Nationwide Rollout of Open Electricity Market Progressing Well

08 Feb 2019

The nationwide launch of the Open Electricity Market (OEM) is progressing well. More than 700,000 consumers in zones 1 and 2 can now choose from more electricity retailers and enjoy competitive pricing and innovative offers at the same reliable electricity supply.

More Household Consumers Choosing to Switch

2          Based on the switch rates in the first month of each zone, Zone 2 has seen higher early switch rates than for Zone 1 and the soft launch in Jurong. The table below shows the overall switch rates of household consumers as of end-Jan 2019. These switch rates are higher than the single-digit first-year switch rates seen in other countries such as Japan, UK, Australia and New Zealand.

Area	Jurong soft launch (since Apr 2018)	Zone 1 (since 1 Nov 2018)	Zone 2 (since 1 Jan 2019)
Switch rate (as of end-Jan 2019)	About 40%	About 25%	About 18%

3          On the positive response to OEM, Mr Ngiam Shih Chun, Chief Executive of the EMA said, “The Open Electricity Market is about giving consumers choice. While some consumers have chosen to switch, others have decided to continue buying from SP Group. Some are also taking a wait-and-see approach as there is no deadline to switching. Consumers are encouraged to take time to learn more about the options and price plans available before deciding whether to switch.”

Savings Range Between 20-30%

4          Consumers who have switched pay an electricity rate of about 20% to 30% lower than the regulated tariff. Retailers are offering rates ranging from 17.66 cents/kWh to 23.01 cents/kWh for their Fixed Price Plans and discounts ranging from 14.5% to 25% for their Discount Off the Regulated Tariff Plans[1].

5          The majority of households who switched signed up for 24-month Standard Price Plans, which offer all-inclusive rates[2]. Between the two Standard Price Plans, the Fixed Price Plan has seen a higher take-up than the Discount Off the Regulated Tariff Plan.

High Awareness of OEM

6          There is a high level of awareness of the OEM, with surveys commissioned by EMA[3] showing that:

 

             a. 96% of residents have heard of this initiative.  

            b. Three out of four residents have taken some action after hearing about the OEM. This includes seeking information online and discussing the OEM with friends and families. 

            c.  Half of the residents indicated that they are open to switching to a retailer.

New Innovative Offerings

7          Survey findings also showed that while consumers hope to see lower electricity bills, they also want more flexible pricing plans that cater to their needs. Some retailers have partnered with third-parties such as banks, telecommunications and home insurance companies to offer value-added services and products. In addition, the majority of retailers have gone digital and sign-ups can be done online.

Continued Engagement & Education Efforts

8          EMA and retailers have been engaging and educating consumers to help them better understand their options. To date, EMA has conducted close to 10 community events, including a roadshow with retailers in December 2018. Retailers have also held roadshows at various community spaces, such as shopping malls and heartland areas.