NYJC 2023 H2 Economics 9570 P1 Answer

Question 1: Singapore Electricity Market Extract 1: The Retail Electricity Market The Singapore electricity market consists of the wholesale electricity market and the retail electricity market. Power generation companies have to bid to sell electricity in the wholesale electricity market. Depending on electricity demand and supply, the price of electricity in the wholesale electricity market changes. Electricity retailers then buy electricity in bulk from the wholesale electricity market and compete to sell electricity to consumers. Since 2001, the Energy Market Authority (EMA) has progressively opened up the retail electricity market to competition. This is to allow consumers to enjoy more choices and flexibility when buying electricity. Consumers will also benefit from competitive pricing and innovative offers while enjoying the same electricity supply. The Open Electricity Market marks the final phase of market liberalization efforts. In November 2018, the Open Electricity Market was extended to all consumers in Singapore, giving them the option of buying electricity on a plan from any retailer that best meets their need. Source: Adapted from openelectricitymarket.sg, accessed on 18 August 2023 Table 1: Market share of Electricity Retailers in Singapore between 2014 and 2021 (Unit: Percent (%)) 2014 2015 2016 2017 2018 2019 2020 2021 SP Services Ltd 33.0 30.8 30.1 27.7 24.6 20.4 15.8 15.5 Tuas Power Supply Pte Ltd 12.7 12.6 13.4 13.6 13.7 15.1 17.8 15.4 Keppel Electric Pte Ltd 13.4 11.5 10.4 13.8 14.4 14.1 15.0 15.0 Seraya Energy Pte Ltd 14.2 14.3 12.9 12.2 11.9 14.5 14.7 14.1 Senoko Energy Supply Pte Ltd 14.6 12.7 13.0 11.6 11.8 13.1 12.5 13.3 SembCorp Power Pte Ltd 8.3 12.2 9.8 10.9 11.9 12.8 12.8 13.1 Source: Energy Market Authority Singapore, accessed on 18 August 2023 Extract 2: Exits by Singapore electricity suppliers sparked by price volatility amid global energy crisis The prospect of surging energy prices for the next few years amid volatile conditions are what spurred the departure of two retailers from Singapore's open electricity market (OEM), experts said. Of the 10 remaining retailers, at least two others are set for the exit door. Singapore's fourth-largest retailer iSwitch, as well as Ohm Energy, announced their departures from the market just days apart. Ohm Energy on Oct 15 informed customers it was exiting the market effective the same day due to "a volatile electricity market" rendering its prices unsustainable. An e-mail to an existing Diamond Electric customer seen by The Straits Times cited "increasing costs of electricity" for the discontinuation of a similar plan. Earlier this month, Trade and Industry Minister Gan Kim Yong cautioned that fuel prices have mor