Friday, 22 September 2023

We are shifting our daily news to Gutzy.Asia Support us there!

Electricity price fixing by the Generation Companies?

by Jasmine Cheng

The electricity and water prices are major concerns for Singaporeans. Did anyone notice it kept going up?

We need to understand how electricity is priced to know why it goes up. The Government has liberalized the Singapore Electricity Market with intention of letting the market forces to determine the proper pricing for electricity. In theory, it makes sense.

But does it make sense in practice? The Singapore Electricity Market has two major players. The Generation Companies (GenCo) are on the supply side while we have the buyers or electricity consumers like ourselves on the demand side. The GenCo will have to bid for the right to sell on the Energy Market Company platform on a half-hourly basis (48 periods in 24 hours) based on the expected demand. This will ensure that the prices will reflect proper market demand. It should work – at least for most of the times. But it is not perfect.

What if some GenCo band together and decided to shut down their generation sets (forced outages) on an unplanned basis? In this case, the sudden lack of supply will drive the half-hourly electricity prices up. And this is where the problem starts! But there is neutral regulator, Energy Market Authority (EMA) that is supposed to monitor this kind of activities and take corrective actions. With and active and efficient EMA, the GenCo would think twice before taking any action to fix the market. And we the electricity consumers at the bottom of the food chain will benefit.

But sadly, this is not the case. The facts do not lie. Our GenCo have been struck by a streak of bad luck and their set keep shutting down unexpectedly from March 2018 and as recent as 27th August 2018. From March 2018 onward, there are more than 20 unexpected shutdown downs! Is our GenCo so inefficient? As a result, the half-hourly electricity price shot through the roof. How does the GenCo benefit? Well, if the half-hourly price is $100/MWh and there is a sudden loss of supply, what will happen? The price will spike! And in such case, the GenCo may bid and sell at $200/MWh. What a Windfall!

The EMA may fine the GenCo for the unplanned shut downs. But how much will the GenCo make as a result of their unplanned shutdowns? EMA should release the number of additional windfall and fine. Example, the fine is $20,000.00 and the Windfall is $5,000,000.00. If the fine is paltry, it is a mere slap on the wrist. And how will the consumers be compensated? Should the unexpected windfall be distributed to the consumers who suffered?

If I am a consumer buying from a retailer at a tariff that is based on the half-hourly prices + a margin, I am screwed big time! Why is it that the GenCo can keep doing such unexpected shut downs with such boldness? And the blood will keep flowing. And will EMA every explain to the public what happened? Why don’t EMA tell the public the real statistics of the forced outages? Why kept so silent?

Singapore is a Country that is built on fairness. Are we going to have the usual reply? Sorry, forced outages due to unexpected situations? And allow the GenCo to pocket the gains from the forced outages? When is the government ever going to have the courage to deal with this elephant in the room while consumers like us bleed?

Do they have the courage to take actions against the Genco?

Notify of
Inline Feedbacks
View all comments

Latest posts

Election surprises and certainties: Dissecting Tharman’s presidential win

In the 2023 Presidential Election, Mr. Tharman Shanmugaratnam secured a stunning 70.4% landslide victory, surprising many, including himself. Despite expectations that TKL would win the opposition votes, voters from both camps showed a preference for Tharman's charisma and perceived competency. As Singapore reflects on the outcome, questions arise about the election's fairness and the real implications of Tharman's dominant win.

Volunteer as a Polling and Counting Agent for Singapore’s 2023 Presidential Election

For the upcoming Singapore Presidential Election on 1st September, members of the civil society have spearheaded an initiative to strengthen our democratic fabric. We invite committed individuals to join us as Polling and Counting Agents, standing together for a transparent, fair, and just election. This vote counting exercise, organized by members of civil society, is not specifically in support of Mr Tan Kin Lian, a candidate in the upcoming Presidential Election. It's an exercise in active citizenry. Nonetheless, Mr Tan endorses this initiative, which hinges on his candidacy, championing transparency, and has given permission for the results to be shared publicly.

Reflections from the Centenary: The Legacy of LKY and Singapore’s Future

Gilbert Goh reflects on the LKY centenary event: an inspiring showcase of a leader's global legacy juxtaposed against current challenges, urging Singapore to continue its path of progress.

Lim Tean advocates for Tan Kin Lian: A visionary leader for Singapore’s Presidency

In his speech at Mr Tan Kin Lian's launch of his presidential bid, Mr Lim Tean passionately championed the need for a truly Independent President. Highlighting Mr Tan Kin Lian's unique credentials and genuine concern for the wellbeing of Singaporeans, the Peoples Voice leader emphasized the pressing challenges of rising living costs and job insecurities faced by the public. Mr Lim depicted Mr Tan Kin Lian as a beacon of hope for the nation, advocating for a leader who genuinely understands and represents the people’s aspirations.

Tan Jee Say endorses Tan Kin Lian for President: A courageous, genuine, and humble...

In advocating for a truly representative leader, Tan Jee Say underscored Tan Kin Lian's humility, courage, and genuine dedication. Highlighting the pressing need for restored public trust and effective independence, Tan Jee Say emphasized that Tan Kin Lian, as the 'People's President', would bring back hope to Singaporeans and champion true democracy

Tan Kin Lian’s pledge: Rekindling unity and charting a vigorous future for Singapore

In the press conference to announce his bid for the Singapore presidency, Tan Kin Lian emphasizes safeguarding Singapore's reserves and strengthening public service integrity. Drawing on his 30-year leadership at NTUC Income, he envisions a future with affordable living, accessible housing, and job stability, pledging collaboration with the government for a united nation.

Strengthening Singapore’s political foundations: A call to action by Leong Mun Wai on Singapore’s...

Leong Mun Wai urges Singaporeans to strengthen political checks and balances, emphasizing, 'The best is yet to be for Singapore if we dare to make the right decision in upcoming elections.

Trending posts