Singapore — As energy prices increase globally, Second Minister for Trade and Industry Tan See Leng said in Parliament that consumers in Singapore might see an electricity price hike next year.
During a Parliament session on Monday (Nov 1), Dr Tan responded to a series of parliamentary questions, which he grouped into three categories: energy security, electricity retailers and electricity prices.
Dr Tan highlighted “shocks” on the global energy market following an unexpected surge in demand as countries begin to reopen and ease up on Covid-19 restrictions.
He added that unusual weather had impacted wind and solar power generation in Europe while coal production in countries like China unexpectedly decreased.
There has also been a series of gas production outages around the world, said Dr Tan. Spot gas prices have increased by around five times since March, he added.
“Our market is now being tested by an unprecedented storm in the global energy market,” said Dr Tan, reassuring the public that the country’s electricity supply remains one of the most reliable and competitively priced globally.
“In short, we have sufficient fuel supplies and generation capacity today; however, given the unprecedented scale of this energy crunch, we are leaving nothing to chance,” he said.
He added that authorities are working on preemptive measures to further secure Singapore’s fuel and electricity supply.
The Energy Market Authority (EMA) has been working closely with industry stakeholders to further secure Singapore’s fuel and electricity supply, such as creating standby fuel facilities that power generation companies can draw upon if needed.
Dr Tan noted that most consumers in Singapore have been “somewhat cushioned” so far, with about 99 per cent of households on standard price plans while about 96 per cent of businesses are on a fixed price or discount-of-tariff plans.
The current setup “has worked well in a stable market environment,” said Dr Tan.
However, he added that market conditions today are significantly more volatile than in 2018 when the Open Electricity Market (OEM) was extended to all consumers across Singapore.
“Some market participants did not anticipate and were not sufficiently prepared (of the volatility,” Dr Tan explained.
He mentioned that over the last three weeks, five electricity retailers (iSwitch, Ohm Energy, Best Electricity, UGS, SilverCloud Energy), supplying about nine per cent of all electricity consumers, have announced to leave the market.
“The key for us is to have a fair and robust system to ensure a smooth transition for customers affected by exiting retailers,” said Dr Tan.
“Our commitment to this House is this: We will secure our energy supply. We will help vulnerable consumers weather the storm. And we will continue to make our energy sector even better,” he added. /TISG
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