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Media Releases
31 Jul 2023
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- The Energy Market Authority (EMA) will implement an enhanced regulatory framework for electricity retailers. This initiative is one of the guardrails to strengthen the existing competitive market structure and ensure that Singapore is well positioned to navigate the energy transition.
- The electricity retail market has been progressively liberalised since 2001 to provide consumers with a wider range of retail price plans. With the nationwide rollout of the Open Electricity Market (OEM) in 2018, all consumers including households and small businesses have the option of buying electricity from retailers. Consumers benefitted from greater choice, competitive electricity pricing and innovative offers, with no change to the reliability of their electricity supply. However, the onset of the global energy crunch in 4Q 2021 resulted in high and volatile wholesale electricity prices in the Singapore Wholesale Electricity Market, which spilled over to the electricity retail market. As a result, independent retailers were affected, some of whom exited the market or prematurely terminated consumer contracts.
- While the entry and exit of retailers are features of an open and competitive retail market, the number of exits indicated that some retailers were not sufficiently prepared against market volatilities. In October 2022, the Ministry of Trade and Industry announced that EMA would introduce guardrails to strengthen the existing competitive market structure. This includes enhancing the regulatory requirements on electricity retailers to strengthen consumer protection and ensure that they are sufficiently resilient against market volatility.
- EMA conducted a public consultation exercise from February to March 2023 on the proposed enhancements to the regulatory framework for electricity retailers. The retailers were generally supportive of the proposed enhancements. EMA has considered the retailers’ feedback and will be implementing the following enhancements:
- Have a Tangible Net Worth of at least SGD$1 million at the time of licence application or renewal, to ensure that they are credible and have sufficient financial standing;
- Seek EMA’s approval to appoint key appointment holders, to ensure that the individuals leading and managing the companies are fit and proper;
- Hedge at least 80% of their retail contract position and provide a performance bond for any unhedged position, to increase resilience against market volatility; and
- Protect consumers against premature termination of retail contracts.
- These enhancements will be progressively implemented from August 2023.
- EMA’s Final Determination Paper on the enhanced regulatory regime, which outlines the feedback received and EMA’s responses, is available on EMA’s website.
- Please refer to Annex A for an overview of the key changes introduced to ensure a dynamic yet resilient power market.
EMA will implement an enhanced regulatory framework for electricity retailers.