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Less than half of all households have switched electricity providers

SINGAPORE — While 40 per cent of households switched electricity providers in the first year the market was liberalised, only 8 per cent more did so in the second year.

Two years after the electricity market was liberalised, 48 per cent of households have switched providers.

Two years after the electricity market was liberalised, 48 per cent of households have switched providers.

  • Only 48 per cent of households have signed up with a new electricity provider two years after the market was liberalised
  • Majority of those who switched opted for fixed-price plans
  • Those who did not switch said they found it troublesome to compare prices and are worried a new provider might close down

 

SINGAPORE — While 40 per cent of households switched electricity providers in the first year the market was liberalised, only 8 per cent more did so in the second year.

This means that as the Open Electricity Market (OEM) enters its third year, more than half of all households here are still buying electricity from SP Group — the main electricity provider to all households before the liberalisation — at a higher price.

The Energy Market Authority (EMA) on Thursday (Nov 26) gave an update on the OEM, two years after it was rolled out in November 2018

The retailers with the largest share of residential consumers are:

  • Keppel Electric (23 per cent)
  • Geneco (21 per cent)
  • iSwitch (13 per cent) 
  • Tuas Power (13 per cent) 

Of the consumers who made the switch, the majority opted for fixed-price plans with 5 per cent opting for plans with fixed discounts off the tariff.

When asked why there is such a low take-up rate, EMA said that it is “encouraging” that almost half of the household accounts have made the switch. 

The main objective of the OEM is to provide households with more choices in their electricity purchases, it said. 

“It is not compulsory nor is there a deadline to switching. They can opt to switch to an electricity retailer or choose to continue buying electricity from SP Group at the regulated tariff,” it said in an e-mail statement. 

EMA added that even after switching to a retailer, households have the option to switch back to SP Group or to another retailer of their choice depending on their needs. 

Some residents TODAY spoke to said that having to compare different price plans by different providers, procrastination and a fear of service disruptions were some reasons they have not made the switch.

Mr Othman Hamid, a 71-year-old taxi driver, said he has not made the switch from SP Group because he found it troublesome to compare different price plans.  

“Our household doesn't use that much electricity so we think savings also won’t be so much to go through all that hassle,” he said. 

His monthly electricity bill averages S$60.

Ms Irene Chan, 55, who similarly pays an average of S$55 a month for her electricity, also felt the negligible savings might not be worth the effort of changing providers. 

EMA had earlier said that households who switched providers enjoyed savings of 20 to 30 per cent compared to the regulated tariffs. 

Ms Chan, a financial services consultant, said that she is also concerned given the news that some providers have exited the market. 

At least five retailers have dropped out, according to a May 2019 Business Times report. They are Red Dot Power, Energy Supply Solutions, SmartCity Energy, Charis Electric and Sun City.

“What if I switch to them and then they close up shop? Of course someone will take over but it’s a hassle,” she said.  

A survey by EMA, however, found that among 7,000 households who made the switch, 97 per cent found it easy to do so.  

Ninety per cent also they were satisfied with the service provided by their new energy retailer. 

The survey also found that 90 per cent of respondents compared price plans across different retailers before making the switch, with over 60 per cent using price comparison websites to do so.

The EMA polled consumers who switched to energy retailers from November 2019 to May 2020, and 1,600 people who renewed their existing contracts in the first half of this year.

Second Minister for Trade and Industry Tan See Leng said in Parliament last month that households should consider switching to fixed-price plans, given that fuel price fluctuations are expected to continue into the months ahead.

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OEM electricity Energy Market Authority

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