Will Rising Fuel Prices Impact Your Electricity Bill? Here's What You Should Know
Fuel prices have been skyrocketing all around the world, and Malaysia as well as other countries are feeling the brunt of it
First of all, it's important to know that coal and natural gas play a vital role in generating electricity, both globally and in Malaysia.
Generation costs, including fuel price, make up more than 65% of the base electricity tariff presently. In fact, fossil fuels (coal and natural gas) are used to generate nearly 93% of electricity in Peninsular Malaysia. Hence, when fuel prices increase, it means that it costs more money to generate electricity.
But wait, how do rising fuel prices impact you on a daily basis?
Thankfully, most Malaysians are not feeling the impacts of the rising fuel prices directly just yet.
Currently, rising costs of generating electricity have been absorbed by the government — funds from Kumpulan Wang Industri Elektrik (KWIE) are being used to maintain the rebate of 2.00 sen/kWh for domestic and target users.
In fact, through KWIE funding support, the electricity industry has managed to cushion the impact of fuel prices, giving Malaysians a total rebate of RM8.6 billion since 2015.
However, in the long-term, if fuel prices continue to rise, Malaysians may need to brace themselves for possible electricity surcharges.
Here's what you need to know and how you can safeguard yourself from rising costs:
1. Your electricity bill may fluctuate every six months based on a system called Imbalance Cost Pass-Through (ICPT)
The electricity tariff in Malaysia is divided into base tariff and ICPT. The base tariff is fixed for three years at a time, while ICPT is reviewed every six months, depending on fuel price changes.
According to the latest ICPT decision on 26 January 2022, all domestic customers will continue to enjoy a 2.00 sen/kWh rebate, while commercial and industrial customers will see a 3.70 sen/kWh surcharge, effective 1 February until 30 June 2022.
Since the introduction of ICPT in 2014, a surcharge has never been imposed on households. Nevertheless, it's up to the government to decide whether to raise surcharges or maintain rebates, which is why households should prepare themselves for any of these possibilities in the near future.
2. The best way to counter rising costs of electricity is to be a prudent consumer, learning how to save and not waste energy
While you may not be in control of electricity tariffs, one thing you can do is to practice good, sustainable habits.
Here are a few easy tips by TNB to help you save electricity at home:
- Turn off your switches and unplug appliances when not in use
- Turn on your fan and keep the aircond between 24°C and 26°C to efficiently cool down your room
- Ensure doors and windows are closed when the aircond is in use, and set a timer to save electricity
- Make the most of natural lighting at home (open your curtains more often ;P)
- Try not to use the hot water setting when doing a full load of laundry, as it will consume more energy
- Try not to keep opening and closing your refrigerator, oven, and microwave when in use
- Keep your hot showers short, or better still, use cold water to bathe whenever possible
3. You can rest assured that TNB is looking towards greener energy sources, with a goal of net zero emissions by 2050
Although a majority of our electricity in Malaysia is still being generated using fossil fuels, this may no longer be the case a couple of years down the road. By 2035, TNB aims to reduce 35% of its greenhouse gas emission and 50% of its coal capacity. The goal is to become coal-free as early as 2050.
To achieve this, TNB is already working on different ways to produce energy sustainably, including solar, wind, and hydropower, as well as emerging green technologies like green hydrogen and carbon capture.
For more information about TNB, ICPT, and other electricity-related queries, head over to this website