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Keppel Electric leads power retail rivals to SP Services

THE power play in Singapore's electricity retail market switched up further last year, with the incumbent SP Services losing more grip over market share, even as stalwart Keppel Electric gained ground to emerge as the largest retailer among the challengers to SP's dominance.

The National Electricity Market of Singapore (NEMS) Market Report 2018, put out by wholesale electricity market operator Energy Market Company (EMC), said that even the smallest electricity retail players - those with a market share of under 3 per cent each - grew their share of the pie amid "robust" competition. Their joint market share has grown from 1.5 per cent in 2016 to 4.1 per cent in 2017 to the current 5.3 per cent.

But it is still early days for Singapore's Open Electricity Market (OEM). Soft-launched a year ago and rolled out in phases from last November, it has until May to include the fourth and final geographical zone.

Early signs indicate a bigger rejig ahead as consumers make their pick from among 13 retailers, apart from default retailer SP Services, which is part of the Temasek Holdings-owned SP Group.

EMC chairman Agnes Koh said in the report: "Since the launch (of the OEM), electricity retailers have been offering attractive price plans to eligible consumers to gain a foothold in the retail market. Competition among the other electricity retailers have resulted in continual market share changes among them.

"... in 2019, we can expect competition to intensify as electricity retailers gain experience and strive to increase their market share."

As consumers, lured by lower tariffs plus other sweeteners ditch SP Services for another retailer, SP's market share has been shrinking.

Last year, it slid 2 percentage points to 26 per cent, in a clear sign of its waning grip on the retail space. It had first slid below the 30-per-cent mark in 2017.

However, it still held the largest market share last year as it remained the default retailer for households and small businesses for much of that period.

Among the big players, Keppel Electric's share clicked higher by 0.3 percentage point to 13.9 per cent; Sembcorp Power's market share jumped the most - by 0.8 percentage point - to 11.7 per cent.

When contacted, a Keppel Electric attributed its gains to a two-fold strategy in the past year.

A company spokesman said: "For its commercial and industrial customers, Keppel Electric provides customised electricity solutions and plans; for the OEM market, it focuses on offering end-consumers reliability and value."

Sembcorp deposed Seraya Energy as Singapore's third largest retailer last year, after Keppel and Tuas Power Supply.

Sembcorp Power's vice-president of retail Lim Han Kwang said the company is achieving "good traction" in the OEM residential power market. So far, around 45,000 households have switched over to its side.

Not every player made gains in market share over the period. Tuas Power and Seraya jotted declines of 0.2 and 0.5 percentage point respectively year on year.

The market share data in the NEMS report was computed based on metered demand, that is, actual electricity consumption of the retailers' consumers. The data does not include residential consumers who switched retailers but did not opt to install smart meters, EMC said; the latest data on market share may thus not fully reflect the changes arising from the OEM.

Competition also heated up in the power generation space. The three players in this arena are Tuas Power Generation, Senoko Energy and YTL PowerSeraya. Their combined market share, consistently on a downward trend since 2014, fell another 2.2 percentage points to 53.2 per cent.

EMC said that Singapore's economy grew 3.2 per cent last year, but that year-on-year growth in electricity consumption stood at only 1.6 per cent.

Total electricity consumption exceeded the 50.0 terawatt hour (TWh) level for the first time since the market started, registering 50.4 TWh in 2018.

Compared to the same periods in 2017, all four quarters in 2018 clocked higher year-on-year electricity consumption.

The largest increase was recorded in the second quarter, with consumption rising 3.2 per cent. This rise coincides with April 2018 having registered the largest temperature increase from the year before.