Household electricity bills set to rise as carbon tax goes up in 2024

Four-room Housing Board flat could see an increase of 4 in monthly utility bills

- Lynda Hong

Electricity prices for households are poised to rise in 2024 as power generation companies will face a higher tax for their carbon emissions.

On average, the higher carbon tax could lead to an increase of 4 in monthly household utility bills for a four-room Housing Board flat, according to a forecast from the National Climate Change Secretariat NCCS). This is assuming the full cost of the carbon tax is passed on to consumers.

Electricity retailers have not yet disclosed details of the price changes.

In 2024, Singapore’s carbon tax will rise to 25 per tonne of emissions, up from 5 per tonne now. This will be raised to 45 per tonne of emissions in 2026, and eventually to between 50 and 80 per tonne of emissions by 2030.

Introduced in 2019, the carbon tax was set at 5 per tonne for five years till 2023 to provide a transition period for facilities that directly emit at least 25,000 tonnes annually.

NCCS calculated that every increase of 5 in carbon tax could cause household electricity tariffs to rise by a corresponding 1 per cent. This means electricity bills could go up by about 4 per cent in 2024.

Households here can either choose a price plan from an electricity retailer or buy power from SP Group at the regulated tariff set by the Energy Market Authority.

Electricity retailers that spoke to The Sunday Times were tightlipped about the exact rate increase of electricity prices.