How much profits in total are made from providing electricity to Singaporeans?

I refer to the article “Electricity tariffs to increase by average of 2.8% from April to June” (Straits Times, Mar 29).

It states that “Electricity tariffs will increase by an average of 2.8 per cent per kilowatt hour (kwh) from April to June, said SP Group.

The increase is mainly due to the higher energy cost of producing electricity, said SP Group in a statement on Thursday (March 29).

In its statement, SP Group said it reviews the tariffs quarterly based on guidelines set by the Energy Market Authority, and that the tariffs have been approved by the electricity industry regulator.”

According to the Energy Market Energy’s (EMA) annual report – its surplus before contribution to the Government Consolidated Fund (GCF) was $2.8 million for the year ended 31 March 2017.

There are at least nine power generation companies.

The profits of just one of them – YTL PowerSeraya (the third largest power generator with 17.7 per cent of the market share in 2016) which is a wholly owned subsidiary of YTL Sdn Bhd – was $41 million for FY2016/2917.

So, how much are the profits of all the power generation companies? – About $230 million ($41 million divided by 17.7 per cent)?

In this connection, YTL PowerSeraya was one the three power generation companies that were sold to foreign entities by Temasek Holdings.

According to Singapore Power’s annual report 2016/2017 – its profit for the year ended 31 March 2017 was $948.8 million, an increase of 2.7 per cent over the previous year’s $923.5 million.

Singapore PowerAssets’ profit was $433.6 million.

So, in totality – how much profits are being made from providing electricity to the people? – About $1.6 billion (EMA $2.8 million + Power generators $230 million + Singapore Power $949 million _ Singapore PowerAssets $434 million)?

Leong Sze Hian

 

 

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13 Responses to “How much profits in total are made from providing electricity to Singaporeans?”

  • Not so smart after all:

    PAP privatized public transport and utilities to make them run more efficiently. It is now clear this was a WRONG assumption. The Government had to re-nationalize public transport and inject billions into the public transport system. Electricity tariffs are much high than it has to be because the private sector power generating companies have to pay dividends to their shareholders.

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  • Samuel S:

    SP is mere a middle man in providing electricity and water to all private and commercial users yet she is allowed to profiteer. This can be proven if one opts for private electricity suppliers, their electricity bill will be lower. Why our government allows this arrangement?

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  • give us intelligent rationale:

    Lee Hsien Loong, or Goh Chok Tong, whoever made that daft decision to privatize electricity supply, can you give us an intelligent justification or rationale for having a national monopoly on such an essential item in the hands of private owners to have guaranteed profits, and for them to hold us at ransom for their inefficiency (as all monopolies, without competition to compel them to, inherently are)?

    Or are you going to conveniently remain silent, again?

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  • LIONS:

    What about NTUC FAIRPRICE’S PROFIT MARGIN$?
    BILLION$$$$?
    SUCK POOR MAN’S MONEY.

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  • give us intelligent rationale:

    give us intelligent rationale:
    Lee Hsien Loong, or Goh Chok Tong, whoever made that daft decision to privatize electricity supply, can you give us an intelligent justification or rationale for having a national monopoly on such an essential item in the hands of private owners to have guaranteed profits, and for them to hold us at ransom for their inefficiency (as all monopolies, without competition to compel them to, inherently are)?

    Or are you going to conveniently remain silent, again?

    ditto for our MRT.

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  • Singapore Fooled Again N Again:

    The recently opening of Jurong area for residential households to buy electricity from nearly 20 or so private providers other than SP Group can save consumers up to 25% in bills. Commercial and industrial already benefited from the saving for a few years.

    This up to 25% is a low of profit margin for essential service to the public, beside those point sraised by Mr Leong

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  • Good Money Made by SP!:

    But the monopoly is no more!

    More Energy Suppliers will mean consumers can go for cheaper electricity soon!

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  • INDIAN malay INDIAN president:

    this once great small island nation of Singapore is failing. badly.

    like all dynasties, they die sooner or later. as soon as they take their luxuries like their birth rights come what may.

    so as soon as pap started paying S$m to its clan members, the failing began. made worse by a useless clown surrounding himself with yes men yes women whose sole interest is to make clown happy so as to continue enjoying the pap S$m.

    we say this. as soon as pap starts to pay each other median wage, Singapore has a chance to be great again. 1st, the unsavory opportunists from other lands such as cherry and cow will quit. 2nd, the money faced kind like disgracefoo who needed S$m to maintain their standard of living will quit.

    BUT for pap to cut wage of each other is like trying to change a pig into a cow. it isn’t going to happen.

    so the only fast and quick way is for New Government to form by a better group of local born Singaporeans. there is no other way.

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  • 69.9% are the Stupid Ones!:

    Till today, they still do not know what is happening!

    Even late L*Y got ‘played out’, not to mention ordinary Singaporeans!

    Hope they will not continue their stupidity into the next GE!

