Singapore’s Electricity Market Set for Disruption
Union Energy Group CEO Ellen Teo says Singapore’s electricity market is facing disruption with newcomer Union Power paving the way for more competitive pricing and sustainable energy solutions.
As we adjust to the new normal of working from home, there are rising concerns about surging energy consumption rates in Singapore, which rose by 16% last year. With the Government facing pressure to meet increased supply demand while achieving its goal to reduce peak carbon emissions by 2050, this creates opportunities for new players and market strategies to enter the electricity markets.
The recently announced plan by the Government to import electricity from Malaysia for a trial period may facilitate greater use and exchange of clean energy regionally. While Singapore has “ample spare capacity” to generate more electricity on its own, this bilateral agreement may be a testing ground for a larger move towards improving regional infrastructure for upscaling renewable energy production.
Such a move may open Singapore’s Open Electricity Market (OEM) to more regional importers and inevitably pressure major electricity retailers to become more price-competitive and environmentally conscious. Since the nationwide rollout of the OEM in 2018, almost half of Singapore’s 1.4 million household consumers have switched to an electricity retailer instead of continuing to buy electricity from SP Group.
Fortunately, due to a host of demand and supply factors in fuel production as well as the “difference between electricity consumption forecasts and actual consumption”, the SP group has announced that the electricity tariff for the next three months will fall by 3.1% for the first 3 months of 2021 compared with the quarter before.
As the crowded OEM continues to see brands jostle to stake a claim in the electricity sector’s ever-growing pie, a relatively new entrant, Union Power, says it has a game plan to shake up the market.
As a subsidiary of Union Energy, Singapore’s largest domestic supplier of bottled-gas, the family-owned firm is leveraging on its network which cuts across a smorgasbord of businesses, government bodies and households in Singapore, to charge ahead of Union Power’s competitors.
Union Power says its “pioneering innovative green energy solutions” as sustainability begins to take root in Singapore’s post-Covid recovery plans. The brand says it will soon become one of the first retailers to bring thin-film solar panels, which it claims will boast greater efficiency in offsetting carbon emissions, utilisation of roof space and lower installation cost, into the local market.
Its ambition to provide accessible and affordable means to switch to renewable energy via Union Solar has allegedly been met with positive sentiments.
We asked Union Energy Group CEO Ellen Teo to comment on how Union Power plans to meet supply demand in Singapore.
“There is a higher order issue that needs to be addressed before we answer this question. In a world that is trying its best to contain the pandemic has impacted on people’s professional and personal lifestyle. What happened last year has seriously changed the way we conduct business and manage our lifestyle. We will probably feel the magnitude of this effect in the years ahead. What is key for us as a business or any business is to be adaptive and to identify opportunities for growth. The pandemic has also created awareness that we will need to ensure that our sources of food, use of energy is sustainable,” says Teo.
According to Teo, sustainability will be a key driver for growth, and, she says sustainability will increase in importance, which lead to the the creation of their new venture, Union Solar. We asked Teo to explain some of the challenges a new entrant will face in this market.
“Size does matter for economies of scale. Singapore’s small physical size (716.1km2), high population density and land scarcity limits available space to install solar panels. Secondly, output of energy from a PV system is largely dependent on environmental factors such as the amount of sunlight hours, cloud cover and shadow casting from high rise buildings in a high-density area. Lastly, Solar PV projects are not just any construction project. An efficient system requires detail designing and timely maintenance to last 20 years and beyond. The recent foreign manpower crunch and severe shortages points to a lack of local technical personnel in this industry. In Singapore, deploying Solar Energy is definitely challenging, however every challenge is an opportunity to grow,” says Teo.
A version of this story first appeared in January 2021 on Indvstrvs.