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Can someone explain why?

garlic

Alfrescian (Inf)
Asset
More than 80% of electricity in SG is generated by burning natural gas. Then how come when price of oil increase, always increase electricity tariffs?
 

kukubird58

Alfrescian
Loyal
sorry i need to ask a question before attempting to answer.
where u got the info that 80% is generated by gas?
 

ChaoPappyPoodle

Alfrescian
Loyal
It's typical PAPpy scam. When they first announced this eons ago, they said the costs for electricity will be lower. Now when the system is in place, they say that natural gas is pegged to oil. The PAPies have also sold our electricity supply companies to foreign owned companies.
 

Agoraphobic

Alfrescian
Loyal
sorry i need to ask a question before attempting to answer.
where u got the info that 80% is generated by gas?

Actually is more like 70 ~ 75%.

I couldn't copy and paste for some reason (don't ask me about computer, only know simple functions) but if you typed Power Generation in Singapore in your search function, it'll take you to a ppt presentation that says that.

Cheers!
 

Ramseth

Alfrescian (Inf)
Asset
Singapore domestic and business electricity are practically all generated by natural gas works. Go and check out the power plants. Which one burns oil fuel? Oil fuel are only used for vehicles, from cars on the road to ships on the sea to planes in the air.

However, there's a correlation between gas and oil price. The most liquid markets in the world trade oil prices only, not gas. Singapore hedges (or speculates) oil prices on such markets in futures derivatives. The problem is, when futures prices go up, they bill the consumers; when futures prices come down, they pocket the difference.

Another area to look into is, though Singapore has no natural crude oil reserves at all, it's one of of biggest oil refinery and re-exporting centres in the world. The GDP trade figures are expressed in terms of oil-related exports and non-oil exports. The oil-related and -correlated refinery, trading, re-exporting, hedging, speculating etc. are big money big business. Having domestic consumers captive to pricing is game!
 

ponzii

Alfrescian
Loyal
More than 80% of electricity in SG is generated by burning natural gas. Then how come when price of oil increase, always increase electricity tariffs?

Nat Gas is very cheap, demand has nothing to do with oil unless investors buy UNG as an investment -today UNG price $5.80. 60% of oil price increase is due to people buying oil as investment, not demand. USA has flooded the market with severe excess supply of nat gas to make sure price never rise.

I ask this question 2008 never got response. Saying the price is pegged to oil is false.
 

garlic

Alfrescian (Inf)
Asset
sorry i need to ask a question before attempting to answer.
where u got the info that 80% is generated by gas?

"About 80% of Singapore's electricity is currently generated from natural gas as fuel. It is expected that electricity will increasingly be generated from gas-fired, combined-cycle power plants.

Currently, natural gas is imported from Malaysia and Indonesia via pipelines. As Singapore's demand for gas is expected to exceed supply in the near future, it is necessary to import liquefied natural gas (LNG) to meet the growing demand for natural gas."

http://www.ema.gov.sg/page/109/id:49/

And this was before 2006.... So now, you can help in attempting to answer.

Just googled and found out that electricity per KWh in Singapore is more expensive than most US states like California, Washington. We are even more expensive than France, lol........
 
Last edited:

Thick Face Black Heart

Alfrescian (InfP)
Generous Asset
More than 80% of electricity in SG is generated by burning natural gas. Then how come when price of oil increase, always increase electricity tariffs?

It is a con job, plain and simple.

It is TRUE that natural gas is LOOSELY correlated with crude oil prices. People don't know it is a very loose correlation. What Singapore Power has done is to TRICK people into thinking that the correlation is high, when actually it is not.

When oil price go up, they use that as an excuse to raise prices. When oil price comes down, SOMETIMES they will lower prices, but pay attention to the percentage decrease. If you compare to the increase when crude oil was going up, you find that it lags behind a great deal.

Just give you a simple analogy: crude oil goes up $20 per barrel, they raise prices 20%. Crude oil goes down $20 per barrel, they only reduce price 5%. I am not quoting exact figures here. Just telling you what they are doing.
 

Thick Face Black Heart

Alfrescian (InfP)
Generous Asset
The most liquid markets in the world trade oil prices only, not gas. Singapore hedges (or speculates) oil prices on such markets in futures derivatives. The problem is, when futures prices go up, they bill the consumers; when futures prices come down, they pocket the difference.

That's 100% correct, Mr ego.

