Jan 2019 – Launch for zone 2 (postal codes 53 – 57, 79 – 80, 82 – 83)
• Mar 2019 – Launch for zone 3 (postal codes 34 – 52, 81)
• May 2019 – Final launch, for zone 4 (postal codes 01 – 33)
• Today – OEM fully launched for all households in Singapore

For a bit of background on the electricity market, there are 3 main players in the industry: power generation companies, electricity retailers and you, the consumer.

Power generation companies are power plants that generate electricity. In the wholesale electricity market (National Electricity Market of Singapore), they bid to sell their power to electricity retailers in bulk. Then, electricity retailers compete to sell it to consumers like you and me.

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3. So who are the electricity retailers in Singapore?

As of 2022, there are 9 electricity retailers:

1. Diamond Energy Merchants Pte Ltd
2. Geneco (by Seraya Energy Pte Ltd)
3. Keppel Electric Pte Ltd
4. Pacific Light Energy Pte Ltd
5. Sembcorp Power Pte Ltd
6. Senoko Energy Supply Pte Ltd
7. Sunseap Energy Pte Ltd 
8. Tuas Power Supply Pte Ltd
9. Union Power Pte Ltd 
10. Best Electricity Supply Pte Ltd (exited Singapore)
11. iSwitch Pte Ltd (exited Singapore)
12. Ohm Energy Pte Ltd (exited Singapore)

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4. What types of new electricity price plans are there?

There are 2 standard ways the 9 electricity retailers price their power:

Fixed price plans are like SP Group’s. For a contractual period, you pay a fixed rate for whatever amount of electricity you use. Because of the power price war, you’d expect the electricity retailers’ prices to be lower than the SP’s electricity tariff (electricity price).

Discount off regulated tariff plans are electricity prices that are pegged to the regulated SP tariff. For example, in Q2 2022, Senoko‘s Discount Off Tariff plan gave users 3% off the regulated tariff. In Q2 2022, the SP electricity tariff was $0.2990/kWh. With a 3% discount, that meant Senoko’s discount off tariff plan was charging $0.29003/kWh. That also means you’d always be paying less than SP Group.

Very little right? Discounts used to run up to 20% a few years ago in 2019 when the OEM was in full swing. Today in Q3 2022, there are no discount off tariff electricity plans available.

During the soft launch of the OEM, some electricity retailers also tried “peak & off-peak” type of  packages which offered lower prices during off-peak hours and higher prices during peak hours. Whether or not it averages out and results in cost savings depends entirely on your lifestyle and usage patterns.

However, many retailers have done away with this because it was not as popular as the first 2 pricing mechanics. Other non-standard price plans include flat fee pricing, which charges you a monthly flat fee for a fixed amount of electricity — kind of like a mobile phone data plan. All peak, off-peak, and flat fee electricity plans have been phased out over the years.

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5. Will the cost of electricity be affected? Will my bill be cheaper or more expensive?

Are these new electricity retailers cheaper than SP Group? The short answer is yes.

There is no law or regulation on electricity prices, so retailers can literally sell it to you at any price, but thanks to stiff competition in the market, prices are consistently on par or lower than SP Group’s electricity rates.

SP’s electricity rate = $0.3017/kWh (inclusive of GST)

The EMA changes the electricity tariff every quarter (Jan, Apr, Jul and Oct of every year). For the current quarter of 2022 (1 July to 30 September 2022), the tariff is $0.3017 per kWh, which is an increase of 8.1% from the last quarter.

The tariff is quite volatile and fluctuates quite a bit, meaning it can go up or down. In fact, the electricity rate is currently at its highest since 2014 ($0.2573/kWh before GST), driven by fuel costs and the Ukraine-Russia conflict.

Now, let’s look at the price of electricity if you switch to another electricity retailer.

Most of the electricity fixed price plans will hover near SP’s electricity rates. At the time of writing, the cheapest electricity retailer is Geneco and Senoko at $0.2880/kWh.

Electricity Retailer	Fixed Price Plan	Price (per kWh)
Geneco	Get It Fixed 24 months	$0.2880
Senoko	LifePower 24 months	$0.2880
Pacific Light	Savvy Saver 24 months	$0.2968
Tuas Power	PowerFix 12	$0.2979
Sembcorp Power	Fixed Price Home 12 months	$0.2988
Keppel Electric	Fixed 24 months	$0.2988
Sunseap Energy	Sunseap One 6 months	$0.4173
Union Power	Union Saver 6 months	$0.4815

Assuming you stay in a 4-room flat and use 360 kWh per month, your monthly bill will be $108.61 with SP Group ($0.3017/kWh). If you use Geneco’s Get It Fixed 24 months, you’ll be paying $103.68 per month instead. That’s $4.93 in savings.

Fuel costs may potentially continue to increase, so if you’re reading this article you may seriously want to consider switching to one of these lower cost electricity plans soon and lock yourself in for a year or two.

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6. What are some benefits of the Open Electricity Market (OEM)?

Although all the hassle to do research, compare promo codes and compare prices may not make it seem so… the OEM is generally a good thing!

1. More choices and lower prices

Previously, we literally had no choice but to choose SP Group and pay the electricity tariff, which fluctuates every quarter. Even if you found it expensive, you had no choice but to pay it.

