Electricity bills up 21%

[blazer_workz]

If the price is going the other way, you would love to pay for the certainty. But you can't possibly want it your way when you have the advantage.

Agreed that it does not make it right for energy providers to charge more. Therefore as I mentioned, that is to be taxed by the government to prevent higher consumption.

It is the same for education. Consumption of education is good. Lower prices lead to higher consumption. Therefore govt and not the education providers should subsidies.

SP Services is not charging more. They "buy" and pass through. Simple stuff.

I still don't understand why oil price is use here?
At least 60% of the electricity generated runs on gas fired generators.
Have indonesia or malaysia adjusted their prices of gas lately?

 

[Silence Sky]

It doesn't need to be spot on. It is just that you must be willing to pay for certainty. I doubt many will complain when you hedge at $50 and the spot price is $100.

Main aim of privatizing is to gain efficiency. Electricity consumption does not have positive externalities unlike say education so why subsidise?

If it is cheap ppl will just use more than the optimal.

As an economist, if i have my way i would have a conservation tax on electricity. The negative externalities of electricity is unlikely to be reflected by it price yet.

Hi Foreverlovex:

We have joined this forum for sometime now.
We have had a few discussions on the privatization of state run companies.
History and experience has proved to us that is not working in our Singapore Economy.

1) They try to create two broadcasting company - Failed.
2) They try to create two Rails operators - End result is fare hike.

We are just trying to create a false sense of free economy. Let's face it, MIW just don't want to sudsidise you and do not want to play the bad guy. So when there is fare hike, they will say it purely business decision since it is privatised and it not MIW's problem anymore.
But look who’s still controlling the Telecommunication after they liberalised the telco sector.

 

[Silence Sky]

Most of the hedging tools are non-delivery types. I.e. Mostly financial settlements type.

Yes, I agree.

 

[sORe-EyEz]

If the price is going the other way, you would love to pay for the certainty. But you can't possibly want it your way when you have the advantage.

It is the same for education. Consumption of education is good. Lower prices lead to higher consumption. Therefore govt and not the education providers should subsidies.

SP Services is not charging more. They "buy" and pass through. Simple stuff.

so you agree the big boys have the advantage? & certainly they like it this way...

hmmm... should leave education out of the thread. even if i really dun agree about how its quantified as consumption based. the supply has not kept up with demand... keke, OT liao... :sweat:

 

[foreverlovex]

I still don't understand why oil price is use here?
At least 60% of the electricity generated runs on gas fired generators.
Have indonesia or malaysia adjusted their prices of gas lately?

This is a good question.

Global gas price is linked to oil price movement. This is same for every commodity that can be a good substitute to oil (e.g. coal). You may look at Henry Hub gas prices and compare it with oil price movement over time. As a small country with no resources we can't delink from the market. If we don't pay market price, we don't have our oil and gas and hence electricity.

There is a global market for gas prices and generally, gas contracts are linked to oil price movement. Our neighbours are not stupid.

 

[xtemujin]

The problem here is that there is no alternative for HDB dwellers to get off the grid and use solar power.

There's no real push here in Singapore for alternative power source like solar and wind.

 

[foreverlovex]

Hi Foreverlovex:

We have joined this forum for sometime now.
We have had a few discussions on the privatization of state run companies.
History and experience has proved to us that is not working in our Singapore Economy.

1) They try to create two broadcasting company - Failed.
2) They try to create two Rails operators - End result is fare hike.

We are just trying to create a false sense of free economy. Let's face it, MIW just don't want to sudsidise you and do not want to play the bad guy. So when there is fare hike, they will say it purely business decision since it is privatised and it not MIW's problem anymore.
But look who’s still controlling the Telecommunication after they liberalised the telco sector.

For 1&2.....don't know what the govt wants to do. Plain Stupid.

Telecommunication may still have a chance in the future if they let an independent party to own the backbone of communication.

I not really for subsidies, especially when there is no positive externalities to it.

 

[foreverlovex]

The problem here is that there is no alternative for HDB dwellers to get off the grid and use solar power.

There's no real push here in Singapore for alternative power source like solar and wind.

Solar power maybe too expensive for most Singaporeans. If we get off the grid we still need to have expensive batteries to backup the solar power. Given the price of solar panels.....you need around 15yrs +- to break even.

fuel cell may be more likely?!?!

 

[sORe-EyEz]

well,.... privatising the energy market is a success! lol....

