Cost of generating electricity increases by 45%

Energy and Natural Resources Minister Takiyuddin Hassan says the cost of coal ballooned in the latter half of 2021 but this cost was not passed on to the consumer. – The Malaysian Insight file pic, March 15, 2022.

THE increase in coal prices has caused the cost of generating electricity to increase by 45%, Energy and Natural Resources Minister Takiyuddin Hassan said in Parliament today.

However, he said the government had decided to give a rebate of 2 sen/kWh for domestic consumers from February to June 2022.

“The government covers a subsidy of RM715 million using funds from the Kumpulan Wang Industri Elektrik.

“We do not impose any surcharge even though it should be released to consumers,” he said when winding up the debate on the motion of thanks for the royal address for the Ministry of Energy and Natural Resources.

Takiyuddin said that between July and December 2021, a total of RM1.672 billion had been spent on fuel for electricity generation, which should have been passed to consumers for the period from February to June 2022.

“With the sharp rise in coal prices in the global market, the actual coal price has reached US$105.09 (RM441.90) a tonne, compared to the projected price in 2021 of only US$67.45.

“It means an increase in fuel prices of US$37.64 a tonne. This is why the imbalance cost pass-through (ICPT) mechanism has to release costs to commercial and industrial consumers with a surcharge of 3.70 sen/kWh,” he added.

Takiyuddin said commercial and industrial users were encouraged to explore the potential of solar energy by participating in the ministry’s clean energy metering scheme 3.0.

“The ministry also advises industrial players to practise the efficient use of electricity by using equipment categorised as four-star and five-star certified by the Energy Commission,” he said. – Bernama, March 15, 2022.

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