The most underused cost lever in most businesses
Most Singapore businesses renew their electricity contracts passively. The incumbent retailer sends a renewal offer, the accounts team approves it, and the contract rolls over. No comparison, no competitive process, no negotiation. This is how businesses consistently pay more than they need to for one of their largest operating costs.
The Open Electricity Market gives every eligible business the tools to run a genuinely competitive process at each renewal. The businesses that use those tools systematically get materially better outcomes than those that do not. The spread between a passively renewed contract and a competitively tendered one is typically 1 to 3 cents per kWh. On a 500,000 kWh per year account, that is S$5,000 to S$15,000 per year, every year.
Renewal versus re-tendering: a critical distinction
Renewal means accepting your existing retailer's offer for a new term. It is fast and low-effort. Your retailer knows your consumption profile and has no strong incentive to offer their most competitive pricing, you are already their customer.
Re-tendering means inviting multiple licensed retailers to compete simultaneously for your account. You submit your consumption data to all of them, receive comparable offers, and negotiate from a position of genuine market information. Retailers price more aggressively when they know they are competing.
The difference in outcome is consistent and significant. A re-tender run properly, with your 12-month consumption data, a clear comparison framework, and sufficient lead time, almost always produces a better outcome than a passive renewal with the incumbent.
The renewal timeline: start 90 to 120 days out
This is where most businesses make the first mistake. The procurement process for an electricity contract takes longer than it looks from the outside:
- 90 to 120 days before expiry: Begin internal preparation. Gather 12 months of consumption data and half-hourly load profiles. Review current contract terms, particularly early termination charges and auto-renewal clauses.
- 60 to 90 days before expiry: Issue the request for proposals to multiple retailers. Allow retailers two to three weeks to return competitive quotes.
- 30 to 60 days before expiry: Evaluate offers, negotiate, and execute the new contract. Allow time for contract review.
- Within 30 days of expiry: If you have not yet acted, your options narrow. You may have to accept the best available offer rather than the best market offer.
Starting at 90 days gives you time to run a proper competitive process, evaluate offers carefully, and negotiate without urgency. Starting at 30 days gives the incumbent an advantage they should not have.
Fixed rate versus discount off tariff: which suits the current market?
The right contract structure depends on market conditions, your consumption profile, and your organisation's appetite for cost volatility.
Fixed-rate contracts lock in your cents-per-kWh rate for the contract term, typically 12 to 24 months, sometimes 36. The retailer absorbs wholesale price risk. You get cost certainty and straightforward budgeting. The downside is that if wholesale prices fall significantly during your term, you are locked in at a higher rate.
Discount-off-tariff contracts set your rate as a fixed discount below SP Group's regulated tariff, which is revised quarterly. Your effective rate tracks the market with a guaranteed saving. You benefit when tariffs fall, but you are exposed when they rise.
In the current market context (mid-2026), the Uniform Singapore Energy Price has stabilised at historically low levels after the 2021 to 2023 spike period. Regulated tariffs have eased from highs of 33 to 35 cents per kWh in 2022 to the current 27.27 cents per kWh. Fixed-rate offers from retailers building products into this lower-cost environment are currently competitive. For organisations with a medium-term view that wholesale prices may rise as LNG contracts reprice, locking in a longer fixed-rate contract at current levels is a reasonable strategic choice.
What to check before signing: a nine-point checklist
- Contract duration: Is the term appropriate for your business's flexibility needs? A 36-month contract signed just before a relocation or major downsizing becomes expensive.
- Pricing mechanism: Fixed, discount-off-tariff, or wholesale-indexed? Understand exactly how your rate is calculated and what inputs can change it.
- Early termination charges: How are ETCs calculated? Understand the formula and the maximum exposure before signing.
- Auto-renewal clause: Does the contract auto-renew? Under what conditions, and at what rate? Under EMA rules effective June 2026, retailers must provide two advance notifications before auto-renewal triggers.
- Carbon tax pass-through: Does the contract allow the retailer to adjust your rate if the carbon tax changes? Given Singapore's published escalation schedule, this clause determines how much of the increases from 2026 through 2030 you absorb immediately.
- Security deposit: Is a cash deposit required? Confirm the amount, terms of return, and whether it earns interest.
- Pass-through charges: Is the quoted rate all-inclusive, or are network charges, market support services fees, and carbon tax passed through separately? Ensure you are comparing offers on the same basis.
- Bundled products: Does the plan include renewable energy certificates or green energy components? If so, the electricity rate must be disclosed separately. Understand what you are actually paying for.
- Demand charges: For larger industrial accounts, some contracts include separate maximum demand or capacity charges. These must be evaluated alongside the energy rate to produce a meaningful total cost comparison.
Common mistakes at renewal
- Accepting the incumbent's first offer. First offers from existing retailers are rarely their most competitive. Indicating you are running a competitive process consistently produces better terms.
- Comparing only the headline rate. A 0.5 cent per kWh saving can be more than offset by a larger security deposit, a restrictive ETC structure, or unfavourable carbon pass-through terms.
- Locking in a long fixed-rate contract at a market peak. Businesses that signed long fixed-rate contracts at the 2022 tariff highs paid significantly above market for the following two years. Contract length decisions should reflect a view on market direction.
- Letting the contract lapse. Falling off contract and reverting to SP Group's regulated tariff, or triggering an auto-renewal at terms you did not choose, is the most avoidable electricity procurement outcome. A calendar reminder set 120 days before expiry costs nothing.
- Underestimating consumption growth. If you sign for a contracted volume that is too low and overconsume, the excess may be charged at a higher rate depending on contract terms.
EMA consumer protections: what they cover
EMA's Code of Conduct for Retail Electricity Licensees establishes the minimum standards for retailer behaviour. Under rules effective June 2026, retailers must provide two advance notifications before a contract auto-renews (the first at least ten business days before expiry, the second within three calendar days of the renewal date). Auto-renewed rates must be lower than the prevailing regulated tariff. If your contract does auto-renew, you have 60 calendar days to exit without early termination charges.
These protections establish a floor. They do not, however, guarantee that the auto-renewed rate is the best available rate. The only way to ensure you are getting the best available pricing is to run a competitive process before your contract expires.
Electricity contract renewal is not complicated. What separates businesses that consistently get good outcomes from those that consistently overpay is simply the discipline to start early and the process to compare properly.
If you would like support running a competitive re-tender for your next renewal, or want a review of your current contract terms before they expire, get in touch. We manage the process, and you decide.