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Jurong first to enjoy options for retail power supply

Retailers ready to battle for household market; many have already beefed up back-end IT systems to deal with more volumes

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"Why Jurong? Firstly, when you go about a programme like this, it is important to take a calibrated approach. And, Jurong, in terms of size, it's about 100,000 accounts, so that's a reasonable size to be able to implement and learn from the implementation. The profile of Jurong residents is quite similar to most of Singapore - that again is beneficial from the point of view of learning." - Minister for Trade and Industry (Industry) S Iswaran

Singapore

COME April next year, households and businesses in Jurong will be the first in Singapore to have the option of choosing their electricity retailers in the soft launch of a fully liberalised power market.

Electricity retailers say they are ready to battle for the household market, which would currently enjoy savings of 15-25 per cent in switching from the regulated tariff to the wholesale electricity market; many have already beefed up their back-end IT systems to deal with increased volumes, among other preparations.

Some 108,000 households and 9,500 businesses in Jurong with postal codes starting from 60-64 will be able to choose between switching to an electricity retailer or continue buying from SP Group at the regulated tariff, the Energy Market Authority (EMA) said on Friday. These pertain to Jurong East, Jurong West, Pioneer, Boon Lay and Tuas.

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The agency added that the consumers involved in the soft launch will be notified in the first quarter of next year.

This comes ahead of the full liberalisation of the market which will continue to take place in the second half of next year. Some 1.3 million accounts, mainly households, will be involved when that occurs.

The soft launch of the Open Electricity Market will allow EMA, grid operator SP Group and electricity retailers to gather feedback and fine-tune processes where necessary, before it is rolled out to the rest of the island.

Minister for Trade and Industry (Industry) S Iswaran told reporters at a briefing: "Why Jurong? Firstly, when you go about a programme like this, it is important to take a calibrated approach.

"And Jurong, in terms of size, it's about 100,000 accounts, so that's a reasonable size to be able to implement and learn from the implementation. The profile of Jurong residents is quite similar to most of Singapore - that again is beneficial from the point of view of learning."

He emphasised that the liberalisation will give consumers more choice and therefore more benefits, and that EMA is committed to making the process of switching an easy one.

EMA is also developing an online information platform, to be administered by SP Group, to allow consumers to compare the standard price plans by different retailers; a simpler version of this will be launched in April as well.

Said EMA chief executive Ng Wai Choong: "Our main objective of introducing the Open Electricity Market is to promote greater competition in the electricity market. With competition, consumers stand to benefit from competitive pricing, enhanced service standards and innovative packages from electricity retailers."

The reliability of electricity supply will not be affected when consumers switch to other retailers, he added, as they will continue to receive electricity supply through the grid operated by SP Group.

The liberalisation of Singapore's electricity market has been happening gradually since 2001. Steadily more consumers have been given the freedom to switch from buying electricity at the regulated tariff from SP Group to buying from electricity retailers which offer packages at different price plans.

At the start, the largest consumers, that is, industrial users, were given contestability status, or this freedom to choose. Currently, businesses with an average monthly electricity consumption of at least 2 megawatt-hour (MWh) (equivalent to a monthly electricity bill of at least S$400) have this option.

Attracted by the potential for change, independent retailers - or those without any power generation arm - have entered the once-staid market in droves.

The number of electricity retailers has jumped from only seven in 2013 to 26 currently. Out of this number, 18 are active; the rest are seen to be still preparing for the Open Electricity Market next year.

iSwitch, an independent retailer, said that it will be offering simple but structured plans to reward consumers if they use power during off-peak hours.

It has also formed strategic partnerships with software companies to ensure that the sign-up process is smooth, reliable and cheap.

Andrew Koscharsky, its general manager for wholesale and trading, added that one important aspect is for the government to educate households that their supply of electricity will not be affected if they switch away from SP Group.

Power generation firm Tuas Power lauded the move to have the soft launch. But with the date of the full Open Electricity Market still unknown, general manager Michael Wong said that it is unclear if unfavourable results from the soft launch could push it back.

"In spite of that we assume the full launch will still come in the second half of next year," he noted, adding that the firm has invested in the respective areas in people and partnerships.

 

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