With yesterday’s launch of the Open Electricity Market by the Energy Market Authority in Singapore, all eyes are now on how households and businesses will benefit. Judging by a pilot study completed earlier this year, the signs are very positive indeed. The opening up of the Singapore electricity market has enabled consumers to decide which electricity retailer best meets their needs and requirements to power their homes.
The liberalisation has further empowered consumers to make an informed choice about the cost they are paying for the amount of electricity used. Under the Open Electricity Market, the amount of electricity consumed and how it translates to the final electricity bill is now in the hands of the consumer because individual households can keep tabs on the amount of electricity used, and how they could possibly adjust usage levels to benefit from discounts offered by the retailers.
This flexibility in deciding on a retailer that offers the most competitive rates should nudge consumers to be more conscious of electricity usage levels, and in turn encourage them to save electricity.
Piloting the Open Electricity Market in Jurong
Residents in the Western part of Singapore, in Jurong, experienced the first taste of electricity retail contestability in April 2018. A total of 108,000 households in the Jurong district were selected for the soft launch of the Open Electricity Market in which 14 approved retailers are offering electricity plans for households.
To date, about 30 per cent of residents in this estate are now buying their home electricity from retailers. These residents are enjoying discounted rates of up to 20% or more from the prevailing rates charged by SP Group, a market support services company regulated by Singapore’s Energy Market Authority. For a four-room household, this represents about S$16 to S$17 savings per month or S$380 to S$400 savings over two years. Some retailers are also offering sign-on gifts and rebate schemes. The numbers are set to increase as the Energy Market Authority implements the scheme in more housing estates. The market will be fully liberalised by the end of this year.
Empowerment Through Technology
The Internet of Things will take energy efficiencies to the next level. We are already witnessing the advent of smart homes, where appliances are automated to turn on or off based on pre-set timings and typical usage patterns. The smart home of the future will allow people to track their energy usage pattern to save money. Sensors can be installed to determine consumption details of all home appliances. These data can be transmitted online to a mobile application to monitor lifestyle habits and usage patterns. Knowing which appliance use up the most energy can enable the users to plan and cut down energy consumption and replace non-energy efficient appliances.
If the end goal for open market liberalisation is to encourage households to cut down on usage, the level of infrastructure has to develop in tandem to help consumers be more aware of the amount of electricity they consume. Singapore’s public housing developer The Housing Development Board and SP Group announced recently that they are exploring a centralised energy management system at the new Tengah town. One of the ideas being explored is to set up a smart energy concierge, which will use smart controls, sensors and algorithms to integrate the town’s energy solutions to generate efficiencies and energy savings. It is possible that these AI-based systems have the potential to be further integrated with smart home appliances to enable consumers to keep tabs on consumption levels on and off-peak every half hour.
Off-peak energy rates are lower and consumers can adjust their lifestyle to take advantage of the lower rates during non-peak periods. Consumers will be able to do this by installing smart Advanced Metering Infrastructure (AMI) meters in their homes that “talk” to the centralised smart energy concierge. Retailers will then have the flexibility to package further bulk discounts at an estate level. The upshot of all this is that consumers will increasingly become more cognizant of the amount of electricity they use daily and to get them thinking about how they are using this precious resource and to explore alternative sources like solar power.
This article first appeared on the C&W Services site under the title “Power to the People” on August 6, 2018. For more on how C&W Services can help your business manage its energy consumption, check out our end-to-end energy service offering here.