Households in Singapore will soon be able to purchase electricity plans that work like telco data plans, and are carbon-neutral to boot.
This means that they will pay a flat fee for their electricity use as long as the amount is below a specified threshold, and the greenhouse gas emissions from that use will be offset by carbon credits so that there is a net-zero impact on the environment.
ES Power is the environment-focused energy division of resource recovery company Environmental Solutions (Asia). ES Power plans to offer such plans to households from November 2018 after Singapore starts to fully liberalise its electricity market.
Currently, in the city-state, only consumers that use more than 2,000 kilowatt-hour (kWh) of electricity per month have the freedom to purchase electricity from the retailer of their choice.
About 90,000 commercial and industrial users who make up about 80 per cent of the country’s electricity demand are eligible. All other customers, including 1.4 million households and small businesses, have to buy electricity from the national utility SP Group at a regulated tariff.
Singapore’s Energy Market Authority, however, plans to give all electricity users in the country the same freedom from 1 November 2018, by zones, ending with full liberalisation by May 2019.
Going green to stand out
Experts have predicted that the liberalisation of the electricity market will result in intense competition not just among established power companies but also start-ups eager to capitalise on the much larger consumer pool. Already, the number of electricity retailers in Singapore has surged from just seven in 2013 to 27 now.
Dr Sanjay Kuttan, programme director of Nanyang Technological University’s (NTU) Energy Research Institute @ NTU, notes that going green is a good way for energy firms to stand out from the crowd.
“Most of the existing power generation companies have retail arms and can tie up demand from their customers now. Smaller or new energy firms will need to be innovative and balance lower prices as well as the supply of additional goods and services to appeal to these customers,” he says.
We think that people do want to be green if they are given the option.
Sivakumar Avadiar, co-founder, ES Power
“Taking the green route is a good way for electricity firms to differentiate themselves. They could offer plans that make use of solar power or carbon credits, for example, or offer access to charging points for electric vehicles,” he adds.
ES Power is betting that its carbon-neutral, telco-like power plans will be a hit with increasingly environmentally-conscious consumers, especially because these also offer cheaper electricity. This is in addition to the other standard plans ES Power intends to offer.
Sivakumar Avadiar, the firm’s co-founder and executive director, says that households would pay about 10 to 25 per cent less for the same amount of electricity that they use now.
To nudge families to use less energy and thus save more money, the plans’ electricity usage limits will be set at levels that are slightly lower than average household usage figures.
Sivakumar gives this example: “If five room-flats use about 500 kWh a month each on average, we would set our limit for that type of household at 450 kWh a month. You would pay more than the fixed fee if you exceed the limit, but I think that when people know there’s a limit, they tend to not want to bust it.” Households will be able to check their electricity use online.
Families who sign up for the plans will also be helping the planet because part of the electricity that they use will come from renewable energy sources in Singapore, while greenhouse gas emissions from the rest will be offset through carbon credits purchased from the Verified Carbon Standard programme, which is the world’s largest voluntary carbon credit market.
The programme allows vetted projects that reduce greenhouse gas emissions to turn those reductions into tradable carbon credits. It then sells those credits to organisations that want to offset their own greenhouse gas emissions.
So far, the programme has registered more than 1,300 projects worldwide that have reduced or removed greenhouse gas emissions equivalent to more than 185 million tonnes of carbon dioxide.
“We are, at our core, a green company, and we think that people do want to be green if they are given the option,” says Sivakumar. “Now, we are saying with these plans, not only can you save money, you can do your part for the environment too.”
Extending a helping hand
Beyond helping the environment, ES Power plans to ramp up its philanthropy efforts in Singapore.
Currently, the firm sells electricity at a reduced rate to social enterprises and charities such as the Animal Concerns Research and Education Society, Waterways Watch Society and Jamiyah Singapore.
It also lists the organisations’ average electricity bills on its website and enables people to donate money towards their bills.
“We sell electricity to them at the lowest possible price that we can give just to keep things going. It’s basically the cost price plus a bit to cover the admin fees,” says Quek Leng Chuang, ES Power’s other co-founder and executive director.
He adds: “What we want to do when the market opens fully is see how we can work with these social enterprises to help power up low-income homes. The idea is also that when you go to our website in the future, if you click on the listed social enterprises, you’ll be able to see that they are helping, say, 100 homes and be able to contribute money towards those homes’ electricity bills.”
The company plans to start with a group of about 60 to 70 low-income homes after the electricity market liberalisation. “We will launch a pilot to see how that goes so that we can build a better, more robust model to reach out to a thousand such homes in Singapore,” says Quek.
He summarises: “Apart from being an environmentally-conscious company, our broader social mission aligns with four Sustainable Development Goals—no poverty, affordable and clean energy, reduced inequalities, and climate action. It’s in our interest to see how we can help to reduce social inequality through the medium of electricity, and help people to spread their generosity through green electricity.”
To learn more about ES Power, visit ESpower.com.sg. From November 1 2018, Eco-Business readers are entitled to up to 1.2% savings off electricity bills when signing up for 100% carbon neutral electricity by using the promo code ECOBIZ upon check out.
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