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An alternative way to operate the electricity market

1. I wish to suggest an alternative way to operate the electricity market in Singapore.

2. This is my understanding of how the electricity market operates at present:

a) There are several power producers. They generate electricity and offer them to the market at their prices. The authority (EMA) accepts the offers based on the demand by end users (i.e. households and commercial users).

b) During high demand, the electricity producers may charge high price to extract a high profit. This can cause the price to be quite volatile.

c) To reduce the volatility, the authority has offered “vesting contracts” to certain producers to generate the electricity at agreed prices. They are not subject to the fluctuation

d) The authority allows electricity distributors to take the electricity from the market and offer them to the end consumers at various pricing plans, which can be fixed or based on the benchmark prices (which can fluctuate from time to time).

3. Here are the changes that I propose:

a) The authority should provide long term contacts at fixed prices for producers to provide electricity for up to 80% of the projected demand. It allows the producers to contract for long term supply of gas or oil at agreed prices and offer them to the market. The supply to meet the remaining 20% of demand can be based on the market price, which can fluctuate according to the world price for gas and oil.

Although the “vesting contracts” offered by the authority to some producers already falls under this approach, I suspect that the supply covered by these vesting contracts is probably much smaller than 80%.

b) The authority should have battery storage to handle the fluctuation between the low and high demand during the day. This allows the market to store the electricity during the low periods and draw the electricity from the battery during the peak period of the day.

c) There is no need to have several distributors to reach the end users. The authority can offer the electricity to the end users based on the average price paid for the electricity plus a small markup to cover the cost of distribution. As a large portion of the electricity produced is based on prices for long term contracts, the price is likely to be quite stable. There is no need to offer fixed price contracts for end users.

4. The changes will have the following benefits:

a) The electricity price will be quite stable over time, as a large proportion of the supply is based on fixed price contracts.

b) The authority can benefit from the competition between the producers to find more efficient ways to produce the electricity. However, they do not need to speculate on the volatile prices as they can match their purchase of oil and gas to meet their commitments to supply the electricity to the market.

c) There is no need to create wasteful spending on marketing and customer servicing by many distributors.

5. The above approach is based on my understanding of the electricity market in Singapore and the practice adopted by other countries.

 

Tan Kin Lian

 

 

yyy
READER COMMENTS BELOW

22 Responses to “An alternative way to operate the electricity market”

  • Singaporeans R Free Riders:

    Joker:
    It must be that your questions are not worth answering.

    No wonder Singaporeans are unemployable.. xoxo cannot even answer a simple question like what are you going to do to right your claimed of FAKE FEEDBACK N FAKE *GROUND* so that ministers will hear the real feedback and real ground.

    I can imagine when a boss asked a Singaporean PMET xoxo:
    Thanks for telling me the problem. So what is your solution?

    Singaporean PMET xoxo: Silence… diam. diam. all the way.

    Which company in their right mind will want to hire such Singaporean?

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  • Joker:

    The nonperforming but highly overpaid CEO goes to the road and pester people for solutions. Return the pay and quit!

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  • ganeshsk:

    Singaporeans R Free Riders: Singaporean PMET xoxo: Silence… diam. diam. all the way.

    Singaporeans don’t give feedback today because the G don’t like feedback and solutions given. that is why they prefer FT who diam diam do their jobs and are cheap.

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  • Light The Way:

    Tell that to the SP Group if you wish to make a difference.

    But prepare yourself for rejection.

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  • I_am_Xi:

    Singaporeans R Free Riders: No wonder Singaporeans are unemployable.. xoxo cannot even answer a simple question like what are you going to do to right your claimed of FAKE FEEDBACK N FAKE *GROUND* so that ministers will hear the real feedback and real ground.

    I can imagine when a boss asked a Singaporean PMET xoxo:
    Thanks for telling me the problem. So what is your solution?

    Singaporean PMET xoxo: Silence… diam. diam. all the way.