SG govt's motto is: Heads I win, tails you lose.
 

ivebert

Alfrescian
Loyal
It indeed is.. spot prices for natural gas did not rise this month even....

Please lah!

Did you factor in the infrastructure cost (power plant, lines, software) when you moan about the electric tariffs???? How about storing, shipping and transportation????

Cheebye peasant. If you cannot afford the electricity, sell away your fridge, TV, air con and live on what you can afford.
 

kukubird58

Alfrescian
Loyal
"About 80% of Singapore's electricity is currently generated from natural gas as fuel. It is expected that electricity will increasingly be generated from gas-fired, combined-cycle power plants.

Currently, natural gas is imported from Malaysia and Indonesia via pipelines. As Singapore's demand for gas is expected to exceed supply in the near future, it is necessary to import liquefied natural gas (LNG) to meet the growing demand for natural gas."

http://www.ema.gov.sg/page/109/id:49/

And this was before 2006.... So now, you can help in attempting to answer.

........

thks...i remember there was some published formula in determining the tariff.
whether we agree with it is another thing.
i will try to find it.
 

kukubird58

Alfrescian
Loyal
electricity generation is a complex business...
you have to match supply and demand 24/7.....
If you have been to Oslo, 1 thing that strike me is ALL the office buildings are brightly lighted up; including inside the offices with no one working.
To me it was like a bloody waste of energy...
but i was told there was a min gen capacity and the power has to be consumed somehow....
 

Dreamer1

Alfrescian
Loyal
electricity generation is a complex business...
you have to match supply and demand 24/7.....
If you have been to Oslo, 1 thing that strike me is ALL the office buildings are brightly lighted up; including inside the offices with no one working.
To me it was like a bloody waste of energy...
but i was told there was a min gen capacity and the power has to be consumed somehow....
From the reply of EMA below,it is very clear how EMA BS and tried to con.


10 October 2008, The Straits Times

Billing consumers isn't the only way

THE recent hike in electricity tariff of 21 per cent has resulted in an increase of 48 per cent in 12 months. Singapore becomes the country with the highest electricity prices in the region and charges its consumers more than countries like the United States and France.

The increase is being justified based on the fact that the electricity price index is being linked to the oil price index. The last increase has been based on oil price futures bought at around US$150 (S$220) a barrel. Oil spot prices are now below US$90 a barrel (40 per cent).

Eighty per cent of Singapore's electricity is being produced from natural gas (and not oil) piped in from Malaysia and Indonesia. I assume long-term gas contracts have been negotiated at decent prices protecting the end consumer in Singapore. Why not link electricity pricing to oil futures and not to long-term gas contracts?

Energy production and distribution is a highly regulated environment operating as a monopoly. Regulators have to create a mechanism which gives citizens adequate protection against worldwide oil and gas speculation followed by irrational price hikes. They are not doing enough by simply passing the bill to the consumers.

A combination of economic downturn, high inflation and skyrocketing energy prices may prove too much to swallow for the lower income class. Regulators, producers and distributors have a duty to protect the nation from one of its greatest challenges: Energy dependence. Therefore, we cannot continue to import and burn gas, oil and coal, or depend on others. A master plan to produce energy from sun, water, wind and nuclear power is crucial in safeguarding the nation's independent energy future.

The current subsidies will only have a short-lived effect and will have almost no effect on the reduction of our national energy bill.I am suggesting a combination of tax incentives, rebates and subsidies for households buying energy-saving appliances or making their houses more energy-friendly. It would encourage many of us to replace our energy-hungry washing machines and air-conditioners with other 'green, energy-friendly-certified' appliances.

Landed properties could be turned into energy-producing entities instead of energy consumers. HDB should set the example (even if the monetary side of the investment is not that attractive) to go for highly efficient energy housing. A double impact could be achieved by implementing a consumer pricing, penalising high consumption, but rewarding low-consumption energy savers. Many of our neighbours have already implemented such schemes.

Bruno Serrien

Reply From EMA

IN HIS letter last Friday, 'Billing consumers isn't the only way', Mr Bruno Serrien noted that the electricity tariff has increased by 48 per cent in the past 12 months. But this must be seen in the context of the rising fuel oil price, which has more than doubled during this period.

As Singapore imports all its fuel, we have pegged the tariff to the cost of the fuel, so electricity is priced properly and wasteful consumption is minimised. The increase in the tariff this quarter was necessary because of the 38 per cent spike in the forward fuel oil price from US$83 to US$115 per barrel between April and July this year.

