Households encouraged to use electricity 'prudently' as costs increase due to rising fuel prices: Gan Kim Yong

SINGAPORE: Households in Singapore are encouraged to use electricity "prudently" as electricity prices increase due to doubling of fuel prices, said Minister for Trade and Industry Gan Kim Yong on Tuesday (Oct 5).

In a written parliamentary reply on Tuesday, Mr Gan said fuel prices have more than doubled over the last one and a half years, with many places affected, including China, Japan, the European Union and the UK. 

"As an energy importer, Singapore will also be impacted by price movements in the global energy market," said Mr Gan. 

The minister was responding to questions by Member of Parliament Murali Pillai (PAP-Bukit Batok) regarding the prices of natural gas, which have more than doubled to date and are expected to cause electricity prices to be higher in the next quarter. 

Mr Pillai asked what further steps will be taken to ensure the price of electricity does not rise steeply for this period.

He also asked what steps will be taken to ameliorate the impact of higher electricity prices on households that are particularly affected by the COVID-19 pandemic, as well as encourage households to be more energy-efficient at the same time. 

SP Group announced last Thursday that electricity tariff for households will increase by 3.1 per cent for the October to December period this year. This is due to the higher cost of fuel for producing electricity by the power generation companies. 

Mr Gan said the impact of short-term spikes in fuel prices is cushioned in two ways - power generation companies buy the bulk of their natural gas under multi-year gas supply contracts. They also pass on some of this price stability to consumers through fixed price plans. 

Sustained high fuel prices will eventually feed into Singapore's electricity prices, said Mr Gan, adding that Singapore is importing almost 100 per cent of its energy needs today. 

"In spite of best efforts to deploy solar energy in Singapore, we are land constrained and will need to continue to rely on energy imports one way or another, and be subject to global price movements," he said. 

Fuel prices have also been low for some time and had dipped to their lowest in the last 20 years earlier this year, said Mr Gan. However, this may rise as global demand recovers. 

At the same time, wholesale electricity prices have been "depressed" below the cost of producing electricity in the last five years, due to overcapacity in generation, he said. 

"With rising demand from sectors such as data centres, 5G networks and electric vehicles, we will see electricity prices rise and normalise.

"No company that is commercially run will sell electricity below cost perpetually," Mr Gan added. 

Eligible households will receive GST Voucher - U-Save rebates to support them with their utility expenses, said Mr Gan. 

In 2021, an additional 50 per cent of rebates was provided through the GST U-Save special payment, which was disbursed in April and July 2021. 

HOUSEHOLDS ENCOURAGED TO USE "ELECTRICITY PRUDENTLY"

Mr Gan also encouraged households to use "electricity prudently" in various ways. He said SP Services have been progressively replacing households' analogue electricity meters with advanced ones that allow households to track their electricity consumption through the SP Utilities mobile app. 

This would help households better understand their electricity usage patterns and encourage them to be more energy-efficient, he said. 

Additionally, the National Environment Agency (NEA) provides online resources via the E2Singapore website to help households design energy-efficient homes and adopt energy-saving habits, Mr Gan added. 

He used an example where households can use the Life Cycle Cost Calculator to compare the energy efficiency levels of different home appliances. They can also refer to the resource efficiency guide for new homeowners for energy-efficient home renovation tips. 

Last November, NEA and the national water agency PUB launched the Climate Friendly Households Programme to encourage 1-room to 3-room HDB households to switch to using resource-efficient appliances. 

"Each eligible household is given e-vouchers to offset their cost of purchasing LED lights, energy-efficient refrigerators, and water-efficient shower fittings," said Mr Gan. 

"We encourage all Singaporeans to adopt energy conservation as a way of life – from designing an energy-efficient home, to choosing energy-efficient appliances and adopting energy-saving habits," he added.