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Singapore's largest independent electricity retailer iSwitch powers down

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Source: https://www.businesstimes.com.sg/energy-commodities/singapores-largest-independent-electricity-retailer-iswitch-powers-down

IN what marks a big blow to Singapore's liberalisation of the power sector, iSwitch Energy, the city-state's largest independent electricity retailer, has decided to bow out from retail operations from next month.

The retailer cited the current market conditions behind the decision to cease its retail operations on Nov 11. "Over the past 6 years, iSwitch has had the privilege of serving the Singapore electricity market and collectively saving consumers over S$150 million on their energy bills against the SP tariffs...

"We have also helped maintain focus on sustainability and the green goals... Unfortunately, due to current electricity market conditions, we will be ceasing our electricity retail operations on Nov 11," said the retailer in a note to customers.

One market watcher remarked: “From hero to zero. What a shame.”

iSwitch, Singapore's fourth-largest electricity retailer, has garnered a market share of some 13.1 per cent of Singapore's Open Electricity Market (OEM) as of end-April this year. RCMA, a unit of global commodity house RCMA Group, is parent company of iSwitch - one of Singapore's 12 electricity retailers.

The news comes as a big shock as iSwitch was widely deemed as a solid and nimble player in the retail market. In the early months of Singapore's liberalisation, the green energy retailer scooped up another retailer, ES Power's contracts worth S$15 million, and has grown its market share steadily.

Household accounts currently held under iSwitch will be transferred to SP Group with effect from Nov 12. They can also choose to switch to another retailer before the transfer to SP Group. No contract termination fees will be charged.

Still, market watchers expect tens of thousands, if not more, of residential consumers who are impacted by iSwitch's move, to contend with higher power bills.

That is because extraordinary spikes in spot electricity prices - an anomaly that has recurred several times since July - have prompted Singapore’s electricity retailers to pass the buck to new household customers across the board, by raising the prices of fixed-price plans under OEM to cushion the hit on business margins. A check by The Business Times (BT) last month revealed that retailers have raised fixed-price plans - be it for 6, 12, 24 months or more - by 10 to 20 per cent in August and September versus June, before the wild swings in spot electricity prices.

"This is bad news for the retail sector," said one market watcher.

In July, the Uniform Singapore Energy Price (USEP), which varies half-hourly depending on demand-supply conditions in Singapore’s wholesale market, shot through the roof and hit a multi-year high of S$1,514.86 per MWh (megawatt-hour). The sustained high prices over two days pushed up July’s average USEP to S$167.04 per MWh, a level not seen in six years, according to an earlier report by BT. The USEP skyrocketed again last month (on Sep 23), this time to as high as S$2,036.02 per MWh – another fresh record in eight years. On that day too, the supply cushion in the wholesale electricity market reached a low of 11 per cent. Anything below 20 per cent signifies tight supply conditions.

“This has been the most volatile period in the history of the electricity spot market,” said a key executive of an electricity retailer.

The staggering spikes that have confounded industry players appear far from over. On Tuesday (Oct 12), the USEP peaked at S$3,008 per MWh as the supply cushion reached a low of 10.9 per cent. At the daily level, the USEP averaged S$1,597 per MWh that day. This is the highest daily level since the start of the National Electricity Market of Singapore (NEMS) in 2003, the Energy Market Company’s senior vice-president of markets and operations Henry Gan told BT. The second highest daily USEP registered was $997/MWh on 26 Nov 2012. (Under the Singapore Electricity Market Rules which govern the NEMS’ operations, a price cap of S$4,500 per MWh is in place for the USEP. This ensures that the USEP will never exceed that level regardless of prevailing market conditions).

The city-state’s OEM that was launched three years ago with a bang, involves some 1.3 million household accounts and 67,000 small business accounts. Spoilt for choice with the promise of cheaper power bills of some 20 to 30 per cent through sweet packages offered by electricity retailers, one out of two households have since switched out of SP Services – the incumbent supplier pre-liberalisation. “It feels like we have given back everything we have worked so hard for over the past three years. It’s a pity,” said the executive.

The big question next is - are there exits by even more retailers afoot?

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LNG/FO prices went up too much.

Is it possible that they hedged and made big bucks on the paper so they are now calling it a day? After all, they don't need to compensate comsumers for shutting down.

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Dont make sense. The articles says it is the city-state's largest independent electricity retailer.

It is not a good sign. Most likely energy prices like oil will remain high for quite a while. Pump prices for vehicles will also be just as bad.

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SG market too small for so many players. 

Last time create TV station... bleed and bleed and finally haemorraged and closed down.

I think those MVNO sooner or later will go the same way.

 

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46 minutes ago, Thaiyotakamli said:

Too much competition

yah. the price is not very competitve, but so many electric retailer sharing the pie, each only earn a bit. . . 

