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  Business Times 30 Oct 07
Competition in the electricity market

Straits Times Forum 23 Oct 07
Liberalising energy mart: Savings, security issues
Letter from Wong Weng Fai

Today Online 22 Oct 07
Clean power, green power
Electricity suppliers should disclose carbon footprints
Letter from Eugene Tay Tse Chuan

Business Times 19 Oct 07
Smart meters may allow households to shop for electricity
Move paves way for different power retailers; SP Services' role to shrink
By Chen Huifen

Straits Times 19 Oct 07
Electricity consumers may get to choose from 6 power retailers
25-month trial for new system with more pricing options
By Arlina Arshad

Today Online 19 Oct 07
Smart meter trials bring homes a step closer to cheaper power?
Lin Yanqin

Channel Newsasia 18 Oct 07
New pilot system may result in cheaper electricity for consumers

SINGAPORE: The way you pay your electricity bills will soon be very much like topping up a pre-paid card.

This is possible under a S$3 million pilot scheme that allows small consumers such as households to switch between electricity retailers.

In fact, consumers will only pay for electricity as and when they need it.

Over the next 2 years, the market regulator will be piloting this new system, known as the Electricity Vending System (EVS), that aims at opening up competition in the market for households and small businesses.

Under the EVS, which has not been tried anywhere else in the world, small consumers are free to choose the various service packages offered by different retailers.

There is no monthly bill. Instead, consumers top up credits on a pre-paid card.

This is unlike the current scheme, in which consumers buy electricity from only one service provider - SP Services - where consumers get a bill each month and pay for how much they have used.

There are about 1.2 million small consumers in Singapore, most of them households. They account for a quarter of the total electricity demand here.

The rest are consumers which use at least 10,000 kilowatts each month. The market for these bigger consumers has been liberalised since 2003.

"Under the new vending system, there should be more choices for consumers - from whom they want to buy electricity, ... to how much energy they want to use a day," explained Khoo Chin Hean, chief executive of Singapore's Energy Market Authority (EMA).

"And if they prefer to stick to the current system of buying electricity from SP Services and paying a monthly bill, that's also an option too."

EMA added that the new system will also reduce the hassle and administrative costs of applying and paying for electricity.

EMA said initial trials will involve technical tests that include placing a Smart Meter outside the home, to track the amount of electricity used at different times of the day. The meter will also tell consumers how much credit they are left with.

EMA will test the Smart Meter on 200 households and small businesses starting next month.

Some consumers are already looking forward to the scheme, saying that it will give them more options. "Just like mobile phone, if they can give me a better price, then I will opt for the better provider," said a consumer.

"Actually it will be more useful for the household, because I think it will make the occupants more aware or more conscious of the use of electricity."

Meanwhile, other consumers are weary of the new system. "I think that it's even more hassle, more trouble," said another consumer. "I have to check how much I have left, in order not to be cut off from the electricity."

This raises another concern - what happens if credit runs out and consumers are caught unaware?

"We are also looking into various payment schemes to enable them to pay and to restore the electricity in a very short time," assured Khoo. "For example, we are also considering the possibility that one can use one's handphone to buy electricity."

EMA added that it will look into a system that will give consumers ample warning before credit runs out.

There are currently five electricity vendors in Singapore - Keppel Electricity, SembCorp Power, Tuas Power, Senoko Energy and PowerSeraya.

No details are immediately available on how these retailers will package their services, but the regulator said that it will ensure competition is not undermined.

"EMA does not regulate the packages that retailers put out, for a simple reason - this is something best left to retailers, and this also creates room for them to innovate," explained Khoo.

However, EMA will keep an eye on the retailers and see that there are no practices in the industry which undermines competition, Khoo added. - CNA/yb

Today Online 19 Oct 07
Smart meter trials bring homes a step closer to cheaper power?
Lin Yanqin

THE idea sounds exciting enough on paper: Let consumers choose which supplier they want to buy their electricity from, and pay for supply upfront via the Internet, ATMs or convenience stores.

But before this Electricity Vending System (EVS) — first announced in March — can come to pass, a two-year pilot study by the Energy Market Authority (EMA) will be carried out to test out the nuts and bolts of a "smart" metering system.

The new set-up would involve an electronic system linked to "smart" meters that show each household how much electricity it has used every 30 minutes and how much is left on its credit.

From next month, 200 households and small businesses in the Marine Crescent/Telok Kurau area will have these "smart" meters installed to see how effectively they work in tracking and transmitting each household's electricity usage.

