The Energy Market Authority continually seeks to develop the electricity market for the benefit of consumers. These initiatives will enable both commercial and residential electricity consumers to enjoy more competitive electricity prices, increased retail options, and greater price transparency.
An example of such market development initiatives is the Electricity Futures Market, which was launched last April. This has enabled independent retailers with new business models to enter the electricity market offering consumers greater retail choices and price competition. For example, Town Councils have seen their electricity bills come down in new tenders. (Please see Question 2 for more details.) Another example is the progressive opening up of the electricity retail market, which will culminate in Full Retail Competition in the second half of 2018. All electricity consumers will be able to enjoy choosing from a wide range of electricity retail packages at competitive prices to meet their energy needs.
The MDSC will support a range of market development initiatives, such as developing the Electricity Futures Market and implementing Full Retail Competition in the second half of 2018. The initiatives will benefit consumers by bringing about more competitive prices and retail choices.
More competitive pricing
An example is the cost savings that Town Councils have enjoyed because of the emergence of independent electricity retailers (i.e. retailers not linked to generation companies) that the Electricity Futures Market has facilitated. In the Sep 2015 tender results (shown below) for the supply of electricity, 10 Town Councils were able to enjoy 22% discount off SP tariff – an additional 7.5% in savings compared to the most competitive quote from an existing generation company and retailer. This amounts to about $2.1 million savings a year, which will eventually benefit electricity consumers.
Greater retail choices
Since April 2015, four independent retailers with new business models have entered the electricity market offering consumers greater retail choices:
For example, Apple awarded an electricity retail contract (33 MWp) to Sunseap for the premises of Apple to be fully powered by solar energy. Sunseap's business model entails procuring solar energy for Apple from the solar panels installed in other consumers’ premises, while using the Electricity Futures Market to hedge its pricing risk. This is possible because independent retailers can now leverage on the Electricity Futures Market to hedge any pricing risks for their consumers.