According to a report from Bloomberg, the Singapore Power Market Authority, the market regulator, plans to impose stricter regulations on the country's electricity market to curb price fluctuations that could harm retailers, businesses and households.
Starting July 1, the regulator will cap wholesale electricity prices, linking them to natural gas and production prices.
The decision was made in response to a significant increase in prices this year, which reached 3000%, despite a significant reduction in the cost of liquefied natural gas.
The regulator has held consultations with key industry players and utilities to find the best ways to mitigate the price fluctuations that caused the bankruptcy of several independent retail electricity providers two years ago. Due to the extreme volatility of electricity prices, utilities are reluctant to invest in additional capacity to generate electricity, which could reduce the deficit.
Last month, electricity prices hit S$3,594 ($2,685) per megawatt-hour in daily trading after a local power plant shut down operations to upgrade a turbine due to unusually high temperatures.