"The key objective is to ensure that this is more cost efficient than the current process of buying electricity," said EMA chief executive Khoo Chin Hean at the media briefing yesterday.

"We now need to make sure it's safe and reliable, and how to structure and integrate it."

Since 2003, there have been five retailers competing to sell electricity to large consumers, consisting mainly of factories, hotels and other large commercial buildings.

But the high cost of catering to the small consumer market — owing to the need to install infrastructure — has kept retailers from doing the same for the average Singapore household.

If the metering system proves to be cost-efficient and reliable, this will make it viable for retailers to move into the market and compete for the small consumer's dollar.

The increased competition will then pressure companies to keep costs down, the benefits of which will be passed on to consumers, said Mr Khoo.

But at the briefing, questions were raised concerning, for instance, what kind of electricity packages consumers can look forward to, whether each household has to pay to install the meter should the system be implemented, and how much cost savings can be obtained.

The $3-million study will aim to answer such questions.

"One thing we are looking at is whether consumers want this scheme," said Mr Khoo. "If they want to stick to the existing scheme then it's their choice."

The feedback from consumers will come from the final phase of the pilot study, to be carried out in November next year, with 1,000 households trying out the scheme.

As for the future of SP Services as electricity suppliers — the company is currently the sole supplier of electricity to Singapore's 1.2 million small consumers — and the existing pay-as-you-use (Payu) scheme, Mr Khoo said: "All these will be worked out in the coming months."

But will consumers switch to a system that could mean more work for them — as they will have to actually make it a point to log on online or go out to purchase electricity, when they could sit back comfortably receive their electricity and bills at home?

In response, Mr Khoo said: "From what we observe, people are driven by cost, so if someone can offer a lower cost they will go for it.

"We are optimistic about the success [of the system]."

The study is funded by SP Services and The Enterprise Challenge, an initiative under the Prime Minister's Office to fund ideas and schemes that may benefit the public service.

Sidebar:

BEFORE Singapore can implemented the Electricity Vending System (EVS) – the first of its kind in the world – the Energy Market Authority (EMA) will have to test out which "smart" meter would work best for the system's needs.

Smart meters are not a new concept — countries such as Italy, Australia, and China are already using them — but combining it with an electronic system to allow the purchase of electricity through mobile phones and the Internet is.

Such meters will update every half an hour indicating how much electricity has been used and how much of the electricity purchased is left.

This makes it possible, for instance, to create an alert system to remind consumers to buy more electricity.

Households can also keep track of their electricity consumption and possibly reduce their bills through prudent use of electricity.

How efficiently and effectively the metering system works will be crucial to whether EVS will be implemented in Singapore — the high cost of installing such infrastructure has kept electricity retailers from entering the small consumers market.

Until two years ago, the meters could cost $700 to $800 each, but costs have since come down to between $100 and $300 each.

For the 200 households involved in the first phase of the pilot study, installing the meters will require electricity to the household to be disrupted for about 15 minutes, but other than that, there will be no change to their billing arrangements and tariffs.

The EMA will test out a variety of metering systems from Europe and China during this phase of the study to determine which is the most feasible.

Straits Times 19 Oct 07
Electricity consumers may get to choose from 6 power retailers
25-month trial for new system with more pricing options
By Arlina Arshad

JUST as motorists choose their preferred petrol brand when filling up, electricity consumers could also pick their vendors in the future.

Households and small businesses can expect to buy electricity straight from competing private retailers.

Currently, all 1.2 million small-time electricity users pay a flat rate to only one supplier: Singapore Power's SP Services.

Singapore's Energy Market Authority (EMA) is putting in place a scheme that will eventually let consumers choose from any of the five private retailers - Keppel Electric, SembCorp Power, Tuas Power Supply, Senoko Energy Supply, and Seraya Energy - as well as SP Services.

Under this new Electricity Vending System, electricity will be priced at peak and non-peak rates. Households can thus manage their usage better.

'They may want to use electricity during non-peak than peak hours to save money, since it's cheaper during that time,' said EMA chief executive Khoo Chin Hean at a press conference announcing the scheme yesterday.

Payment modes will also change under the scheme.

Instead of opening an account and waiting for the bill to be posted to their homes, consumers can buy their electricity packages via various online payment channels such as Internet banking, ATM machines and convenience stores. Top-ups can be made.

New 'smart' electronic meters using wireless technology will take readings every 30 minutes. Electricity usage will be tracked and sent electronically to SP Services.

