Is OEM (Open Electricity Market) retailers the cheapest option for electricity? Heard of Wholesale Electricity Price?

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The liberalisation of Singapore’s electricity market started on 1st April 2018. Dubbed the Open Electricity Market (OEM), it allows the consumers to choose their electricity retailer. When it started many electricity retailer started to dangle carrots with freebies and rebates to attract consumers.

According to EMA, as of 1st March 2020, 46% of household accounts has signed up and below is the breakdown of the retailers.

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Souce: EMA

Are OEM retailers really the cheapest?

However, have you ever wondered whether OEM is the cheapest? Other than the regulated tariff, SP Group actually offers wholesale electricity price ( Personally, I have signed up for wholesale electrity price with SP and below are costs for my last six months.

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Source: Finance4UandMe analysis; EMA data

There is a fixed fee for “Meter Ready & Data Mgmt Fees” of $2.18 (before GST). I compared my savings against regulated tariffs rates and I saved between 38% and 53% each month. From my understanding, OEM retailers offers up to 25% discount off the regulated tariff, depending on the package. This leaves about 20%-30% of additional savings that could have been saved by the consumer.

Any risks with signing up for Wholesale Electricity Price?

However, signing up for wholesale electricity price has its risks as well. Wholesale electricity price will go up when there is an increasing electricity demand and/or power outage. The chart below shows how the highest and lower wholesale electricity price in 2019. Personally, I do not think that its doing itself justice. It should show total duration each monthy when the price is below the regulated tariffs.

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Conclusion: Personally satisfied with the savings with Wholesale Electricity Price

Personally, I have been very satisfied with my savings on Wholesale Electricity Price. I am not advocating everyone to move to Wholesale Electricity Price, but do note that even if you moved to OEM retailer packages, the OEM retailers are creaming off 20%-30% each month from you. And this is on top of any bulk discount that they may enjoy.

PS: For those who are well versed in Singapore’s electricity market, below is actual full breakdown of Wholesale Electricity Price charges in the monthly bill. Please do not ask me to explain what these charges are, its way beyond my intellectual ability.

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