Measures in place to protect consumers’ interest in open electricity market: EMA

In his letter, “With SP Group operating national power grid, how competitive will prices be in open market” (April 5), Mr Francis Cheng Choon Fei said that the Government should regulate the prices charged by SP Group and power generation companies for the grid services provided and electricity sold respectively.

The Energy Market Authority (EMA) regulates the energy sector to protect the interests of Singapore consumers. EMA also safeguards reliable energy supply to Singapore consumers and promotes effective competition in the energy market.

SP Group is licensed by EMA to develop and operate the national grid that delivers the electricity produced by power generation companies to all consumers.

The grid charges that SP Group can impose are regulated by EMA to ensure that SP Group delivers reliable electricity supply at reasonable prices to all consumers.

All power generation companies need to compete in the Singapore Wholesale Electricity Market to generate and sell electricity on a half-hourly basis. This ensures that all electricity retailers, who buy electricity in bulk from the Singapore Wholesale Electricity Market at wholesale prices, have access to competitively priced electricity.

To further promote competition, EMA introduced the electricity futures market in 2015. The electricity futures market allows the retailers without generation assets (ie. independent retailers) to hedge their price risks and compete effectively in the retail electricity market.

We thank Mr Cheng for his feedback and assure him that EMA will continue to safeguard consumer interests in the open electricity market.