Mr Murali Pillai: To ask the Minister for Trade and Industry having regard to the more than doubling of natural gas prices to date which is expected to cause electricity prices in Singapore to be higher in the next quarter, what further steps will be taken to (i) ensure that the price of electricity does not rise steeply for this period (ii) ameliorate the impact of higher electricity prices on Singaporean households which are particularly affected by the economic effect of the COVID-19 pandemic and (iii) encourage Singaporean households to be more energy efficient at the same time.
Written Answer by Minister of State for Trade and Industry Low Yen Ling
1. Over the last one and a half years, fuel prices have more than doubled. Many jurisdictions, including China, Japan, the European Union and the United Kingdom have been affected. As an energy importer, Singapore will also be impacted by price movements in the global energy market.
2. We cushion the impact of short-term spikes in fuel prices in two ways. One, power generation companies buy the bulk of their natural gas under multi-year gas supply contracts. Two, they pass on some of this price stability to consumers through fixed price plans.
3. Nonetheless, sustained high fuel prices will eventually feed into our electricity prices. We are importing close to 100% of our 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. Fuel prices have been low for some time and had dipped to their lowest in the last 20 years earlier this year, but as we have seen, may rise as global demand recovers.
4. At the same time, wholesale electricity prices have been depressed below the cost of producing electricity in the last five years, due to the overcapacity in generation. 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.
5. Eligible households will receive GST Voucher – U-Save rebates to support them with their utility expenses. This year, we provided an additional 50% of rebates through the GST Voucher U-Save Special Payment which was disbursed in April and July 2021.
6. At the same time, we encourage households to use electricity prudently in various ways.
a. SP Services has been progressively replacing households’ analogue (cumulative) electricity meters with advanced electricity meters which allow households to track their electricity consumption through the SP Utilities Mobile App. This will help households better understand their electricity usage patterns and encourage them to be more energy efficient.
b. In addition, NEA provides online resources via the E2Singapore website to help households to design energy-efficient homes and adopt energy-saving habits. For example, they 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 Home Owners for energy-efficient home renovation tips.
c. Last November, NEA and PUB launched the Climate Friendly Households Programme to encourage the 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.
7. 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.