But with the OEM, the EMA has opened up the electricity market to competition, pushing local electricity retailers to lower their prices. All the retailers offer packages below the tariff, which means cheaper prices and greater savings for us all.

2. More innovative products

Because competition used to be so stiff in the past few years, electricity retailers were coming up with more innovative products and bundles to attract customers.

For instance, aside from the standard fixed price and discount off tariff plans, some retailers used to even offer peak & off-peak plans, as well as monthly flat rate packages.

Some also bundle their electricity with other products like insurance and give away freebies at roadshows.

3. More awareness on electricity costs in Singapore

For the most part, most Singaporeans didn’t know much about electricity before the OEM. It was just another utility bill we paid for.

Thankfully, a lot of the OEM’s efforts is also focused on educating the public and helping consumers make informed decisions, which is great. You don’t want to kena conned into paying higher prices, right?

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7. Can I switch from SP Group already?

Yes, every household in Singapore is eligible to pick their own electricity retailer. The OEM initiative rolled out in November 2018 and was completed in May 2019:

Launch date	Postal code	Location
1 April 2018	60 to 64	Jurong East, Jurong West, Tuas, Pioneer and Boon Lay
1 Nov 2018	58 to 78	Upper Bukit Timah, Clementi Park, Ulu Pandan, Jurong, Hillview, Dairy Farm, Bukit Panjang, Choa Chu Kang, Lim Chu Kang, Tengah, Kranji, Woodgrove, Upper Thomson, Springleaf
1 Jan 2019	53 to 57, 79 to 80 and 82 to 83	Serangoon Garden, Hougang, Punggol, Bishan, Ang Mo Kio, Seletar
1 Mar 2019	34 to 52, 81	Macpherson, Braddell, Geylang, Eunos, Katong, Joo Chiat, Amber Road, Bedok, Upper East Coast, Eastwood, Kew Drive, Loyang, Changi, Tampines, Pasir Ris
1 May 2019	01 to 33	Raffles Place, Cecil, Marina, People’s Park, Anson, Tanjong Pagar, Queenstown, Tiong Bahru, Telok Blangah, Harbourfront, Pasir Panjang, Hong Leong Garden, Clementi New Town, High Street, Beach Road (part), Middle Road, Golden Mile, Little India, Orchard, Cairnhill, River Valley, Ardmore, Bukit Timah, Holland Road, Watten Estate, Novena, Thomson, Balestier, Toa Payoh, Serangoon

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8. If I switch electricity retailers, will my electricity supply be affected or disrupted?

Don’t worry, it won’t.

Not that your power supply will never get disrupted, but if it does, it won’t be because of the electricity retailer you choose.

This is because SP Group still owns and maintains the infrastructure, and is responsible for delivering power islandwide – no change.

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9. What if I buy electricity wholesale? Will it be cheaper?

Technically, you don’t need to be a retailer to buy electricity from the wholesale market. Individuals like you can too. But most people don’t because you’ll be paying the fluctuating half-hourly prices, which means how much you pay depends on when you use (and thus, buy) the power.

This is tricky because even if you’re super eng and want to go study the trends macam stock market, you can’t. When you opt for wholesale prices with SP, there is a 10-day lag when it comes to your report. It sounds ridiculous, but if you think about it, it’s reasonable – 48 different prices per day is a lot of data to collate and deliver to thousands of households.

So as an average Joe just looking to get your new home powered up, you don’t really need to be too fussed with the wholesale electricity market. Choose the path of least resistance… Which is through a licensed electricity retailer participating in the OEM.

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10. So all in all, is the Open Electricity Market (OEM) a good thing?

Competition is always good, so yes – at least for now.

Initially, industry members expected Singaporeans to be on the conservative side, forecasting a mere 5% of switches during the soft launch. According to this ST report in February 2019, the take-up rate is as high as 40% (in Jurong, the pioneer batch).

The published prices of the new retailers are already markedly lower than the regulated tariffs. And as more zones become eligible to make the switch, the electricity retailers are likely to remain aggressive, pushing out more promotions and rebates to attract new customers.

That means more discounts for us, which is always welcome news!

But the big question is… For how long?

Discounts are great, but as we learnt from Uber… Sometimes, it’s not sustainable.

In my opinion, it’s only a matter of time before the bubble bursts. Take Red Dot Power as an example – the company was part of the OEM’s soft launch, but exited the market shortly after due to “financial challenges”.

Red Dot was later joined by Best Electricity Supply Pte Ltd, iSwitch Pte Ltd, and Ohm Energy Pte Ltd – all who left the Singaporean electricity market due to rising costs.

It’s hard to say what SP and the retailers’ next move will be because we’re obviously not privy to their board meetings, but my guess that the only way to come out tops in this power play is to find a way to genuinely value-add the service instead of undercutting for the sake of it. (… That, or have super deep coffers.)

Some retailers (like Geneco) get their power from their parent companies that are power generators; others are purely retailers, and have to purchase electricity from the wholesale electricity market. But whichever they are, they still need to go through SP, who runs the power grid (basically delivers the power to consumers).

And since all retailers need to pay SP to use the infrastructure, SP Group remains the biggest bully in the sandbox.

What do you think of the electricity retailers and the Open Electricity Market (OEM)? Tell us your thoughts in the comments below!