Electricity tariffs for non-contestable consumers in Singapore are regulated by the EMA. These are updated quarterly to reflect changes in the cost of power generation. Energy cost constitutes the largest component of electricity tariffs, and is calculated using the average of daily NG prices in the first two-and-a-half month period in the preceding quarter.
The four main components of electricity tariffs in Singapore are (i) Energy Costs (paid to the generation companies), (ii) Grid Charges (paid to SP PowerAssets), (iii) Market Support Services Fees (paid to SP Services), and (iv) Market Administration and Power System Operation Fees (paid to the Energy Market Company and the Power System Operator).
In 2016, the annual electricity tariffs declined by 12.9%, from 21.7 cents per kWh in 2015 to 18.9 cents per kWh in 2016. This was mainly due to lower energy costs, which fell by about three cents from 16.3 cents per kWh in 2015 to 13.3 cents per kWh in 2016, as a result of lower gas prices.
The Uniform Singapore Energy Price (USEP) is the half-hourly energy price in the Singapore Wholesale Electricity Market (SWEM). Energy withdrawal from the national grid is settled at the USEP.
Overall, the USEP trended upwards between 2005 and 2012. There was a significant dip in the USEP in the second half of 2008 corresponding to the global economic slowdown. In 2011, the USEP reached a historical high. During this period, there were multiple planned and unplanned gas curtailment by upstream gas suppliers, which resulted in increased utilisation of more expensive fuel oil-fired steam plants and CCGT units running on diesel.
The availability of Liquefied Natural Gas (LNG) imports from 2013 facilitated additional generating capacity coming on-stream. This exerted downward pressure on the USEP. There was a notable spike in USEP in July 2015 due to multiple planned and unplanned maintenance of generation facilities and overlapping transmission constraints. The USEP reached an all-time low in 2016 due to excess generation capacity in the market and declining oil prices.