At least 200 MW of temporary electricity contracts still available, scheme extended to May: EMA

CONSUMERS without a retail plan are encouraged to consider contracts under the Temporary Electricity Contracting Support Scheme (TRECS) for greater certainty in a volatile electricity market. At least 200 MW of the contracts are still available, and the scheme has also been extended for March, April and May, said Second Minister for Trade and Industry Tan See Leng.

For the month of February, the initial offering of TRECS was also fully subscribed. In response to requests for more of such contracts, the Energy Market Authority (EMA) worked with generation companies (gencos) and electricity retailers to offer about 645 megawatt (MW) of TRECS and other plans with significant fixed price components.

The contracting window for March will open on Feb 15, EMA said in a press statement on Monday (Feb 14).

Tan was responding to several Parliament questions on Monday on the take-up rate for TRECS and updates on the scheme, as well as the effect of the exit of various electricity retailers last year on the electricity bills of small and medium enterprises (SMEs), and support available to these businesses.

Between October and December last year, Tan noted that 6 electricity retailers exited the market and another 2 retailers prematurely terminated some of their customers' contracts. As a result, he estimated that about 9 per cent of all electricity consumer accounts were affected.

All affected households, and businesses with an average monthly consumption of less than 4 megawatts hours (MWh) can switch to Singapore Power's (SP) regulated tariff at any time, while some businesses consuming 4 MWh or more have managed to secure plans with other retailers.

However, about 11,000 business consumer accounts - or about 1 per cent of consumers - have to buy electricity directly from the Singapore Wholesale Electricity Market (SWEM) and are consequently exposed to more volatile electricity prices.

To help these businesses weather the storm, EMA has worked with gencos and electricity retailers to reduce the volatility and lower the cost of buying electricity through TRECS, additional monthly contracts offered by gencos, and on the wholesale market for businesses.

Tan cited the example of Sembcorp Power offering 1-month fixed price plans at preferred rates to consumers with average monthly consumption between 4 and 8 MWh.

On the issue of electricity prices in Singapore, Tan said Singapore imports its energy and cannot be fully insulated from developments in the global energy market.

"High fuel prices feed into our electricity bills, to reflect the higher costs of electricity production," he said.

Tan noted that Singapore had been "enjoying artificially low electricity prices" for several years due to an overinvestment in capacity and fuel by the generation companies.

"This was below the cost of generating electricity and thus, not sustainable. An electricity price correction was inevitable, and the current global energy crunch has precipitated and exacerbated this correction," said Tan.

He added that the EMA will also continue to monitor market developments, including heightened geopolitical tensions and their potential impact on global energy markets, and put in place the necessary measures to secure Singapore's energy supply, enhance stability and ensure orderly functioning of the market.

Tan also urged consumers to use energy prudently, and adopt energy conservation as a way of life. "We will also learn from this episode to see how we can strengthen our electricity market," he added.

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