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Switching from SP Group to A New Electricity Retailer – 8 Things You Need to Know

sp group electricity retailer

Eugenia Liew

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Before this year, electricity supply was never something anyone had to give much thought to. Need electricity for your new home? Singapore Power (SP Group) lor. They’re the only electricity retailer what, right?

They used to be, but as of yesterday (1 Nov 2018), the Open Electricity Market (OEM) has officially rolled out and now, there are 13 licensed electricity retailers fighting for a slice of the power pie. This comes after a reasonably successful soft launch in April 2018, when several electricity retailers joined the market for 108,000 households and 9,500 businesses in Jurong.

At this point, you probably have a ton of questions: How does this affect the cost of electricity in Singapore? Should I make the switch from SP?

Let’s address all these questions and more below.

 

Singapore Electricity Guide (2018) – SP Group VS New Electricity Retailers

Contents:

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

 

Okay, so what’s this Open Electricity Market (OEM)?

Now, prior to the OEM, the only electricity retailer was SP Group. Consumers didn’t have a choice – if you need electricity, only SP Group can provide it.

However, in 2017, the Electricity Market Authority announced that in effort to encourage competition and innovation, they’re implementing the Open Electricity Market (OEM). Starting 1 November and by May 2019, all households in Singapore should be eligible to choose their preferred electricity provider.

For a bit of background on the electricity market, there are three 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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Who 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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If I switch electricity retailers, will my electricity supply be affected?

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 owns and maintains the infrastructure, and is responsible for delivering power islandwide.

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

Let’s take a quick look at SP’s current price compared to the fixed rate prices of the new retailers:

Current regulated electricity tariff (price of electricity) = $0.2582 per kWh

Average price of electricity for new retailers (2 years contract, fixed price) = $0.1620 to $0.1880 per kWh

Are these new electricity retailers cheaper than SP Group? The short answer is yes, at least for the fixed price plans and those pegged to the regulated tariff. There are 2 standard ways retailers price their power:

Fixed price plans are like SP Group’s. You pay a fixed rate for whatever amount of power you use. At the moment, because of the power price war, all the new retailers’ prices are lower than the regulated tariff (that SP is offering).

Discounted off the regulated tariff plans are prices that are pegged to the regulated tariff. For example, the retailer may offer you 20% off the regulated tariff. That means that you’ll always be paying less than SP. If right now the tariff is $0.2582 per kWh, you will pay $0.2066 per kWh. But if the tariff drops to $0.23 in the next quarter, you pay $0.184 per kWh.

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

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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 Open Electricity Market.

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Can I switch from SP Group already?

Not sure when it’ll be your turn? Here’s the latest timeline (updated 2 Nov 2018):

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

Note: Locations indicated are based on URA’s list of postal districts and are meant as a guide only. To check when an exact address will be eligible, please look at the postal codes (taken from OEM).

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So who are the new electricity retailers?

As of 1 Nov 2018, 13 electricity retailers have joined the fray. According to EMA’s listing, however, there are 32 licensed retailers in total (the rest just probably haven’t joined the market yet).

Also, there is no law or regulation on electricity prices, so retailers can literally sell it to you at any price. However, as mentioned, EMA does stipulate a regulated tariff, which is offered by SP.

  1. Best Electricity Supply Pte Ltd
  2. Diamond Energy Merchants Pte Ltd
  3. ES Power (by Environmental Solutions Asia Pte Ltd) 
  4. Geneco (by Seraya Energy Pte Ltd)
  5. iSwitch Pte Ltd
  6. Keppel Electric Pte Ltd
  7. Ohm Energy Pte Ltd
  8. PacificLight Energy Pte Ltd
  9. Sembcorp Power Pte Ltd
  10. Senoko Energy Supply Pte Ltd
  11. Sunseap Energy Pte Ltd 
  12. Tuas Power Supply Pte Ltd
  13. Union Power Pte Ltd 

For the latest update on new retailers, please check the OEM’s official list of electricity retailers.

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So all in all, is the Open Electricity Market a good thing?

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

Industry members expect most Singaporeans to be on the conservative side, and they actually only forecasted about 5% of the soft launch households to make the switch. Because of this, the new electricity retailers will be working harder and more aggressively to win our business.

That’s the fancy way of saying “More discounts!!!!!!”. The published prices of the 13 new retailers are already markedly lower than the regulated tariffs. According to CNA, an estimated 30% of residents from the first Jurong launch have already made the switch from SP Group.

But the big question is… For how long?

In my opinion, it’s only a matter of time before the bubble bursts. SP Group is still the biggest player in the market, and from what I understand, retailers are charged a fee for using the infrastructure.

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).

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.

Are you planning make the switch from SP Group? Tell us your thoughts in the comments below!

 

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Eugenia Liew

I’m a 90s millennial who’s starting to realise that #adulting is more expensive than it seems on Instagram. When I’m not writing for MoneySmart, I’m usually playing with drain-dwelling stray cats or shopping at Sephora.