What does this issue have to do with me? The light
Why is this topic relevant to me?
The light switches we flip every day are supported by an entire energy supply chain. Don’t think that the current global energy crisis has nothing to do with you—its impact may very well show up on your monthly electricity bill.
Every day, we turn on lights and air conditioners as if there were never a shortage of electricity, but behind the power lies an entire complex energy supply chain.
With the ongoing turmoil in the Middle East, global energy security is once again sounding the alarm. The most direct impact on us is rising oil prices and the creeping inflation that follows.
But the impact of this energy crisis goes far beyond that. It could also undermine the stability of our domestic power supply, and these hidden costs will eventually find their way into our electricity bills.
Where does the electricity we use every day come from?
Electricity is part of our daily energy consumption, but it does not appear out of thin air.
According to data from the Energy Commission, Malaysia’s electricity supply relies primarily on coal-fired power generation—a process that involves burning coal to release thermal energy, generating high-temperature, high-pressure steam, which then drives steam turbines to produce electricity.
The higher the temperature and pressure of the steam, the higher the efficiency of power generation.
The reason coal is the primary fuel is quite practical: reserves are stable, prices are more predictable than those of oil and natural gas, and the cost of power generation is relatively low.
Power “Shipped Across the Seas”
Just like fuel oil, our power generation actually relies heavily on imports.
Data shows that nearly half of Malaysia’s electricity generation currently relies on coal, yet the country is a net importer of coal, with about 90% of its coal sourced from overseas countries such as Indonesia. Should the international energy market experience volatility and coal prices rise, pressure on electricity rates will follow.
Apart from coal, natural gas accounts for 34.9% of our power generation. Meanwhile, about 80% of Asia’s crude oil and liquefied natural gas must pass through the Strait of Hormuz in southern Iran. Should tensions arise in this strait, global energy prices would react immediately.
At the same time, our country is actively developing renewable energy.
Currently, hydropower is the most mature form of renewable energy; solar power, however, has seen the fastest growth in recent years, particularly on the Peninsular Malaysia—from factory rooftops to agricultural solar farms, the expansion has been quite rapid.
In 2014, renewable energy accounted for a relatively small share of Malaysia’s electricity generation, but the situation has changed significantly over the past decade: nearly 40% of the country’s electricity now comes from renewable sources.
Who is using this electricity?
According to data from the Energy Commission, as of 2022, the country consumed a total of 168,120 gigawatt-hours (GWh) of electricity, with an average annual consumption of 5,142 kilowatt-hours (kWh) per person—higher than the global average!
Just how much is 5,142 kWh? It’s roughly enough to run a 1.5-horsepower air conditioner continuously for over six months, or to charge a smartphone 250,000 to 350,000 times.
However, as of 2024, residential electricity consumption actually accounts for only about 23% of the country’s total electricity usage. The real power hogs are industry (about 48%), followed by commercial establishments (about 29%).
Our electricity bills do not reflect the true cost
Did you know that electricity rates in Malaysia are among the cheapest in Southeast Asia?
According to statistics from GlobalPetrolPrices, a website that tracks global energy prices, Malaysia’s average residential electricity rate between 2023 and 2026 is about 5 cents per kilowatt-hour (kWh).
Of course, low prices don’t come without a cost. The electricity bills paid by most ordinary households do not actually reflect the true cost of power generation.
This is underpinned by Government subsidies, with Tenaga Nasional also absorbing part of the costs.
Once these subsidies are scaled back, the days of “cheap electricity” may no longer be a given.
Currently, Tenaga Nasional Berhad (TNB) employs an Automatic Fuel Adjustment (AFA) mechanism. Monthly electricity rates are automatically adjusted based on changes in fuel costs and exchange rates, with fluctuations limited to within ±3 sen per kWh; adjustments exceeding this range require Government approval.
Nevertheless, certain categories of users are protected:
- Households with monthly electricity consumption of 600 kWh or less (monthly bills of approximately RM216 or less) pay only the base tariff and are not affected by the AFA—this covers about 85% of residential customers nationwide
- Users enrolled in the Green Electricity Tariff (GET) program are also unaffected, as that electricity comes from renewable sources and its price does not fluctuate with fossil fuel costs
- Extremely low-income households are eligible for a monthly electricity rebate of up to 40 ringgit from the Government
Additionally, users with smart meters can opt for the “Time of Use” tariff plan to save on electricity bills by shifting their usage away from peak hours.
