Numerous countries now have a liberalised energy market including countries such as Japan, Italy and recently, Singapore. Singapore’s approach to a freer market is headed by the Energy Market Authority through the Open Electricity Market (OEM).
The OEM was initiated to promote competitive pricing and new offers from electricity retailers for the benefit of consumers. As of writing, there are 13 retailers in the market actively promoting their services and plans.
By May 2019, the OEM’s gradual rollout will culminate with all geographical areas in Singapore being able to engage with the initiative.
The OEM’s Significance to Consumers
Households and businesses will finally now have the choice to select an electricity retailer of their preference, instead of purchasing electricity from SP Group at a regulated tariff.
With the OEM, two choices are open to consumers. Firstly, they may either choose to stick with SP Group, in which this is the default choice if no actions are taken. Secondly, they can engage with an electricity retailer at a price plan which fulfils their needs the best.
There are now 13 electricity retailers in the OEM offering a range of electricity plans, with different rates to catering to differing consumer profiles.
What do Consumers Stand to Gain?
The United Kingdom (UK) noticed a great drop in its energy prices after its electricity market was liberalised 20 years back.
Such notable benefits were identified in Singapore’s OEM too. When the OEM had a trial run in Jurong, homeowners and small business who switched saw themselves receiving monthly electricity bills which was much lower than they were used to. Consumers who have benefited, saw between a 20% and 30% cut on their regular energy bills.
Price plans promoted by electricity providers are usually retailed at a more competitively-priced rate than the prevailing regulated tariffs; this may change due to market conditions. Therefore, homeowners and businesses can see a significant drop in their monthly electricity bills if they make the switch out of SP Group.
As this market becomes fully liberalised and starts to hit its stride, there’s likely to be a period of trial and error as consumers shop around to find the best plan for them. In a bid to attract consumers to make the switch, different retailers have employed different tactics including providing discount-based incentives and vouchers, to name a few. Approaches such as these will help locals in terms of cost saving.
Besides lucrative price plans, retailers have offered bundled services as a mean of innovating their products and services. Retailers here have extended partnerships with other companies such as insurance companies and banking entities to offer value-added services.
The introduction of the OEM has certainly proven to be beneficial from a few aspects. With so many plans and retailers to choose from, consumers should explore the different offers in the market before picking one that will serve them best (e.g. based on household electricity consumption habit, billing preferences).
Now that you know what you stand to gain by switching to another retailer, go on further to explore the available offers in the local energy market.