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.
| Tender in Sep 2015 for Supply of Electricity to East Coast,
Holland-Bukit Panjang, Moulmein-Kallang, Nee Soon, Pasir Ris-Punggol, Potong
Pasir, Sembawang, Tanjong Pagar, West Coast and Bishan-Toa Payoh Town
Councils |
| # |
Tenderer |
Discount % to SP Tariff |
Discount (₵/kWh) |
| 1 |
Independent retailer A |
22 |
4.5 (1.5 better than best offer from
incumbent genco) |
| 2 |
Independent retailer B |
18 |
3.7 |
| 3 |
Independent retailer C |
17 |
3.5 |
| 4 |
Existing generation company and retailer D |
14.5 |
3 |
| 5 |
Existing generation company and retailer E |
14.1 |
2.9 |
| 6 |
Existing generation company and retailer F |
13.01 |
2.6 |
| 7 |
Existing generation company and retailer G |
8.5 |
1.7 |
| 8 |
Existing generation company and retailer H |
5 |
1 |
| 9 |
Existing generation company and retailer I |
4.95 |
1 |
| 10 |
Existing generation company and retailer J |
3.2 |
0.7 |
The benefits of more competitive prices are not only confined to electricity consumers who buy from independent retailers. Due to the competition from the entry of more players, existing generation companies and retailers are also offering greater discounts to customers. This is reflected in their more attractive bids in a subsequent Town Council tender in Nov 2015 (shown below). Hence the Electricity Futures Market brings about benefits to consumers across the board, and not just to those who participate directly in the Electricity Futures Market.
| Tender in Nov 2015 for Supply of
Electricity to Ang Mo Kio, Chua Chu Kang, Jurong-Clementi, Marine Parade and
Tampines Town Councils |
| # |
Tenderer |
Discount % to SP Tariff |
Change in discount compared to Sep’15 tender (%) |
Discount (₵/kWh) |
| 1 |
Independent retailer C |
27 |
10 |
5.5 |
| 2 |
Existing generation company and retailer F |
26.01 |
13 |
5.3 |
| 3 |
Independent retailer A |
20.88 |
-1.12 |
4.2 |
| 4 |
Existing generation company and retailer E |
20.2 |
6.1 |
4.1 |
| 5 |
Existing generation company and retailer D |
20.1 |
5.6 |
4.1 |
| 6 |
Existing generation company and retailer H |
19 |
14 |
3.9 |
| 7 |
Independent retailer B |
16.88 |
-1.12 |
3.4 |
| 8 |
Existing generation company and retailer I |
15 |
10.05 |
3.1 |
| 9 |
Existing generation company and retailer G |
8.5 |
0 |
1.7 |
| 10 |
Existing generation company and retailer J |
5.5 |
2.3 |
1.1 |
Greater retail choices
Since April 2015, five independent retailers with new business models have entered the electricity market offering consumers greater retail choices:
- Best Electricity Supply provides competitive electricity retail packages customised to meet the requirements of Small and Medium Enterprises and other consumers, including flexible commercial terms.
- I Switch features competitive electricity retail packages to consumers, and provides hedging options to electricity retailers and generation companies to help them manage their price risk.
- Red Dot Power is a one-stop service provider for the supply of electricity to consumers as well as offering consumers demand side management services to help them better manage their electricity usage.
- Sunseap provides solar leasing, where it takes care of the installation and maintenance costs of solar panels. Building owners then pay Sunseap for electricity generated by the solar system.
- Sun Electric offers solar-generated electricity to consumers without rooftop space to install solar panels. By hedging on the Electricity Futures Market, Sun Electric has been able to pass on cost savings directly to consumers.
Power generation-linked retailers have been innovating to create value for customers as well. Among them is Tuas Power Supply, which provides electricity packages that promote energy conservation (through ways such as minimising energy wastage with advanced lighting solutions) and enhancing energy efficiency for its customers.
In another 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.
