What is the Open Electricity Market?
Singapore's electricity market was fully liberalised in May 2019 when the Energy Market Authority (EMA) completed the nationwide rollout of the Open Electricity Market (OEM). Since then, every household and business in Singapore, regardless of size, has had the right to choose its own electricity retailer, rather than being tied to the regulated tariff set by SP Group.
For commercial and industrial businesses, this is one of the most significant cost levers available. Electricity is typically one of the top three operating expenses for manufacturing, hospitality, retail, and property management businesses. The freedom to negotiate rates, choose contract structures, and switch providers gives informed businesses a meaningful advantage over those who simply accept the default tariff.
Yet many businesses, particularly those without a dedicated energy procurement function, are still on regulated tariffs, still auto-renewing with the same retailer, or still making decisions based on incomplete market information. This guide is intended to change that.
How the market works
Singapore operates a pool-based electricity market managed by the Energy Market Company (EMC) under EMA oversight. Generators (power plants owned by companies like Keppel, Senoko Energy, and YTL PowerSeraya) sell electricity into the wholesale pool at a price that reflects real-time supply and demand. This price is called the Uniform Singapore Energy Price (USEP) and it changes every half hour.
Retailers sit between the wholesale pool and end consumers. They buy electricity from the pool (plus transmission and network charges from SP PowerGrid), package it with a margin, and sell it to businesses and households at a contracted rate. There are currently seven licensed retailers in Singapore, each competing for customers with different pricing structures and contract terms.
As a business, you never transact with the wholesale pool directly, unless you are a very large consumer with a contestable account. Instead, you engage one of these retailers, agree on a contract, and pay the rate stipulated in that contract for its duration.
Your three main contract options
1. Fixed-price contracts
A fixed-price contract locks in your electricity rate for the entire contract term, typically between six months and three years. You pay the same rate per kilowatt-hour regardless of how the wholesale market moves. This gives you complete price certainty and makes budgeting straightforward.
Fixed-price contracts are most valuable when wholesale prices are low and likely to rise, or when your business prioritises cost predictability over cost minimisation. They carry the risk of paying above market if wholesale prices fall significantly during your contract term, but they protect you entirely from price spikes.
2. Discount off tariff (DOT)
A discount off tariff contract sets your electricity rate as a fixed percentage discount below SP Group's regulated tariff. As the regulated tariff changes each quarter, adjusted by EMA to reflect wholesale market movements, your rate moves with it, but always at the agreed discount.
DOT contracts offer a simple, transparent structure with built-in market tracking. They are often a good default for businesses that want competitive pricing without taking on the risk of a fully fixed rate. The main limitation is that your effective price is determined partly by EMA's quarterly adjustment, which lags real-time market conditions.
3. Wholesale / indexed contracts
Wholesale or indexed contracts price your electricity directly against the half-hourly USEP, plus a fixed retailer margin. Your bill reflects actual market prices, meaning you benefit fully when prices are low, but are exposed to spikes during periods of high demand or supply constraints.
These contracts suit businesses with in-house energy management capability, flexibility to shift load during peak periods, or a high appetite for short-term price volatility in exchange for long-run savings. They are not recommended for businesses without the systems or expertise to monitor and respond to market conditions.
Fixed = certainty. DOT = simplicity. Wholesale = lowest potential cost, highest risk. The right choice depends on your consumption pattern, risk tolerance, and internal capability.
How to choose the right retailer
With seven licensed retailers competing for your business, the choice can feel overwhelming. Here is what actually matters:
Market coverage in your tender
The most important factor is not which retailer you choose, it is how many retailers you compare before choosing. A business that receives quotes from two retailers and picks the cheaper one is not making a well-informed decision. A business that tenders across the full market and compares all seven offers on standardised terms is.
The seven licensed retailers to include in a tender are Keppel Electric, Sembcorp Power, Senoko Energy, Geneco (YTL PowerSeraya), Tuas Power, Pacific Light Energy, and Flo Energy. Each has different strengths depending on your load profile, contract length preference, and usage pattern.
Contract terms, not just price
A lower headline rate can easily be offset by unfavourable contract terms. Pay attention to:
- Termination penalties: some contracts impose costs equivalent to remaining contract value if you exit early
- Auto-renewal clauses: missing a narrow notice window can lock you into a new term at rates you never agreed to
- Carbon tax pass-through: how the rising carbon tax is allocated varies significantly between contracts
- Capacity charge provisions: network and capacity charges are passed through differently by different retailers
Service quality and renewal support
Your relationship with a retailer does not end at signing. The best retailers provide proactive account management, alert you well ahead of contract expiry, and make the renewal or re-tender process straightforward. Retailers that go silent after signing are a red flag, you want a partner who tracks your contract lifecycle, not just your payment schedule.
The biggest mistake: letting your contract lapse
When an electricity contract expires without a new agreement in place, your account defaults to SP Group's regulated tariff. This tariff is reset quarterly and is almost always higher than what you would pay under a competitively tendered retail contract. In a rising market, the gap can be significant.
The optimal window for re-tendering is three to six months before your current contract expires. This gives you enough time to run a proper tender, compare offers without urgency, and make a considered decision. Businesses that wait until the last month often end up accepting the first reasonable offer rather than the best one.
Every business in Singapore has access to the same market. The difference in what they pay for electricity comes down almost entirely to how well they manage the procurement process.
Next steps
If you are unsure which contract structure suits your business, or you want to understand how your current rate compares to the market, a bill audit is the best starting point. It takes no more than thirty minutes to review your current arrangement and identify whether there is meaningful savings available.
You may also find it useful to read our guides on choosing an energy broker and fixed versus indexed contract structures before your next renewal conversation.