Off-peak hours are weekdays from 10:00 PM to 2:00 PM the following day, as well as all day on weekends; peak hours are weekdays from 2:00 PM to 10:00 PM.
For electricity consumption not exceeding 1,500 kWh: 28.52 sen/kWh during peak hours and 24.43 sen/kWh during off-peak hours; for consumption exceeding this level, the rates are 38.52 sen and 34.43 sen, respectively.
The crisis is closer than we think
The Government estimates that as Singapore’s population reaches 40 million by 2050, energy demand will continue to grow by 2% annually. If the status quo persists, electricity bills will only become more expensive in the future.
Compounding the challenge, natural gas production is expected to hit a bottleneck by 2030, and there are long-term concerns regarding the supply of imported coal and natural gas.
And that’s without factoring in unforeseen circumstances.
Economy Minister Akmal Nasrullah pointed out that any risks in the Strait of Hormuz would drive up domestic energy costs, which would in turn affect electricity rates and even impact overall prices. Even though the Government is currently providing subsidies, the pressure from rising costs will sooner or later be reflected in our bills.
Siti Safinah, CEO of the Energy Commission, has stated that although authorities have no immediate plans to adjust electricity rates, consumers should prepare themselves for future rate hikes.
She said, “Although the increase may not be as high or as drastic as in other countries, costs will still rise.”
Nevertheless, as fuel costs rise, residential customers will no longer be eligible for the AFA rebate starting this May. Residential customers who consume more than 600 kilowatt-hours (kWh) of electricity per month will be required to pay a surcharge of 1.38 sen per kWh, which means an increase in electricity bills.
According to TNB’s forecast, the AFA rate will remain above zero for the next three months, and electricity bills may rise further.
What Can We Do in the Face of This Crisis?
In 2023, the Government launched the National Energy Transition Roadmap (NETR), with the goal of increasing household energy savings by 20% and raising the share of renewable energy to 70% by 2050, gradually moving away from heavy reliance on coal and natural gas.
Imagine a future where your home’s roof is equipped with solar panels. Through the Net Energy Metering (NEM) scheme, you generate your own electricity, and any surplus can be sold back to TNB. Even if the central grid experiences an outage, your home will still have power.
Of course, when it comes to energy security, we can make a difference through small actions—by reducing all unnecessary energy consumption and adopting a more frugal lifestyle. For example:
- Turning off lights, fans, or air conditioners when not in use
- Choosing 5-star energy-efficient appliances—which aligns with the goal of reducing energy consumption by 20% by 2050 and helps you save on your electricity bills
- If possible, participate in the People’s Solar Program by installing solar panels on your roof; the Government offers a RM400 subsidy
The global energy crisis reminds us that the fuel we fill up on and the electricity we use are never to be taken for granted. Diversifying our energy supply and conserving electricity are no longer just topics for experts to discuss; they are tangible ways to protect our wallets and maintain our standard of living.
Data/Source:
- Hannah Ritchie & Rosado, P. (2025). Energy: Malaysia country profile. Our World in Data. https://ourworldindata.org/profile/energy/malaysia
- Suruhanjaya Tenaga (Energy Commission Malaysia). (n.d.). MyEnergyStats. https://myenergystats.st.gov.my
- Tenaga Nasional Berhad. (n.d.). Electricity tariff information. https://www.mytnb.com.my/tariff/index.html?v=1.1.49
- Global Petrol Prices. (n.d.). Fuel prices and energy data. https://www.globalpetrolprices.com
- Ministry of Economy Malaysia. (2023). National Energy Transition Roadmap (NETR). https://ekonomi.gov.my/sites/default/files/2023-09/National%20Energy%20Transition%20Roadmap_0.pdf
- Sinar Harian. (2026). Prepared to face rising fuel costs – Energy Commission. https://www.sinarharian.com.my/article/773762/berita/nasional/bersedia-hadapi-peningkatan-kos-bahan-api—suruhanjaya-tenaga
This article has been translated from its original Chinese version.
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