Power to the People: Consumers free to buy electricity from any retailer in Singapore’s open energy market.

Power to the People: Consumers free to buy electricity from any retailer in Singapore’s open energy market.

If there’s one thing you’d probably never expect to shop around for - it’s electricity. Imagine being able to choose who you purchase your power from, the way you’d choose between telcos, or the best deals on designer handbags in Orchard Road. This is what’s happening in Singapore come the second half of 2018 when the energy regulator, Energy Market Authority (EMA), fully liberalises the retail electricity market. That’s sooner than soon, so here are three quick points to help you stay on top of things:

1. What is an open electricity market?

The short story is, energy choice. The long story; the distribution of electricity is no longer limited to a single company. Instead, power-generation companies compete to sell electricity to retailers in a wholesale “auction” market. Retailers then resell electricity to end consumers in a retail market where households and businesses may choose a price plan that suits them best – which is often cheaper than the incumbent supplier, SP Power.

2. Where and when is it happening, and how might consumers respond?

Singapore’s energy sector has been progressively liberalised over the years, to businesses. However, as of April 2018, EMA has decided to open the electricity market to householders and will run a pilot test to Jurong residents, in western Singapore. The plan is to then roll this out to the remaining 1.3 million households and businesses in Singapore in the second half of 2018. Many consumers - households and businesses alike - may be unaware of their power to switch (or not to switch) providers, unsure of what options are available to them, or fearful about the reliability of their energy supply after switching. Key players in the retail market who strengthen their focus on educating consumers stand to gain the confidence of early adopters.

3. What does this mean for Singapore’s economy?

Competition, and competition is always good for the market. Very importantly, it opens up new opportunities that did not exist before, not just for private electricity retailers, but for the industry as a whole. Technology-wise, we might see digital advancements, such as slowly phasing out or replacing manual in-person meter-reading with smart meters for easier monitoring and billing. Collaborations between companies could also result in packages that bundle electricity contracts with other services like broadband, mobile, pay-TV, and credit cards.

The best part: Consumers will have more power over the future.

There’s already talk about the possibility of retailers including solar power in their energy mix and even an offer on peer-to-peer electricity trading option. This empowers consumers to play an active role in optimising their energy consumption and use their dollars to vote for a greener future. It also means lower electricity bills for residents as competition will be fierce. All in all, a very exciting development in the market, one that we hope to see spreading to other countries in the region too.