Southeast Asia’s first e-commerce platform for electricity has launched, making it easier for businesses in Singapore to choose renewable energy to power their operations.
Electrify.sg was set up by two former Sunseap executives and officially launched on July 12.
Based on a consumer’s power consumption habits gleaned from the site’s search filters, Electrify.sg uses a pricing engine to list a range of packages from third-party energy retailers.
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Users can then compare prices and offers, before deciding on the most suitable option. They can also access alternative energy options such as clean energy and carbon offsets.
Singapore began liberalising its energy market in 2001, when commercial and industrial consumers who use more than 2,000 kilowatt hours of electricity per month became eligible for ‘contestability’, the ability to choose who to buy electricity from. By the second half of 2018, the industry will be fully liberalised with 1.3 million Singapore households able to pick their energy provider, which is known as full retail contestability.
Contestable consumers currently have three options to buy power: through customised plans with energy retailers, at the variable wholesale market price for energy, or return to the default SP Services tariff rate if their monthly consumption exceeds 4,000 kilowatt hours.
The options that will become available to domestic consumers next year have not yet been announced.
Before Electrify.sg, companies that wanted to buy from energy retailers besides the default provider, SP Services, had to run extensive online searches and make telephone calls for quotes to assess their options, said Martin Lim, co-founder and chief operations officer at Electrify.sg at a press conference last week. The terms for what each retailer offers are not usually standardised, meaning that customers would find it difficult to make like-for-like comparisons.
By contrast, founders of the start-up say it only takes four steps to search, compare and purchase a new power plan on Electrify.sg.
Sustainable energy is not just a tree-hugging, feel-good thing. It’s a very practical business process.
Martin Lim, co-founder and chief operations officer, Electrify.sg
Lim said businesses can save about 20 per cent of their electricity bills by switching to energy retailers, compared to the SP Services tariff price. Electrify.sg is free for consumers to use, but takes a percentage of the transaction fee for each deal closed.
Beyond what it currently offers, Electrify.sg will this quarter launch PowerQuotes, a function to allow large energy companies to launch a tender quickly, and is looking into offering bundled deals with transport and telecommunications providers.
The two founders also have a long term ambition to take their business to Vietnam, Thailand and Philippines - countries that are opening up their energy markets - as well as big energy markets such as Australia and the United Kingdom, in the coming years.
Clean energy for compliance
An interesting part of the Electrify.sg offering is that it provides consumers with alternative energy options such as clean energy and carbon offsets.
“Sustainable energy is not just a tree-hugging, feel-good thing. It’s a very practical business process,” Lim noted. As the former business development consultant at clean energy provider Sunseap, he saw “a large number” of hotels ask for sustainable energy packages.
“A lot of these hotels sell corporate travel deals to clients in the US or Europe, and they are coming back and asking for sustainability reports. They want to know the vendors they’re buying from are sustainable,” Lim said.
Laurence Kwan, vice president, Sunseap Energy, told Eco-Business that Electrify.sg was another way to reach out to consumers and increase their awareness of more sustainable forms of energy.
Companies are increasingly conscious of their environmental impacts, he noted. “There’s been a pick up in demand for renewable energy since COP 21 [the Paris Agreement on climate change]. American multinational companies are bringing up the idea of the adoption of renewables, and their examples are encouraging others to do the same.”
He added: “As a result, local SMEs [small to medium-sized businesses] are looking at bigger companies and following their lead.”
The search results page on Electrify.sg will eventually offer a filter option for users who want to see only clean energy options, according to Julius Tan, chief executive officer of Electrify.sg.
But for now, it is a custom option on Electrify.sg and interested consumers should contact the team. Retail partners ES Power and iSwitch offer carbon offsets, while clean energy provider Sunseap Group, for instance, started using the platform last week.
Tan commented: “Besides being purely a marketplace or a price discovery platform, we are positioning ourselves to be a thought leader in energy.”
He cited the site’s written features on energy technologies, power generation, renewable energy and blockchain, a technology that the start-up is looking to explore.
Electrify.sg would have a bigger impact in promoting renewables if it allowed consumers to compare options not solely based on price, commented Dr Sanjay Kuttan, programme director of Multi Energy Systems & Grids, Energy Research Institute at Nanyang Technological University in Singapore.
“If the platform goes beyond just price and adds other dimensions such as carbon emissions, or if I’m allowed to take 10 per cent of solar energy in my energy mix and it shows me the optimised price around that, then it would add more value in terms of sustainability,” he told Eco-Business.
At the same time, energy industry veteran Tom McInally, advisor at DNV GL, pointed out that most power generation companies have similar efficiencies and are locked into similar purchase contracts for natural gas - Singapore’s most dominant fuel type, with 95 per cent share of the energy mix - as the ones they inherited after splitting off from what was formerly known as Singapore Power. These contracts remain in place until 2023-2024, which means that electricity prices do not vary much by retailer.
The exceptions being retailers such as Pacific Light and Hyflux, which entered the market after privitisation and have different gas contracts.
“[Electrify.sg] will become more useful as the market becomes more liberated. By 2023-2024, when these gas contracts start to run out, then you’re going to have much more competition,” he said.