Since 2001, EMA has progressively opened the retail electricity market to competition to allow non-residential consumers the option of buying electricity from a retailer or from the wholesale electricity market. Those who exercise this choice are termed as contestable consumers.
Non-residential consumers who have chosen to remain non-contestable will continue to buy electricity from SP Group, the market support services company regulated by the EMA.
The low-tension tariff, applicable to most non-residential or business consumers, comprises two key components – fuel cost and non-fuel cost.
The fuel cost, or cost of imported natural gas, is tied to oil prices by commercial contracts, which can change depending on global market conditions. The non-fuel cost is the cost of generating and delivering electricity to homes and businesses.
Find out more about past electrical tariffs from SP Group's website
Breakdown of Electricity Tariff
This component of the tariff is calculated using the average of daily natural gas prices in the first two and-a-half month period in the preceding quarter. For example, the average natural gas price between April and June is used to set the tariff for July to September.
This helps smoothen out any large swings in the oil markets. For consumers, this means electricity tariffs that are reflective of prevailing market conditions.
Around 95% of Singapore's electricity is generated from imported natural gas, the prices of natural gas are indexed to oil prices. This is the market practice in Asia for natural gas contracts.
This part of the tariff reflects the cost of generating and delivering electricity to homes, offices and facilities. It includes:
- Power Generation Cost
This covers mainly the costs of operating the power stations, such as the manpower and maintenance costs, as well as the capital costs of the stations.
- Network Costs
This is to recover the cost of transporting electricity through the power grid.
- Market Support Services (MSS) Fee
This is to recover the costs of billing and meter reading, data management, retail market systems as well as for market development initiatives.
System Operation and Market Administration Fees
These fees are to recover the costs of operating the power system and administering the wholesale electricity market.
Benchmarking Singapore’s Electricity Tariffs
Some claim that Singapore’s electricity prices are one of the highest in the world.
Benchmarking studies regularly commissioned by EMA show that our regulated tariff for households is comparable to that of similar cities around the world. Our tariffs are neither the highest nor the lowest. Singapore adopts the principle of pricing electricity to reflect its true cost to discourage wasteful consumption.
Read more: Are our electricity prices one of the highest in the world?
View the electricity tariff benchmarking statistic
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