Participation in EMA’s demand response scheme grows as firms curb peak electricity use

HOW THE PROGRAMME WORKS

Demand response is designed to ease pressure on the power grid and can result in more stable electricity prices, says the EMA.

Firms can sign up via electricity retailers or aggregators. Those who can offer to reduce their power consumption by at least 0.1MW can also join the scheme directly.

Businesses commit in advance how much electricity they can cut during periods of high demand by bidding into the wholesale market.

When prices rise or supply tightens, EMA activates these bids, and participating firms reduce consumption to ease pressure on the grid.

Participants can either adjust operations – for instance, by temporarily switching off non-critical equipment – or rely on alternative power sources such as batteries or back-up generators.

In exchange, they receive incentive payments when activated. These payments can go up to S$4,500 (US$3,500) per megawatt-hour – the ceiling for electricity prices in Singapore’s wholesale market.

Firms will receive no payouts for partial delivery and may face financial penalties if they fall below an 80 per cent compliance threshold – the minimum required level of load reduction. 

They may also face investigation for persistent underperformance and risk suspension after repeated under-delivery.