To prepare for the new scheme, the EMA will, from next month, supervise the installation of 'smart' meters in 200 households and shops in Marine Crescent and Telok Kurau, areas with a good mix of Housing Board flats, shops, and private houses.

This will be a technical test to see that the meters work and that electricity usage data can be collected electronically, among other things.

After that, another 1,000 volunteer households throughout Singapore will not only have meters installed, but may also try out the system. The existing 200 households can also opt to do this.

They will not buy electricity from the private retailers as yet, but from SP Services, which will come up with various packages.

Costing $3 million, the 25-month trial is expected to end in mid-2009. EMA will remain the regulator, said Mr Khoo.

Business Times 19 Oct 07
Smart meters may allow households to shop for electricity
Move paves way for different power retailers; SP Services' role to shrink
By Chen Huifen

(SINGAPORE) The Energy Market Authority will this month begin testing 'smart meters' that could make monitoring electricity usage simple and inexpensive - and allow different retailers to sell power to small consumers. This means that in a couple of years households could shop for electricity the way consumers now pick their mobile phone service providers.

This electricity vending system (EVS) could mean complete liberalisation of the power market and diminish the retailing role of SP Services.

Since 2001, the power generation and electricity market has been liberalised in stages, with five active retailers now competing in three-quarters of the electricity demand market.

The remaining 25 per cent of the market, consisting of some 1.2 million small consumers, has continued to buy electricity from SP Services, a subsidiary of Singapore Power, as it did not make economic sense to open up this segment to competition. The issues of billing and meter reading on their own would have been a substantial hurdle.

However, falling prices of smart electronic meters and improved technology have changed the situation.

'Even as recently as two years ago, the smart meters were in the range of $700 to $800,' said EMA chief executive Khoo Chin Hean. 'It's come down to about $100 to $300.'

The new meters will be able to transmit usage readings to a central system without the need to deploy manpower to read meters on site. They are also capable of displaying usage trends on a half-hourly basis. Consumers can thus monitor their power usage and manage it accordingly.

The proposed EVS will be a pre-pay programme in which consumers will be able to choose between electricity supply packages offered by different retailers. They can top up their credit through payment channels such as Internet banking, ATMs and convenience stores.

Mr Khoo said that EMA would set out guidelines to ensure that there is fair competition and also hassle-free switching by consumers to different providers. Consumers will also be given reminders when credit runs low.

Although unable to put a figure to it, Mr Khoo expects the EVS to reduce backend administration and business costs. It will cut the electricity supply application process to three steps, from a current eight-step procedure that includes submitting a form, opening an account, physically turning on the supply, meter reading, billing and payment collection.

The smart meters for the test have been sourced from Europe and China and their reading systems will be installed for 200 small consumers located in the Marine Crescent/Telok Kurau area. The consumers will not experience any change in their power supply or billing arrangement.

If the pilot test shows that the scheme is feasible, EMA will extend the installation to 1,000 small consumers. Following further modification of the EVS prototype, a trial run could begin in November next year and a complete rollout could be achieved by the second half of 2009.

The project will cost about $3 million to implement. It is co-funded by SP Services and The Enterprise Challenge (TEC) under the Prime Minister's Office.

'We are quite optimistic that there can be certain benefits . . . that will make consumers say: 'Yes, I don't mind this scheme,' . . . The role of SP Services as a retailer will start to shrink,' said Mr Khoo. 'Whether it will shrink to zero or not, we do not know.'

SP Services will, however, remain the neutral manager of the metering systems. It will consolidate and provide usage data to the Energy Market Company, which will then facilitate financial settlements.

The opening of the small consumer segment spells a new opportunity for the five existing commercial retailers - Keppel Electric, SembCorp Power, Senoko Energy Supply, Seraya Energy and Tuas Power Supply. The five already compete in the big consumer segment, consisting of about 10,000 clients, each with a power consumption of at least 10,000 kW a month.

Today Online 22 Oct 07
Clean power, green power
Electricity suppliers should disclose carbon footprints
Letter from Eugene Tay Tse Chuan

I REFER to the article, "Smart meter trials bring homes a step closer to cheaper power?" (Oct 19).

While I welcome the good news that consumers are able to choose their electricity supplier, I would prefer to read about consumers and companies having the ability to choose a greener electricity supplier.

In Singapore, the "power generation sector is the single largest primary source of carbon dioxide emissions", according to the National Climate Change Strategy. Consumers and companies are increasingly aware of environmental issues, especially climate change and the urgent need to reduce carbon emissions.

They may not look at price as the only factor in deciding their supplier. They would prefer a greener supplier that emits less carbon dioxide for the same unit of electricity generated as compared with other suppliers.