Mr Serrien's claim that Singapore has the 'highest electricity price in the region and charges... more than countries like the US or France' is inaccurate and fails to account for differences in the availability of indigenous fuel and pricing policies across countries. For example, France generates 80 per cent of its electricity from nuclear energy, which is unaffected by the high oil price. On the other hand, Japan relies heavily on imported oil and gas, and charges a higher electricity price than Singapore. Within the US itself, there is a wide variation across the states and some have electricity prices which are comparable to or higher than the rate in Singapore.

Mr Serrien also suggested that Singapore should move towards energy independence. But as a small country, Singapore has limited alternatives to fossil fuels. Hydro, geothermal and wind power are not available here. Nuclear energy raises issues such as safety and disposal of nuclear waste which have to be managed. Solar power has some potential, but realistically this cannot replace more than a small proportion of our energy needs. Solar is also more expensive than electricity generated from natural gas, although the technology is still improving and costs are gradually coming down.

We agree with Mr Serrien that regulators should create mechanisms to protect consumers instead of simply 'passing the bill' to them. This is why the Energy Market Authority has focused on restructuring and liberalising the electricity market, to drive efficiency gains and ensure competitive pricing of electricity. The Government has also set up the Energy Efficiency Programme Office to design and implement energy efficiency programmes across different sectors. Going forward, we will continue to do our part to help households conserve energy and save on their electricity bills.

More EMA's replies to letters in the media:

Put the brakes on electricity price hikes
31 December 2009, My Paper

Tariff increase might lead to repercussions
9 October 2009

Choice of electricity retailers
1 October 2009

Tariff-calculation formula online
29 December 2008, My Paper

Power tariff formula reviewed every 2 years
17 December 2008, TODAY

Doing the power math
10 December 2008, TODAY

Gencos don't make 'extraordinary profits'
9 December 2008, The Straits Times

Energy bill formula still being tweaked
13 November 2008, TODAY

Why HK pays a different price
30 October 2008, TODAY

Fairer comparisons - Japan and Ireland
27 October 2008, The Straits Times

Tariff Revision no benefit to power generation companies
20 October 2008, TODAY

Lower distribution cost moderated tariff increase
16 October 2008, Lianhe Zaobao

Why electricity price hike was needed
10 October 2008, The Straits Times

Lower Electricity Tariff if Price of Oil Continues to Fall
7 October 2008, My Paper

Price electricity properly and give focused help
7 October 2008, My Paper

Towards a more liberal electric mart
7 October 2008, My Paper

Quarterly tariff update accounts for time lag
2 October 2008, My Paper

Higher electricity prices will not adversely affect lower-income families
1 October 2008, Lianhe Zaobao

EMA explains spike
1 October 2008, The Straits Times
 

Dreamer1

Alfrescian
Loyal
27 October 2008, The Straits Times

Electricity tariff 82% higher here than in Hong Kong

THE recent jump in the electricity tariff has left many wondering what was the rationale. Is the oil price the only culprit? Fuel is not the only component cost of electricity. Buildings and infrastructure, plant and machinery depreciation, maintenance, insurance, manpower, distribution grid and management costs are substantial expenditure in the total production of electricity.

Forum writers have pointed out that Singapore's electricity is more expensive than in the United States and France. Some ask for transparency, while others wish the price to remain, in view of the economic downturn. The authority does not seem willing to help. Should we cut household electricity usage back to 1970s level?

Everyone should save electricity, but there is a limit, unless we curtail our lifestyle to the extreme. More development, population growth and a higher standard of living increase electricity demand. Is it helpful to punish existing consumers who try their best to save?

Let us examine Singapore's 'twin city' of Hong Kong with a similar vibrant lifestyle and standard of living, and try to understand if Singaporeans, for all their hard work, enjoy the same public utility in good times or bad times. Like Singapore, Hong Kong imports all its fuel and pays similar volatile fuel prices. Hong Kong does not enjoy the advantages of piped natural gas. Neither has nuclear power and both operate on the same business model - free market pricing.

I don't know how Hong Kong pegs its electricity tariff, but I am sure power generation companies know the production costs of electricity to work out competitive tariff rates to consumers. Unless Hong Kong gets very cheap oil, there is no reason why its tariff is so much lower.