    Which company in their right mind will want to hire such Singaporean?

    You are not only a stupid confused sunway educated moron, you are also a liar. xoxo already answered. xoxo sees it not their job to educate you so they refuse to submit to your lowestest level by responding to you. You are such a stupid confused sunway educated lying moron you probably do not know STFU. For the last time, let you be educated. Go read the book by Dan Lyons on how not to respond to a stupid confused sunway educated lying moron.

    To xoxo, hats off to you for not pointing out to the stupid confused sunway educated lying moron. Your policy of not responding to a posted on TRE watchlist is the best policy. Best wishes to you for a Happy Chinese New Year. Like you I have decided not to read stupid confused uneducational lying posts any more after this.

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  • Zhenzidan:

    I_am_Xi: Go read the book by Dan Lyons on how not to respond to a stupid confused sunway educated lying moron.

    Hahaha…! You ask this number one PAP ass-licker to go and read? He will spend his time only licking the balls of PAP!

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  • Sporeans Keep Govt Employed:

    Your utilities bill is an estimate. They come read meter only quarter.

    Best solutions is give us the lowest price and use just one provider. Pass some law that they cannot increase price.

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  • Singaporeans R Free Riders:

    I_am_Xi: You are not only a stupid confused sunway educated moron, you are also a liar. xoxo already answered. xoxo sees it not their job to educate you so they refuse to submit to your lowestest level by responding to you. You are such a stupid confused sunway educated lying moron you probably do not know STFU. For the last time, let you be educated. Go read the book by Dan Lyons on how not to respond to a stupid confused sunway educated lying moron.

    To xoxo, hats off to you for not pointing out to the stupid confused sunway educated lying moron. Your policy of not responding to a posted on TRE watchlist is the best policy. Best wishes to you for a Happy Chinese New Year. Like you I have decided not to read stupid confused uneducational lying posts any more after this.

    Hahaha… illiterate PAP voters change moniker to I am Xi to lick xoxo

    The 8000+ readers here knew that you are the stupidestest canon fodder because it was xoxo who challenge to me not to talk cork but he ran away from my question.

    Opposition shout so loud but DARE NOT ANSWER QUESTION PUT TO THEM

    Opposition DARE NOT DECLARE that they will serve the masses and want nothing in return?

    Just like Smart Nation, when I question him, his reply is evasive ranging From “I used it in the spiritual sense…” to “I don’t know” and ran away from my questions.

    Just like xoxo, when I question him “what are you going to do to right your claimed of FAKE FEEDBACK N FAKE *GROUND* he goes silence diam diam”
    https://www.tremeritus.net/2023/01/11/if-you-still-want-to-use-the-word/

    This is the standard of Opposition.

    Only know how to complain but they themselves have no solutions.

    Come on, Opposition.
    If you have any CREDIBILITY, answer my questions and DECLARE that Opposition will serve the masses and want NOTHING (KOSONG) in return?

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  • electricity:

    Electricity is best to have economy of scale for production to have best control of costs.Also the Capital required.

    Normally it is best under the Government but only problem is often inefficient run compare to Private profit oriented company.

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  • Kaiju:

    Are you nasi lemak uncle – xoxo – spokeman?
    I thought you were Xi’s loudspeaker?

    He usually hides away when asked tough questions. But now got spokeman to represent him? (:

    I_am_Xi:
    xoxo already answered. xoxo sees it not their job to educate you so they refuse to submit to your lowestest level by responding to you. You are such a stupid confused sunway educated lying moron you probably do not know STFU. For the last time, let you be educated. Go read the book by Dan Lyons on how not to respond to a stupid confused sunway educated lying moron.

    To xoxo, hats off to you for not pointing out to the stupid confused sunway educated lying moron. Your policy of not responding to a posted on TRE watchlist is the best policy. Best wishes to you for a Happy Chinese New Year. Like you I have decided not to read stupid confused uneducational lying posts any more after this.