The electricity suppliers can give consumers and companies the ability to choose greener electricity by disclosing their carbon footprints, either voluntarily or by law. They would no longer compete on price alone but also on their environmental performance.

This creates market incentives for suppliers to reduce carbon emissions and be seen as a greener electricity supplier. They would find ways to be more efficient and generate electricity using cleaner fuel sources or renewable energy sources.

In addition, the carbon footprint disclosure by suppliers would help companies calculate their own carbon footprints, as the carbon emissions from electricity supplied are required in the calculations.

They can then decide to switch to a greener supplier or take actions to reduce carbon emissions in light of global climate change concerns and stricter restrictions on carbon emissions in the future.

Companies that know their carbon footprints are also in a better position to tap on carbon-trading schemes.

The carbon footprint disclosure by electricity suppliers would give consumers and companies more choices, and is a step towards reducing Singapore's carbon emissions.

Straits Times Forum 23 Oct 07
Liberalising energy mart: Savings, security issues
Letter from Wong Weng Fai

I REFER to the articles, 'Electricity consumers may get to choose from 6 power retailers' and 'Temasek puts Tuas Power up for sale' (ST, Oct 19).

Singapore seems committed to the opening up of its energy-supply market. Potentially, fair competition can bring about lower prices but some issues seem not to have been addressed publicly.

Introducing the Electricity Vending System seems like an expensive endeavour. A pilot implementation for households and shops will cost $3 million. What is not clear is who will bear the cost of installing the new electricity metering system for all of Singapore's households. Will the electricity-distribution companies have to pay for it (ultimately passing it on to the consumer) or will taxpayers have to pick up the tab?

What if, after all the cost and effort, there is no savings for the average consumer?

What portion of the cost of supplying electricity is due to distribution? I am of the impression that the price of electricity is governed primarily by the price of crude oil. If this is so, and assuming that our current supplier has not been overcharging us, what magnitude of savings can the average consumer expect?

With regard to liberalising our energy-generation market, I have not seen any discussion on what impact potentially complete foreign ownership of our strategic energy resources would have on our national security. In times of national crises - possibly war - what will be the model of operation?

Business Times 30 Oct 07
Competition in the electricity market

THE Singapore electricity market's 'big bang' - or full market opening - looks set to finally come about in late-2009 or shortly thereafter. With further competition expected, especially from new power players, consumers here can hopefully look forward to smaller electricity bills.

However, as the power stations' current feedstocks - both fuel oil, and piped natural gas from Malaysia and Indonesia - are pegged to crude oil prices, electricity tariffs here may only start coming down noticeably once Singapore starts importing liquefied natural gas (LNG) from 2012. Still, 2009 will mark a crucial milestone in electricity market liberalisation here.

That is when an up-to-now uncontested segment - the 1.2 million small consumers here, comprising mainly households - may finally get the chance to choose which electricity supplier they want - instead of relying just on monopoly SP Services, a Singapore Power subsidiary. That will also be when ownership of the last of the three biggest generating companies (gencos) here - now in Singapore investment company Temasek Holding's hands - will go to others, including possibly foreign utilities or investment funds. The three account for 86 per cent of electricity generation here.

The stage for both was set on the same day, Oct 18, when both the Energy Market Authority and Temasek announced respectively Electricity Vending System (EVS) trials (for the households) and the start of the genco sales, which kicked off with Tuas Power. Ultimately, whether households here will take to the EVS, or smart electronic meters, boils down to economics and their user-friendliness.

A turn-off for consumers may be the pre-pay system with the EVS, although hopefully this can be offset by more competitive tariffs offered by the five existing commercial retailers (possibly even more others in future) compared to just that by SP Services currently. Furthermore, between now and 2009, technological advances may also help increase the system's user-friendliness.

The commercial roll-out of the EVS - targeted for second half 2009 - will finally see full market opening here, as the five commercial retailers already compete in the big consumer segment of about 10,000 companies, each with a power consumption of at least 10,000kW a month.

Jurong Island is a good example of the no-holds-barred battle for consumers that is brewing, with big gencos like PowerSeraya and Tuas Power investing in new cogeneration plants to compete with incumbents like SembCorp Cogen to supply other utilities like steam and cooling water to industries there.

Once the dust settles after the sale of the three big gencos here, new battle lines may also emerge as foreign players enter the Singapore market. Electricity tariffs should start coming down by that time, with this gaining momentum once the gencos start importing (hopefully cheaper) LNG from around the globe.
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