02 Mar, 2018 7:38 PM / by Quek Leng Chuang
There is 3 traditional bundles in the electrical power industry- Generation, Transmission & Distribution, and Retail. The power sector has always been a nationalised one, and remains so in most parts of the free world. However many states and countries in the USA, EU, Australia and NZ have liberalised the power sector to to allow in efficiencies that ultimately benefits electricity consumers in the form as lower tariffs.
In 2001, the Energy Market Authority (EMA) was formed, and on that same year the EMA allowed electricity consumers with demand above 2 Megawatts (MW) to purchase power from any retailer. These early retailers were all invariably sister companies of the power generators, and are commonly referred to as Gen-tailers.
This threshold of 2MW, was termed to be “contestable”, which meant that that customers in that category could buy electricity from the retailer of their choice. In 2003, all High Tension customers was deemed “contestable”, and in 2006 all business consumers with a monthly demand above 10,000 KWh per month were eligible to be contestable. From 2008 onwards, Temasek Inc allowed the sale of the 3 major power generating plants in Singapore. This marked the first big Milestone in full liberalisation of the electrical power industry. The assets at Tuas went to Tuas Power Generation (Huaneng Power International, Inc.), those at Senoko went to Senoko Energy Pte Ltd (is a Japanese-French Consortium), while those at Seraya went to YTL Powerseraya (YTL Power International Berhad).
In 2014, contestability was adjusted twice- first to 8,000 KWh per month, then dropped to 4,000 KWh per month. In 2015 it was further reduced to 2,000 KWh per month (or approximately a monthly bill of $400). In 2015 EMA also started to licence retail license to Independent retailers that don’t produce power themselves.
The market awaits now for end 2018, when all residential and business accounts will be allowed to purchase power from any retailer of their choosing. The descriptive term used when this happens, is the Open Electricity Market (OEM). The advent of the OEM is expected to provide the consumer much wider choice of retail options. How do we as consumers select the best retail option for yourself ? In order to make the best choice, we need to understand the physical and electrical organisation of the Electricity Market of Singapore (NEMS).
There are 3 main “bundles” in the NEMS. The first bundle is power generation, the second transmission & distribution of power, and third retail. While the physical despatch of power is directly from power generators through a transmission & distribution system to your business or home. The supporting commercial transaction in 2 tranches to sup consumer businesses and homes. The First tranche is when Power Generating Companies sell the power they produced to a SGX owned electricity exchange called EMC – Energy Market Company. The Second tranche is when retailers (including Gen-tailers) purchases almost simultaneously this same power from EMC to then retail or re-sell to business or homes.
“Independent retailers are not encumbered with the trappings, prejudices, and biases of a Power Generating plant…… ”
Because all retailers purchase power at the same terms, and at the same costs and from the same ‘source’ (EMC), gen-tailers do not have any inherent advantages over independent retailers. Rather, independent retailers are not encumbered with the trappings, prejudices and biases of Generating plant, and tend to be more focused on delivery a better retail product & services, and experience for the customer.
Having understood that all electricity comes from the same source, and that the quality of electricity is not affected by the retailer, we as consumers need to see electricity as more than energy that powers our lives. We need to seek maximum added value from our retailers, and value can be derived from e.g. insights and information of our consumption habits, ease of transaction from sign up to bill payment, environmental attributes such as Carbon Offsets or Renewable Certificates, Co-branded services and products etc. With 27 Retailers to choose from, it will be a buyers market, nonetheless we should choose wisely.
If you’ve decided to make the right choice of living green with ES Power, head over here to make the switch today, or contact us at 1800-888-1010 or firstname.lastname@example.org to learn more.
Written by Quek Leng Chuang
LengChuang is a chemical engineer and an expert in carbonomics. He is the founder and owner of Environmental Solutions (Asia) Pte Ltd.