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  • Why electricity is expensive:

    TKL battery storage idea may add up large cost to electricity bill, storage of large amount of electricity is impossible and expensive. The problem why electricity is expensive because electricity depend on gas prices which contract is with foreign nations. Singapore is a small nation has no bargaining power and foreign nations charge the price they want for their advantages. If they do not earn enough, then they may change the contract to a new one. They are big nations and they are close to us, we have no choice. Next, the pricing of electricity charge to people is high because of SP and government. Government want to charge us more if we use more. SP is inefficient and old, not like private company. CEO and employee earn large salaries. Now EV is going to use electricity, electricity not enough and is going to be expensive like petrol. Electricity demand for EV will bring electricity price up as fossil fuel price like gas need to generate electricity will rise because of demand and foreign nations will once again jack up price for profit.

    My idea to reduce electricity price is not new but still cannot solve the problem. It is like the government use solar panel to generate electricity. Solar panel on every HDB flat, connect flat to flat in some area where possible. To reduce the price of electricity, we need close down SP and vote out PAP.It is nonsense to ask us pay more for electricity when the cost of producing electricity is so much lower than the actual price we pay.

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  • In China, there is only ONE elec supplier and that is the official government agency (电力局). There is no competition and the authority sets the official price for electricity, whole country on standard rate, different usage, different rates.

    There is also the Tier billing system where the usage is billed at 3 categories, depending on usage. The rates are revised on a yearly basis.

    Most farmers have their own solar panels and they are free to install them, no need to seek official approval. Some even have their own mini DIY water-powered generator, also no need to seek official approval, but are encouraged to let the city officials asses their safety.

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  • hahaha:

    TKL cannot be president, it is obvious he lacks knowledge.

    Few things we need to know:
    1. Most of our energy is generated by natural gas bought from Indonesia and North Borneo.
    2. There are many retailers, they are just reseller of SP, they are not energy providers etc. So SP controls the wholesale price, this is why a lot of resellers had chosen to exit because they eventually found it unsustainable to resell when SP are giving them high wholesale price. The only ones left are GLCs.

    Singapore can of course get cheap and low cost energy but it wont. They want to maximise profit at our expense, just like Bus, MRT, Car, Telecom etc. They have monopolies on almost anything.

    Singapore is summer all year round, Solar Power is Cheap and Clean. Solar Panels cant last more than 28 years and the ROI is around 7 years. So it means after Year 7, the Solar Panels is FREE but still supplying energy till 28 or more years. All HDBs and industries can install Solar Power, the cost of solar panels are low since it is now a commodity. And maintenance cost also very low.
    Of course, we cant count totally on Solar, in deployment Solar is connected to Power Grid. At night, the Power Grid will have to take over most of the power supply. But again, there is also storage which could be deployed. There are many ways to efficiently supply power using a combination of Solar and Grid.

    Singapore has avoided to deploy Solar for obvious reasons, they want to keep milking and maximise profits from selling amongst world highest utility rate!!!

    Even if our ideas are superior or help to cut cost, this greedy leadership would never consider. Unless this govt is voted out, they will only focus on milking and over charging us with their lousy policies and ideas.

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  • ah seng:

    PAPPY wants to maximise and milk Singaporeans for almost anything, they will not deploy anything that saves or lower cost because they are GREEDY!

    Solar panels are low cost, can be used up to 28 years or even longer.
    Solar panels will pay off withing 7 years, the rest are FOC till 28 years or more.
    Maintainence also negligible.
    Sun is always there.

    It is used with mixture of power grid and solar, storage of energy can be done for distribution at night or rainy season.

    Remember, our energy is mostly generated by cheap natural gas not fossil fuel.
    Of course SP or PAPPY knows Solar will save heap but they have not wanted to deploy on HDB because they want u to PAY!!!

    Our utility rate is amongst highest in the world, not to mention COE, ERP, BTO etc… also amongst highest in the world.

