Demand Response
in Singapore
Published by
Blue Whale Energy
Reading time
~8 minutes
A 30-minute spike can create a week of value
One volatile week in Singapore's power market
Most Demand Response value does not come from reducing power all day. It comes from being ready when the grid is tight and wholesale prices spike.
In Singapore, eligible large electricity consumers can offer verified reductions in grid import into the wholesale electricity market. ¹ When those reductions help lower wholesale prices, participating sites can receive a share of the savings created.
For many C&I sites, that reduction does not have to mean switching off operations. A behind-the-meter battery can reduce grid import while the site continues running.
This guide explains where those payments come from, why a few high-price periods matter most, and how batteries can deliver reductions without turning Demand Response into an operational shutdown.
What is
Demand Response?
Demand Response rewards eligible businesses for reducing grid import when the power system needs flexibility.
Singapore’s electricity system has to keep supply and demand balanced in real time. When demand rises, the system can either bring on more generation or reduce demand from large electricity users.
Demand Response creates a market for that second option.
Eligible businesses commit to reducing how much electricity they draw from the grid during selected periods. When they are activated, deliver the reduction, and the reduction is verified, they can receive incentive payments.
There are three main ways a site can reduce grid demand. Two involve changing how the site operates. The third changes where the site gets its power from.
When does
Demand Response create value?
Demand Response is most valuable when the power system is under pressure.
Most of the time, Singapore’s wholesale electricity price is relatively steady. Demand can be met by lower-cost generation, so there is less need for flexibility from large electricity users.
But during certain periods, the system can become tighter. Demand may rise, available supply may fall, or a generator may unexpectedly trip offline.
When that happens, the market may need more expensive supply to keep the system balanced. Prices can move sharply during those intervals.
Demand Response is built for these moments. If an eligible site can reduce verified grid import at the right time, that reduction can help lower demand on the system - and create settlement value.
Because Singapore’s wholesale market is settled in half-hourly intervals, even a short reduction can matter.
USEP · Uniform Singapore Energy Price — The half-hourly wholesale price all generators receive. VCP · Vesting Contract Price — The regulated reference price; quoted quarterly by EMA
How is the price set?
The last unit of supply needed sets the market price.
Singapore’s wholesale electricity market works by matching demand with available supply for each market interval.
Lower-priced supply is used first. If demand is higher, the market has to call on more expensive supply. The final plant needed to meet demand is called the marginal plant - and its offer sets the clearing price for that interval.
That is why Demand Response can create value.
If an eligible site reduces grid import at the right moment, the market may no longer need the next expensive plant. The interval can clear at a lower price, reducing wholesale costs. Successful Demand Response participants receive a share of the savings created by that price reduction.
How a reduction changes the clearing price
This simplified supply stack shows one market interval.
Available supply is stacked from lower-priced to higher-priced generation. Scroll through to see how a verified Demand Response reduction can lower grid import, change the marginal plant, and reduce the clearing price.
Where do the savings go?
Successful Demand Response participants receive one-third of the savings they help create.
When Demand Response lowers the market clearing price, it creates savings across the wholesale market interval.
Those savings are split in two ways.
Successful participants receive one-third of the calculated price-reduction savings, based on the verified reduction they delivered.
The remaining two-thirds stays in the wholesale market through the lower clearing price, reducing costs for electricity buyers.
This is what makes Demand Response different from a grant or subsidy. Participants are paid because their reduction helps create savings for the wider market. ³
Participant incentive
Paid to successful DR participants whose verified reductions helped lower the market price.
Market-wide savings
Passed through the wholesale market through a lower clearing price, benefiting electricity buyers.
The split matters because DR is performance-based. A site is not paid simply for having a battery or reducing load. It is paid when its verified reduction helps lower the market price.
Is this real in Singapore?
Yes. Demand Response has already delivered measurable wholesale market savings.
Demand Response is not just a policy idea. It is already part of Singapore’s wholesale electricity market.
Between 2023 and mid-2024, Demand Response helped deliver more than S$700 million in wholesale market savings to electricity buyers through lower clearing prices.
That figure is market-wide savings - not individual participant revenue. Demand Response participants are paid when their verified reductions help lower the market price and create savings for the system. ⁴
Demand Response is becoming a real flexibility market in Singapore.
Early participation was limited because many sites had to change operations or curtail load to respond.
That changed when eligible battery storage entered the programme. Batteries can reduce grid import behind the meter, making Demand Response practical for more C&I sites.
Enrolled DR capacity rose from 7 MW in 2018 to 167 MW by 2025, with more than 400 MW of commercial and industrial flexibility still untapped. ⁷
What happens
during an event?
Your operations keep running. The battery reduces your grid draw.
In a battery-backed Demand Response event, the site does not need to reduce its total electricity use.
Instead, the battery supplies part of the site’s load behind the meter. The equipment keeps running, but the site draws less power from the grid during the event.
When an event is called, the battery responds within those limits. After the event, meter data is used to compare actual grid import against the baseline and verify the reduction.
The host site does not need to manage market operations. Blue Whale handles dispatch, metering, submissions, settlement, and reporting.
The site keeps using power. Grid import falls.
In a battery-backed Demand Response event, the site does not need to shut down equipment or reduce total load.
The battery supplies part of the site’s power behind the meter. Operations continue, while the grid meter records a lower import during the event.
This is the key difference: the site’s load stays the same, but the source of power changes.
What do
batteries change?
Batteries make Demand Response practical for sites that need to keep running.
Traditional Demand Response usually depends on curtailing load. That can mean turning down chillers, pausing equipment, shifting production, dimming lights, or rescheduling operations.
Battery-backed Demand Response creates another path.
Instead of asking the site to reduce its operating load, the battery supplies part of the site’s power behind the meter. The site continues running, while grid import falls during the event.
The market sees the same thing: a verified reduction in grid demand.
The site experiences something different: no need to switch off core operations.
This is what EMA's 2024 BESS-eligibility ruling formally opened up. ⁶
About Blue Whale Energy
Blue Whale Energy develops and operates battery storage assets for commercial and industrial sites in Singapore.
This guide was created to explain how Singapore’s Demand Response programme works, where market savings come from, and why battery storage can make participation practical for sites that cannot easily curtail load.
Blue Whale Energy is a named participant in EMA’s Virtual Power Plant Regulatory Sandbox. The company works with suitable host sites to deploy batteries behind the meter, reduce grid import during market events, and manage the operational and market interface.
Press contacts
Gabriel Lim
gabriel@bluewhaleenergy.com
Reshma Prabhu
reshma@bluewhaleenergy.com
References
Energy Market Authority. New Initiatives to Harness Demand Flexibility Potential in Singapore. Media release, October 2024. (Programme overview, eligibility, market mechanism.) ema.gov.sg
Open Electricity Market. Vesting Contracts — vesting data. (Quarterly VCP reference price.) openelectricitymarket.sg
Energy Market Authority. Demand Response programme — incentive payment methodology. One-third of price-reduction savings allocated to participants who deliver their committed reduction; remainder retained as wholesale market savings. (See Ref 1, programme details section.) ema.gov.sg
Energy Market Authority. S$700M+ wholesale savings figure, covering 2023 → mid-2024. (See Ref 1.) EMA media release PDF
Energy Market Authority. 400MW+ untapped demand flexibility potential identified across commercial and industrial loads in Singapore. (See Ref 1.) ema.gov.sg
Energy Market Authority. Battery Energy Storage System (BESS) eligibility for the Demand Response programme. 2024. EMA media release PDF
Channel News Asia. Participation in EMA's demand response scheme grows as firms curb peak electricity use. April 2026. (167 MW enrolled by end-2025; S$4,500/MWh incentive cap.) channelnewsasia.com
Energy Market Authority. New Initiatives to Future-Proof Singapore's Power Grid. 2025 media release. (Lists named participants in the EMA Virtual Power Plant Regulatory Sandbox, including Blue Whale Energy.) ema.gov.sg
Bar chart sourcing (§04, DR capacity 2018→2025): EMA FY2017/18 annual report (2018 baseline); EMC NEMS Market Reports 2019–2024; EMC end-2025 announcement; CNA April 2026 (167 MW figure).