Lucky I am with geneco. *pray hard pray hard, nothing happens to them.
Those from iswitch fixed pricing one will jialat. Now they go find a retailer, won't offer a good price due to the rising cost liao.

image.thumb.png.9fbe887d6ae07fa078be7fa456c35220.png

I am currently paying 18cent/kwh. Phew.

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8 minutes ago, kobayashiGT said:

yah. the price is not very competitve, but so many electric retailer sharing the pie, each only earn a bit. . . 

Lucky I am with geneco. *pray hard pray hard, nothing happens to them.
Those from iswitch fixed pricing one will jialat. Now they go find a retailer, won't offer a good price due to the rising cost liao.

image.thumb.png.9fbe887d6ae07fa078be7fa456c35220.png

I am currently paying 18cent/kwh. Phew.

Geneco one of most popular. Wont close one la i just renewed recently with them few months ago

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Just now, Thaiyotakamli said:

Geneco one of most popular. Wont close one la i just renewed recently with them few months ago

Using Geneco for 3.5 years

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Double whammy for the electricity retailers the way I look at it. 

Unlike commercial sales contract, where buyers have to commit a min and max consumption volume for energy retailer to hedge their gas supply, there is no such requirement for household consumers, so there can be a larger than norm fluctuations from month to month. 

And with WFH becoming common, household consumption generally went up by at least 15% or more, so if the retailers did not hedge the right amount of gas supply, there is a high chances they are bleeding now with increasing gas price + consumption (i.e. the higher the usage volume, the more they will lose). 

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7 minutes ago, Carbon82 said:

Double whammy for the electricity retailers the way I look at it. 

Unlike commercial sales contract, where buyers have to commit a min and max consumption volume for energy retailer to hedge their gas supply, there is no such requirement for household consumers, so there can be a larger than norm fluctuations from month to month. 

And with WFH becoming common, household consumption generally went up by at least 15% or more, so if the retailers did not hedge the right amount of gas supply, there is a high chances they are bleeding now with increasing gas price + consumption (i.e. the higher the usage volume, the more they will lose). 

Yeah agree. Open market has a lot of risks for retailers in such small market.

xuexue kenna squeezed not just by competitors, but also by your key supplier (SP and oil price)

how to survive ?

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Twincharged
46 minutes ago, Carbon82 said:

Double whammy for the electricity retailers the way I look at it. 

Unlike commercial sales contract, where buyers have to commit a min and max consumption volume for energy retailer to hedge their gas supply, there is no such requirement for household consumers, so there can be a larger than norm fluctuations from month to month. 

And with WFH becoming common, household consumption generally went up by at least 15% or more, so if the retailers did not hedge the right amount of gas supply, there is a high chances they are bleeding now with increasing gas price + consumption (i.e. the higher the usage volume, the more they will lose). 

Maybe but greed could also have enticed them to hedge less than what is prudent. 

2 hours ago, Old-driver said:

SG market too small for so many players. 

Last time create TV station... bleed and bleed and finally haemorraged and closed down.

I think those MVNO sooner or later will go the same way.

 

Unlike independent electricity retailers, MVNO don't have to deal with a very volatile wholesale electricity market but competition is probably as intense with current $10-20 plans. 

Need to wait for full adoption of 5G to see if some weaker players will be squeezed out. 

 

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i need to sign up some fixed plan pronto

any good fixed plan with promos going on now?

sembcorp current plan prices are expensive

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4 hours ago, Carbon82 said:

Double whammy for the electricity retailers the way I look at it. 

Unlike commercial sales contract, where buyers have to commit a min and max consumption volume for energy retailer to hedge their gas supply, there is no such requirement for household consumers, so there can be a larger than norm fluctuations from month to month. 

And with WFH becoming common, household consumption generally went up by at least 15% or more, so if the retailers did not hedge the right amount of gas supply, there is a high chances they are bleeding now with increasing gas price + consumption (i.e. the higher the usage volume, the more they will lose). 

But at the moment, it seems like when things are not going their way, retailers can just pack up and go without honouring their contract obligations to the consumers.  Like Jamesc pointed out, heads they win, tail you lose

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Supercharged (edited)

Extracted from BT Facebook post

The Business Times (BT) understands that Ohm Energy and Best Electricity - relatively smaller independent retailers with collectively less than 50,000 household accounts - are considering to cease or sell their electricity retail operations in Singapore. One other retailer is also believed to be contemplating an outright exit.

Edited by Dafansu
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Supercharged (edited)

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Edited by Dafansu
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8 minutes ago, Dafansu said:

Extracted from BT Facebook post

The Business Times (BT) understands that Ohm Energy and Best Electricity - relatively smaller independent retailers with collectively less than 50,000 household accounts - are considering to cease or sell their electricity retail operations in Singapore. One other retailer is also believed to be contemplating an outright exit.

 

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I advised my fren to go with iSwitch

She sign up 3 year plan to get free Ipad!

Now they no more.

Haha so she gets free Ipad and can sign with someone else

whoever gives the most cash vouchers.

:D

How to give free Ipad and still make money?

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