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More businesses to enjoy power supplier choices

From July 1, those consuming at least 2MW an hour can buy from electricity retailers; government pumping S$45m to build power sector

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MORE businesses will be able to buy power directly from electricity retailers or the wholesale electricity market from next year, as Singapore gradually liberalises its electricity market.

Singapore

MORE businesses will be able to buy power directly from electricity retailers or the wholesale electricity market from next year, as Singapore gradually liberalises its electricity market.

From July 1 next year, the contestability threshold - or the point at which a consumer can buy from electricity retailers rather than through SP Services at a regulated tariff - will be lowered to 2MW an hour.

This will add 10,000 commercial or industrial consumers to the 23,000 who are already eligible, said Second Minister for Home Affairs and Trade and Industry S Iswaran. Together, they represent about 80 per cent of total electricity demand in Singapore.

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Switching to the contestable market can bring about cost savings of about 12 per cent, according to the Energy Market Authority (EMA).

The contestability threshold has been progressively lowered as Singapore seeks to fully liberalise the electricity market. It went from 10MWh to 8MWh on April 1 this year, and to 4MWh on Oct 1.

But to reach full retail contestability to include households "will probably take several years", said Mr Iswaran. "We are taking a systematic approach to this to ensure that the backend and overall system can support this expansion... Once we go from several thousands of consumers to millions of consumers, it's a different kind of scale."

The government is also pumping in S$45 million to build the power sector here.

Some S$25 million will go towards developing energy storage technologies at the grid-level to encourage the use of solar power in Singapore. The know-how in building large cost-effective systems from the Energy Storage Programme can be exported too, said Mr Iswaran.

Another S$20 million will be used to set up a Energy Training Fund to develop Singaporean workers in the power sector. This could include professional development courses offered by a new training centre, the Singapore Institute of Power and Gas (SIPG).

The centre, set up by Singapore Power with the support of other utilities, will start offering courses next year. These will be based on the needs of the industry; power generation is an immediate priority, while the gas and LNG sectors will also be considered, said Singapore Power.

An emphasis of SIPG is to retain and transfer the expertise in the industry to the next generation, given an ageing workforce, said Quek Poh Huat, senior adviser to Singapore Power. SIPG could also eventually develop into a regional training centre, he added.

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