 

[sORe-EyEz]

Solar power maybe too expensive for most Singaporeans. If we get off the grid we still need to have expensive batteries to backup the solar power. Given the price of solar panels.....you need around 15yrs +- to break even.

fuel cell may be more likely?!?!

in Sg, wad can be too expensive? Newater was not done on the cheap. as long as there is capital for the R&D of the technology, prices will go down. with time, improvements will yield more efficient solar panels & batteries with batter capacity & lifespan. if batteries are soo expensive why do i still see digital cams & cells phones being rolled up without a hitch? when demand catches on with the prices falling inversely, the number of years needed to break even may be much shorter...

 

[foreverlovex]

well,.... privatising the energy market is a success! lol....

i generally agree with your statement.

Just an example, if govt still runs the show, gencos would not be using gas to generate electricity and would still be using oil. This is becoz of the huge capital layout to write off the steam plants which use oil.

Gas is cleaner and a more efficient fuel. This is impt given that 60% of the electricity cost is fuel cost.

 

[sORe-EyEz]

i generally agree with your statement.

Just an example, if govt still runs the show, gencos would not be using gas to generate electricity and would still be using oil. This is becoz of the huge capital layout to write off the steam plants which use oil.

Gas is cleaner and a more efficient fuel. This is impt given that 60% of the electricity cost is fuel cost.

our gahmen no capital?

 

[foreverlovex]

in Sg, wad can be too expensive? Newater was not done on the cheap. as long as there is capital for the R&D of the technology, prices will go down. with time, improvements will yield more efficient solar panels & batteries with batter capacity & lifespan. if batteries are soo expensive why do i still see digital cams & cells phones being rolled up without a hitch? when demand catches on with the prices falling inversely, the number of years needed to break even may be much shorter...

Er........the batteries are not those in digital cams or cells phones. A more appropriate example would be electric powered cars which run on battery.

The problem is there is still a long way to go before demand catches. High electricity prices and oil prices, may provide the drive for demand to catch up faster.

 

[foreverlovex]

our gahmen no capital?

yup. how to make sense to write off billions of dollars when it is supposed to be depreciated over 15 yrs or more.

 

[Silence Sky]

How about the other scenario.

Let's say you hedge at $55/barrel three months ago.
Today you buy oil at the spot rate $100/barrel. Do I charge you $55 or $100? In this case, SP Services has to "eat" the $45 bucks price difference.

From a consumer point of view, you are unlikely to notice when SP Services "takes" the hit.

Given the scenario, I will let my call option expire if the strike price is less than $100 and buy at the spot rate $55. But that does not mean I have lost $45, what I have lost is the premium I pay for the call option which is much less than $45.

They have hedged the oil at S$155, I think is it fair as major airlines have also hedged at that price range.

How about we try to take a look at figures in my way of thought:

Year 2003 – Oil USD$ 23.35/barrel – 15.85 cents/kwh.
Year 2007 – Oil USD$ 75/barrel – 21.38 cents/kwh.

Since every business has their own base line for manufacturing cost, I will try to estimate the electricity tariff at Oil USD$100/barrel using the above figures. A 5 years spread will give a more accurate estimation.

From calculation: Every 1$ increase in oil price, will lead to a 0.107 cents increase in the electricity tariff.

By interpolation:
An increase of $25 in Oil price, we should see a 2.675 cents increase in the tariff.
Therefore at USD$100/ barrel, it should cost 24.055 cents/kwh. :think:

 

[Leong23]

Think i had to start to charge my handphone, ipod and all my camera / flash battery in the office............

 

[TheQuestion]

Solar power maybe too expensive for most Singaporeans. If we get off the grid we still need to have expensive batteries to backup the solar power. Given the price of solar panels.....you need around 15yrs +- to break even.

fuel cell may be more likely?!?!

Initial installment will cost a bit but it pays for itself over a long period seeing as how the panels are long lasting and require little maintenance. somemore they can just install on all the hdb rooftops on top of the water tanks... near my block there's a windmill installed on one of the other blocks and i'm sure we can do that too if there;s a REAL push for it...

 

[foreverlovex]

Initial installment will cost a bit but it pays for itself over a long period seeing as how the panels are long lasting and require little maintenance. somemore they can just install on all the hdb rooftops on top of the water tanks... near my block there's a windmill installed on one of the other blocks and i'm sure we can do that too if there;s a REAL push for it...

Over time the conversion efficiency will drop due to wear and tear on the panel surface.

The main maintenance cost would be when it is time to change the inverter.

 

[TheQuestion]

Over time the conversion efficiency will drop due to wear and tear on the panel surface.

The main maintenance cost would be when it is time to change the inverter.

same arguement can be made for conventional power generator as well.

 

[hazmee]

Shareholders of Singapore Power wants to have a raise on their profits as well. LOL!! Onward Singapore!