    To solve all these maximise profit and leeching on Singaporeans, PAPPY needs to be voted out.

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  • only stupid people vote pap:

    Why electricity is expensive:

    To reduce the price of electricity, we need close down SP and vote out PAP.It is nonsense to ask us pay more for electricity when the cost of producing electricity is so much lower than the actual price we pay.

    very well said. we agree with you 100% that pap is the culprit. pap must be voted out. there is no other way.

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  • Singaporeans R Free Riders:

    TRE Tech:
    In China, there is only ONE elec supplier and that is the official government agency (电力局). There is no competition and the authority sets the official price for electricity, whole country on standard rate, different usage, different rates.

    There is also the Tier billing system where the usage is billed at 3 categories, depending on usage. The rates are revised on a yearly basis.

    Most farmers have their own solar panels and they are free to install them, no need to seek official approval. Some even have their own mini DIY water-powered generator, also no need to seek official approval, but are encouraged to let the city officials asses their safety.

    Ah Ha… at the minimum Tech provide ideas, it may not be solution depending on whether his ideas is adopted or not.

    Unlike SOME OPPIE, only EVERY DAY KPKB but offer no ideas and ran away when you asked them questions.

    Goh Chong Tong is right. We must ask Opposition question:

    What can Opposition do for me ?

    Next question:
    Opposition, please DECLARE
    that Opposition will serve the masses and want NOTHING (KOSONG) in return?

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  • Light The Way:

    Of course, the incumbent party and their corporate cronies were the root cause of the peoples’ misery.

    That’s why till this day they still insisted on buying water at 3 sen per thousand gallons.

    You think they would actually pass over the savings to the 61.2% paying goondus who voted for them?

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  • Light The Way:

    In addition, their monthly bills come with these little graphs to show your household electricity/water consumption and quips like “Almost There” or “Keep Trying”.

    It’s a psychological reward to applease you in case you’re wondering why the utility charges are so ridiculously high.

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  • I am Free Rider:

    Unlike stupid pap puppies, only EVERY DAY KPKB about OPPO but offer no ideas and run away when you asked them questions.

    OPPO supporters are right. We must ask pap question:

    What can pap do for me?

    Next question:
    pap, please DECLARE that pap will serve the masses and want NOTHING (KOSONG) in return!

    pap answers. we pap serve the masses by taxing them more so that we can help them more. we pap can do all these BS things to the masses because the masses are stupid sinkies who vote us whether to tax them more or tax them much more.

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  • xoxo:

    @I_am_Xi

    Thanks for your kind support.
    It is much cherished when sgs support each other in spirit and IN TRUTHS.

    Have a Happy n Healthy Prosperous Chinese New Year!

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  • PAP mandate strong:

    @ What can pap do for me?

    Well for a start. If unluckily and if only ( touch wood ), you need paxlovid its available.

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  • knnn:

    Everything is astronomically priced in Singapore through govt or GLCs.

    1. COE
    2. ERP
    3. BTO
    4. Rental
    5. Utility
    6. Telecom
    7. Petrol
    8. Medical
    9. Others

    All these are either directly from the policies or controlled by the GLCs they are operating from. They tell you the price of land is very high and give you of camouflaged accounting here and there to tell you that they are losing money. Everything they are losing money but they dont show you the books, they show you a few page and tell you they are losing millions or billions to justify for the high prices they are charging you.

    Electricity can be cheaply provided using Solar but of course they wont deployed massive to HDB, it will lower the massive revenue they are billing us.
    All those retailers are just reselling and marking up the wholesale price of SP.

    The maximum greed and profit model wont change for all policies, they are trying to monopolise and control everything by buying out competitors, even Kopitiam is gone now.

    People here can suggest many things or whatever, it wont be fulfilled, even oppositions propose in parliament. The only way is to use your votes to vote against them, making this parliament becoming multi party or two party where they will always consider your feedback or fear being voted out.

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