However, people in Hong Kong pay an electricity tariff at 88 Hong Kong cents (17 Singapore cents) per unit. Why should Singaporeans pay 31 cents per unit - a whopping 82 per cent higher?

Paul Chan

Reply From EMA

IN HIS letter on Monday, 'Electricity Prices: 82% higher here than in Hong Kong', Mr Paul Chan asks why Singapore has a higher electricity tariff than Hong Kong, when both places depend on imported fossil fuels and do not subsidise electricity.

Electricity is more expensive in Singapore because our fuel cost is much higher compared to Hong Kong. In particular, fuel charges account for 19 cents per kilowatt-hour of the overall tariff in Singapore, but just 5 cents per kilowatt-hour in Hong Kong.

Hong Kong enjoys this significant cost advantage in fuel largely because more than half of its electricity is generated from coal-fired power plants. Coal is cheaper than oil and natural gas, but it is also a dirtier fuel. Hence, the price of this heavy reliance on coal is felt in the impact on air pollution and quality of life. Another 10 per cent of Hong Kong's electricity comes from nuclear power plants in China which are unaffected by the high global oil price.

In contrast, Singapore's electricity is generated predominantly using imported natural gas, which is indexed to the fuel oil price by commercial contracts. We also do not have a ready source of low-cost energy supplies from our neighbours.

Any comparison of electricity prices across jurisdictions will have to take into account these variations in fuel mix and supply. In fact, our electricity tariff is lower than or comparable to that of countries such as Ireland and Japan, which, like Singapore, are highly dependent on imported oil and natural gas to meet their electricity needs.


More EMA's replies to letters in the media:

Put the brakes on electricity price hikes
31 December 2009, My Paper

Tariff increase might lead to repercussions
9 October 2009

Choice of electricity retailers
1 October 2009

Tariff-calculation formula online
29 December 2008, My Paper

Power tariff formula reviewed every 2 years
17 December 2008, TODAY

Doing the power math
10 December 2008, TODAY

Gencos don't make 'extraordinary profits'
9 December 2008, The Straits Times

Energy bill formula still being tweaked
13 November 2008, TODAY

Why HK pays a different price
30 October 2008, TODAY

Fairer comparisons - Japan and Ireland
27 October 2008, The Straits Times

Tariff Revision no benefit to power generation companies
20 October 2008, TODAY

Lower distribution cost moderated tariff increase
16 October 2008, Lianhe Zaobao

Why electricity price hike was needed
10 October 2008, The Straits Times

Lower Electricity Tariff if Price of Oil Continues to Fall
7 October 2008, My Paper

Price electricity properly and give focused help
7 October 2008, My Paper

Towards a more liberal electric mart
7 October 2008, My Paper

Quarterly tariff update accounts for time lag
2 October 2008, My Paper

Higher electricity prices will not adversely affect lower-income families
1 October 2008, Lianhe Zaobao

EMA explains spike
1 October 2008, The Straits Times
 

red amoeba

Alfrescian (Inf)
Asset
Since there is no market for trading natural gas - they conveniently use crude oil prices as proxy...which is really - KNN, rip-off.

Sorry but the cost of infrastructure and stuff - isn't all the cables laid donkey years ago? The wires in my HDB is so old and falling off - I don't see any "increase" in costs of maintenance when there is none. We have a fucking long pipe from indon (matuna fields??) to Singapore, so literally minimal cost of transportation?

What we don't know is the multiplying factor they use to correlate prices of crude oil to natural gas. Ok, price of natural gas rise in tandem with crude oil but at what rate? This is never told.

Also, Singapore like to number 1 in many things - so why not start a natural gas trading market like oil? Large consumers like Japan will be keen to participate.

Honestly, they are selling away power stations to foreign owners telling us that they will be run more efficiently - my foot, why do we still see tariffs increasing? What is the rationale?

And I thought one station is purchased by a Chinese company who is going to produce electricity by coal? Does this not help alleviate the rising oil price, and subsequently the tarriffs?

What is the Minister of Environment doing about rising prices? Shrug your shoulders and say, what to do?
 

kukubird58

Alfrescian
Loyal
point is Papee has formula to peg almost everything.....enegry cost, bus & MRT fare, ministar salary, etc...
we can of course disagree with the basis....
hahaha.....why not let your finger do the talking....
simply marked "tick" on the correct place at the next erection.....
 
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