Things to Understand About Electric Tariff in Singapore

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The very first out of the many things to understand about electric tariff in Singapore is that it is divided into two. There is the regulated tariff that is calculated under the guidance of the Energy Market Authority (EMA) and there is the unregulated tariff practiced by independent energy retailers.

An important aspect of the regulated tariff is that it is the only tariff offered by the largest energy retailers in Singapore, SP Group. Independent retails calculate their tariff differently. While the regulated tariff takes into account the cost of producing the energy, adding transportation fees and services, independent retailers have the freedom to negotiate with their suppliers. The idea is very simple. If a retailer can negotiate a lower transport fee and a lower price per kWh with the electricity producer, it can offer a lower price to the retail consumer.

While switching to an independent electricity supplier can save you money on the electric bill, there are additional things to understand about electric tariff. When you negotiate a contract with a supplier, they will offer a fixed tariff for a predetermined period. It can be anything between 6 months and 24 months. Once that period expires, you are on a rolling contract and the tariff may change.

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Lastly, one of the important things to understand about electric tariff is that the regulated one is updated every quarter. Under the guidance of EMA, the regulated tariff for retail consumers is recalculated based on the price of natural gas. In Singapore, 95% of all electricity production is done with natural gas. Some of it is imported. Renewable energy is an option only in the form of solar energy but that sector is growing slowly. Other forms of renewable energy are not cost-effective enough to be used in Singapore and even solar energy is dependent on daylight and sunny days.

 

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