We all use electricity for domestic and industrial needs. Today, electricity become a necessity for living. Every appliance and machine is run with the help of it. Electricity made our life simpler and more convenient. Let’s understand how the electricity tariff singapore works.
What is an electricity tariff?
A tariff is a procedure of charging for consuming electric power. The tariff is the sum of all the costs of producing and supplying electric energy with some reasonable cost. The charge that consumers pay depends upon the consumption of electric energy, and vary person to person. The industrial tariff consumes more energy than the domestic tariff.
Component of electricity tariff.
- Market Administration and Power System Operation Fee.
- Market support service fee.
- Energy cost.
- Network cost.
Factors affecting the electric energy tariff.
Here are some factors that affect the electricity tariff in Singapore.
- Fuels: – Electricity tariff depends upon the price of the fuel. Fuel price tends to increase when the demand for electricity rises, and higher fuel prices result in a higher cost to produce electricity.
- Power plant cost:- Each power plant has construction, infrastructure, maintenance, and preservation costs. These costs are added to the electricity tariff.
- Types of load: – The load is broadly classified into three types, domestic, commercial, and industrial. The industrial consumer uses more electricity for a long period than the domestic. The tariff varies as per the need of the consumer.
- Power factor: – The low power factor increases the load of electricity, hence resulting in a loss in the whole system. The power factor correction equipment has to install for improving the power factor.
Electricity tariff depends upon locality and weather conditions. Electricity tariffs usually go high in summers.