With the economy facing an uncertain 2017, many Singapore businesses are looking to reduce their overheads to make sure they are in the strongest possible position.
This could include looking at salaries, rent and raw materials. But often utilities are assumed to be a fixed cost.
Companies may look at reducing their energy consumption, whether by streamlining manufacturing processes or encouraging greener practices in their offices, but few ask whether they could actually be paying a lower price for each unit of electricity they consume.
So can you pay less for your electricity? The answer is yes.
Since the government deregulated the energy market, businesses have the option to purchase electricity from providers other than SP Services, provided monthly consumption is over 2,000 kWh. (The 2,000kWh of electricity consumption is estimated to be about $400 – $500 a month of electricity payment.) It also opens up a range of packages, including guaranteed prices ensuring stability, or flexible contracts that allow you to take advantage of changes in spot prices.
Because the scheme is not yet open to domestic users, many Singaporeans are unaware of the opportunity it provides their business.
Most big industrial companies already take advantage of this flexibility: because they are such heavy users of energy it’s often one of their most expensive inputs, so they have a vested interest in being at the forefront of efforts to control costs. Industry used more than two fifths of all Singapore’s power in 2015, according to the Energy Market Authority, so even a small saving in percentage terms can add up to a large sum of money.
Information is an extract from EMA’s Singapore Energy Statistics 2016
For SMEs though the take-up has been slower, both because small businesses tend to worry that they won’t be able to cope with the hassle of switching suppliers, and because they are sometimes simply unaware that they have the option to change in the first place.
So is changing of electricity supply from SP Services the right choice for your small business? There are two key questions you have to answer in order to make a decision.
Singapore Electricity Prices – 2016*
*SP tariff extracted from SP Services Media Release on Electricity Tariff Revision dated 30 Dec 2016. TPS Discount off SP Tariff is a discount off the SP tariff for the quarter while TPS Fixed rate is based on a quarterly average
Is my business eligible?
If you are eligible to switch providers then you are known as a contestable consumer. To be a contestable consumer your business account must consume more than 2,000 kWh a month. If your business has multiple locations in Singapore then it’s possible to combine their usage to meet the threshold: for example if you have two sites that each uses 1,500 kWh per month, your total consumption is 3,000 kWh which makes you eligible. It doesn’t matter if the accounts are separate, as long as they belong to the same business.
Likewise if you have one site that meets the criteria and has already switched provider, you can switch at all your other sites, irrespective of their individual energy consumption.
Is the process complicated?
No. In fact suppliers such as Tuas Power offer a wide range of plans so you can pick the one that’s most suited to your business, in the same way you can choose a package from your mobile phone provider. Power Max for example has no fixed contractual period and gives the most flexibility to accommodate changes in your future business operations. Power Smart meanwhile offers guaranteed savings of 10% from your SP Services tariff. Tuas Power is able to understand your business energy requirements to advise you on the right plan for your business. For companies which are keen to minimise their energy use, Tuas Power can provide you with an energy audit to help you identify areas to cut your bills and reduce your environmental impact.
For more information on the deregulated energy market and how it can benefit your business, simply complete the following: