First published: 19 January 2021 @ 12:58 pm
Electricity prices in different countries may vary accordingly. This article will tell you the differences in electricity prices between Singapore, Malaysia, Philippines, and Indonesia.
The cost of production
Electricity produced from fossil fuels such as coal or oil is cheaper than the electricity generated from renewable energy sources. However, production costs depend on the fuel used and other expenses, such as maintenance and labor.
Costs for fuel-generated electricity are much lower than those for renewable primary energy supply. It also takes a lot less work to generate renewable energy sector.
The price of natural gas differs significantly from one country to another. For example, you can buy natural gas at $7.5 per million Btu (British Thermal Unit) in Indonesia. Meanwhile, it costs $2 per million Btu in Thailand.
If no carbon credit is applied, electricity generated from natural gas costs about 10 cents/kWh. In contrast, electricity produced from coal costs about 5 cents/kWh if no carbon credit is applied.
Government regulations and policies
Prices for electricity vary depending on government regulations or policies across Southeast Asian. Malaysia’s policy mandates that energy producers produce at least 24% of their electricity from renewable sources by 2020.
Thus increasing the demand for alternative energy sources, including solar power generation systems. The government has already planned to invest US$30 billion into building six new nuclear plants by 2024. This decision is to fulfill about one third of its power demand instead of relying on fossil fuels altogether.
Indonesia has also promised investment in a super mega solar project that will account for 15% of its power supply by 2025. In addition, it reduces dependence on imported fuel.
Indonesia’s government has announced that it plans to reduce its carbon emissions by 40% in 2030. In addition, they announced its INDC (Intended Nationally Determined Contribution) commitment made at the COP21 conference in Paris. On the same occasion, 195 countries agreed to limit global warming below two °C until 2050.
While providing support and financing for developing countries’ climate actions according to their national circumstances; thus helping them achieve sustainable development goals (SDGs).
Besides reducing carbon emissions, Indonesia also plans to increase GDP growth potentials through higher investments in clean energy technologies, including solar power, and low-carbon, renewable energy supplies.
In contrast to Indonesia, the Philippines has imposed a solar power tariff of $6.5/kWh, the highest in Southeast Asia. Last year, the country also started a feed-in tariff program for renewable energy to encourage more companies to install new renewable energy facilities.
In order to reduce its electricity dependency on oil. Last year, Malaysia implemented a solar rebate service program called “Sarawak 1Malaysia” to encourage businesses and households to install solar power systems.
Price comparison
Note: Price per kWh is calculated based on average household consumption of 1,700 kWh/year. The only reason Singapore experience lower electricity price, although it has one of the highest electricity rates in Southeast Asia, is its small size (area of 710 km2).
Singapore’s government has also actively promoted the use of renewable energy sources by reducing import tariffs on solar panels and implementing a feed-in tariff system for household consumers since 2008.
Energy produced from renewables is now eligible for net meter billing, including no extra charges or taxes on your bill if you produce more energy than you consume at home.
This policy will strongly encourage more people to install solar panel systems at home or businesses until 2020 when the government plans to increase maximum net billing rate from 80% to 100%.
The data above shows that although the electricity price in Singapore is higher than in Malaysia, some other factors, such as economic growth of scale and energy mix, affect the cost of electricity.
Aside from differences in production costs and government policies, the energy mix in each country also affects its electricity prices. For example, electricity produced from natural gas costs less in Singapore and Malaysia than electricity generated from coal.
In contrast, Indonesia has no natural gas facilities to produce electricity, thus causing a significant difference in its power prices from those of Singapore and Malaysia.
How much does electricity cost in Singapore?
The average price of electricity in Singapore is about $0.18 per kWh (low season) and $0.24 per kWh (peak season) based on the Department of Statistics, Singapore released in 2014.
Compared to other countries in Southeast Asia, Singapore has one of the highest electricity rates; however, the country also has one of the lowest energy demand.
Energy intensity is the amount of energy required to produce one unit of GDP or economic output measured by GDP per kilowatt hour or kilogram oil equivalent.
Singapore’s GDP/kWh is around $3 to $4, a high value compared to other countries such as Indonesia and Malaysia, which cost only $1 to $3, and Thailand only costs $2 to $3.
The high energy intensity can be Singapore’s high dependency on the industrial sector. At the same time, its relatively low population density causes higher installation costs for each household or business compared to those with higher population density such as Malaysia, the Philippines, and Indonesia.
How much does electricity cost in Malaysia?
The average price for electricity in Malaysia is about RM 1.2/kWh (low season) and RM 1.8/kWh (peak season) based on Malaysia’s Energy Commission. Therefore, compared to Singapore, Malaysia has a much lower electricity price.
The electricity consumption per capital in Malaysia is about 1,801 kWh per year which is significantly lower than that of Singapore, which is about 2,872 kWh per year;
Hence, the electricity prices are also lower than Singapore’s, and Malaysia’s average GDP/kWh is also higher at $2 to $3.
How much does electricity cost in the Philippines?
The average price for electricity in the Philippines is about $0.15 per kWh (low season) and $0.20 per kWh (peak season) based, on the Department of Energy of the Philippines released in 2013.
The average electricity consumption per capital in the Philippines is around 1,300 kWh per year which is much lower than that of Singapore and Malaysia;
hence, its electricity rates are also significantly lower than those two countries with economies more significant than the Philippines.
How much does electricity cost in Indonesia?
The average price for electricity in Indonesia is about $0.12 per kWh (low season) and $0.18/kWh (peak season) based on data from Indonesia’s Ministry of Energy released in 2014.
Indonesia has one of the lowest electricity prices in the region; its economy ranks third after China and India, based on its GDP size. As a result, its energy efficiency should be higher than other countries with smaller economies.
Such as Singapore and Thailand, despite having similar population densities as those countries, such as Singapore and Thailand require more energy resources to develop a country with a larger economy than a smaller one.
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