Singapore’s Electricity Market Takes a Wild Turn
In a shock to the city‑state’s energy scene, two major independent electricity retailers are headed for retirement, while at least three others have put the brakes on welcoming any new customers. The real reason? Wholesale power prices have shot up so high that the whole business model is turning into a baroque nightmare.
Who’s pulling the plug?
- iSwitch Energy – the second‑biggest independent retailer in Singapore – announced on its website that it will stop providing electricity from November 11 because the market conditions have become untenable. The company kept its comments tight‑fisted, preferring silence to a full explanation.
- SilverCloud Energy – a provider serving commercial, industrial, and residential clients – told Reuters they’re exiting the market too. They’re urging customers to hop over to other suppliers or hand their accounts back to the state‑run SP Group.
Why the collapse is happening
- On the global stage, gas prices have defied gravity. LNG has leapt over 500 % in price from a year ago, now hovering above $30/mmBtu. Meanwhile, Brent crude oil – the benchmark for most of Singapore’s long‑term gas contracts – is hitting all‑time highs.
- “Retailers can’t sell to customers at a price that makes sense,” says James Whistler, global energy head at Simpson Spence Young. “The base tariff they’re forced to charge is way below what futures marketplaces are telling us. Add to that the front‑end spikes in spot prices, and you have an unsustainable situation.”
- A once well‑designed market‑making scheme has failed, amplifying the disparity between supply and demand and leaving many providers water‑logged with losses.
What the market looks like now
- Open Electricity Market, the platform that lets Singaporeans pick their supplier, presently showcases only 8 of the 12 existing retailers offering clear plans for consumers.
- Industry insiders warn that as energy prices soar, more retailers might shut shop in the coming months.
- Singapore’s retail electricity arena opened to competition for businesses back in 2001 and for households in 2018, making this disruption feel like an unplanned twist in a well‑tuned house‑warming party.
Market mechanics explained
- Quarterly tariffs are built from two parts: fuel costs (average daily natural gas prices over the first two‑and‑a‑half months of the prior quarter) and non‑fuel costs (the expense of generating and delivering power to homes).
- Singapore LNG Corp is actively scouting for cargoes and extending its LNG inventory to brace for the tight global supply.
- Commercial load prices have already risen by 50 % year‑over‑year and are projected to climb further.
Global ripple effects
- In Britain, a ripple of energy bankruptcies forced around 1.7 million customers to shuffle providers.
- China and India are hearing the stomping drum of power shortages, and blackouts are no longer an occasional party trick.
In short, Singapore’s once competitive, mildly pricey electricity market is now casting a long shadow, flirting with the volatility of global commodity markets. And the punchline? Even a city‑state with a reputation for efficient public services is feeling the heat of the world’s energy tide.