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  • Rabble-rouser:

    Ha-ha-ha-ha! Uncle Leong’s article is like the parable of 6 blind man feeling an elephant. Click on the link to read & understand:
    Link: https://www.allaboutphilosophy.org/blind-men-and-the-elephant.htm
    An average man has a limited perspective of the objective truth. The simple reason is that our sensory perceptions and life experiences can lead to limited access and overreaching misinterpretations. But that doesn’t mean objective truth isn’t there. In fact, truth isn’t relative at all… It’s there to discover in all its totality.
    POWER SUPPLY MARKET DISTORTIONS
    Back to Uncle Leong’s article! SP Group’s huge profitability is the result of severe Power Generation & Retail supply market distortion concocted by the PAP govt. The truth is that there is a severe supply overcapacity for Power Generators (Foreign owned entities) in S’pore. But SP Group controls 100% of the retail supply sector to consumers. Read below for clarification.
    MARKET DISCRIMINATORY PRACTICES
    You see, the power generation & energy supply market regulated by the Energy Market Authority (EMA) is segmented into basically 2 segments; the Non-Contestable Consumers (100% retail customers & small businesses) & Contestable Consumer (usually Industrial & wholesale consumers). A clearer definition:
    * Currently, any commercial or industrial consumer with an average monthly electricity consumption of at least 2,000 kWh is eligible to become contestable.
    * Everyone else, 1.3 million small consumers, mainly households and small businesses, buys electricity at a regulated tariff (the Non-Contestable Consumers).
    THE GENESIS FOR CONSUMERS PAYING MORE
    Before the completion of Singapore’s first liquefied natural gas (LNG) terminal in 2013, the city’s only option was to import natural gas via pipelines from Malaysia and Indonesia. Once, the LNG Terminal was completed & operational, S’pore terminated it’s natural gas supply contracts with M’sia & Indonesia & shut off the pipelines.
    S’pore’s move to expand its LNG capacity to 11 million metric tonnes a year (mt/year) by 2018 and give international players access to storage and reload services.
    Link: https://www.channelnewsasia.com/news/commentary/commentary-singapore-s-rising-natural-gas-ambitions-face-big-9871780
    POWER GENERATION OVERCAPACITY
    With the commissioning of Singapore’s LNG Terminal in 2013, also a number of newly developed power plants entered operation. During the period 2012-2014 more than 3,000 MW additional capacity was added to the electricity supply pool.
    - Cont’d -

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  • NotMyProblem:

    Privatise public essential services by the Government is to make lives easy for the Government. Government is passing all responsibility to private companies and the Government washes its hand and collect money. Private companies want to make money, the more the merrier, so who suffers?

    This PAP Government is one lazy government!!!

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  • Rabble-rouser:

    - Cont’d -
    STATE-MANDATED INVESTMENTS & MARKET PRICE DISTORTIONS
    To support the investment decision of the LNG terminal, the Energy Market Authority (EMA) introduced:
    * eliminate piped natural gas imports (from M’sia & Indonesia) to allow the build-up of LNG demand to provide clear signals to LNG terminal investors that there will be demand for LNG, and
    * the LNG Vesting Scheme upon completion of the LNG Terminal in 2013 for a period of 10 years. The Vesting Scheme for Gencos are to allow them (as capital investors) to reap their investment payback & a given rate of return on investment.
    But the oil-price collapsed in mid-2014 threw a spanner into the formula – it threw the Vesting Scheme into an investors nightmare. The shift in the market price of feedstock [LOWER GAS PRICE, LARGE CONSUMER RESISTANCE) & the oversupply of onstream power [DEMAND & SUPPLY CURVE SHIFT] created a situation that no longer recovers more than the variable costs of electricity production, mainly the costs of fuel. This MARKET PRICE is too low for the Gencos to operate profitably and it eliminates any return on the long term investments made and provides no reimbursement for other fixed costs.
    The enlargement of the power supply pool has resulted in a sharp drop of the market price of electricity compared to the Vesting Price. (read POWER GENERATION OVERCAPACITY). The result is that consumers pay the Gencos as the market price has structurally dropped below the Vesting Price. In the last 4 years, consumers paid a staggering SG$ 2.7 billion (more than SG$ 515.00 on average per annum per household or small business) extra to the Gencos as a result of the Vesting Contracts and the LNG Vesting Scheme.
    CONSUMERS PAY FOR THE INVESTMENT DECISION
    The Vesting Contracts (for Investment Cost Recovery) are firstly allocated to Non-Contestable Consumers (retail customers & small businesses). Only when the Vesting Contracts are bigger in volume than the total Non-Contestable Consumers electricity usage, the remainder is allocated proportionally to the Contestable Consumers. It has turned out that since 2013 the allocation to Contestable Consumers has been rapidly reduced from 40% of the total Vesting Contract Allocation to almost nil. That is, retail consumers & small businesses pay 100% for the Corporate’s investment decision influenced by Govt mandated investments!
    - Cont’d -

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  • Rabble-rouser:

    - Cont’d –
    CONSUMERS PAYS IT ALL!
    The burden of the Vesting Contracts is now almost completely carried by the Non-Contestable Consumers, ie. the 1.3 million small consumers, mainly households and small businesses. And, as the add-on premium for LNG Vesting Scheme is also incorporated in the Vesting Contracts payments, even the LNG premium add-on is solely carried by them.
    Read Link for greater understanding [WARNING: NOT EASY TO UNDERSTAND WITHOUT SOME LEVEL OF FINANCIAL EXPERTISE]:
    http://singaporepowerdesk.com/vesting-contracts-made-singapore-consumers-pay-2-7-billion-sgd-last-4-years
    On top of the Vesting Contract payments [combined Vesting Contracts & LNG Vesting Schmeme], Singaporean consumers also paid a premium for electricity [Govt wealth transfer & market price vulnerability] which is produced using LNG. And the cost of LNG has been more than cost of conventional pipeline gas [very poor govt decision making]. Over the last 4 years, the add-on cost attributable to this higher fuel cost is an estimated SGD 290 million.
    CONSUMERS PAYS FOR PAP’S FARKED-UPS
    And 1.3 million small consumers, mainly households and small businesses, buys electricity at a regulated tariff (the Non-Contestable Consumers). The regulated tariff is set by the govt for the benefit of all others (Gencos, investors, capital providers, etc) AT THE EXPENSE OF THE PUBLIC RE: CONSUMERS. Voters get the govt that they deserved! LOL!

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