How Singapore Businesses can Slash Costs through the Open Electricity Market
Singapore’s retail electricity market has undergone a major change with the introduction of the Open Electricity Market (OEM) in late 2018. This creates more competition with better prices and promotions for both business and residential consumers of electricity. So, how can businesses operating in Singapore reduce their monthly operating costs?
Firstly, what is the OEM? How does it enable me to reduce my monthly electricity bills?
The OEM is an initiative started by the Energy Market Authority (EMA) to liberalise the local electricity market with the aim of providing competitive pricing and offers that can benefit electricity consumers in Singapore.
Essentially, it means that the consumers who until now bought their electricity from SP Group, now have the liberty to choose who they want to buy their electricity from. Specifically, 13 retailers are competing in the electricity market to offer electricity at cheaper rates on top of other attractive promotions (e.g. rebates, referral discounts), thus providing an avenue to reduce a business’ electricity cost.
What price plans are there for my business to choose from?
As of now, two kinds of standard price plans are being offered.
1. Fixed Price Plan: This plan guarantees a fixed price for businesses throughout their contract period with an electricity retailer, irrespective of whether there are changes to the quarterly-revised tariff. It is suitable for consumers who prefer stability and consistency in their month bills throughout a time period.
2. Discount-Off-the-Regulated-Tariff Plan: This plan guarantees that businesses are always charged below the existing regulated tariffs by paying at a discounted rate. Discount rates changes with different retailers and contract durations.
In addition to this, other non-standard plans are also available based on an individual retailer’s offering.
My business is ready. What do I do next?
Most businesses in Singapore can already benefit from the OEM as it has opened up to most areas. For others (i.e. those with postal codes beginning with the numbers 01 – 33), they will be introduced to the OEM by May 2019.
To pick the right plan, take note of your company’s average electricity consumption in kWh over a few months. Using that figure, calculate the expected monthly electricity bill based on the quarter’s tariff. For Q2 of 2019 (April to June), the tariff stands at 22.79 cents/kWh (before 7% GST). Lastly, compare your expected cost against the different plans available on the OEM website’s comparison tool.
Assuming the tariff of Q2 2019, a company which consumes 1,500 kWh of electricity every month is expected to pay $365.78 if they do not switch to another retailer. However, if they opt for a ‘Discount off the Regulated Tariff’ plan from any of the 13 retailers, they can expect to pay between $281.70 and $310.97 on their monthly electricity bills.
For example, if a business opts for Best Electricity Supply’s ‘BEST Business Saver (24 months)’ plan which offers 18% off the regulated tariff for a 24-month period, they will pay an estimated monthly bill of $300.00.
Alternatively, if a business chooses Geneco’s ‘Biz Easy Flexi 12’ plan which offers 21% off the regulated tariff for a 12-month period they will pay an estimated monthly bill of $300.00.
With so many plan to choose from, learn more about the Open Electricity Market in Singapore through one of the market’s leading retailer before making the right decision for your business.