3 Singapore Electricity Providers Are Quitting
Singapore's energy regulator said on Saturday that it is working closely with retailers zapped by volatile electricity prices and said there will be no disruption to their customers' electricity supply, Jessica Jaganathan reported for Reuters.
Photo Insert: Singapore Power
Singapore's wholesale electricity market prices, which are determined every half-hour depending on demand and supply conditions, have been hit by higher prices for sustained periods over the past two weeks, the Energy Market Authority (EMA) said.
EMA stressed some factors behind the volatility included, the regulator said in a statement, including a spike in liquefied natural gas (LNG) prices globally, higher than usual electricity demand in the city-state, curtailment of piped natural gas from West Natuna, and 'low landing pressure of gas' supplied from South Sumatra.
"Electricity retailers who have under-hedged their positions may be exposed to the price volatility in the market," EMA said. "Some may find it challenging to sustain their operations and may choose to exit the market. This is a consequence of their business decisions and can be expected in open and liberalized electricity markets, where participants may enter and exit the market, and market consolidation may occur."
At least three electricity providers have announced plans to exit Singapore, while two others have stopped accepting new customers. Global wholesale gas prices have surged as production and transit problems have lowered supply just as demand took off in a post-pandemic economic recovery.
EMA said it is working closely with retailers facing challenges and will facilitate their efforts to hedge against future price volatility. It will also allow retailers to suspend their operations by transferring their customers to state-owned SP Group.
There will be no disruption to the electricity supply of the customers of exiting retailers, EMA vowed.