This is a guest blog by Yu Sun Chin, Senior Regional Researcher at Zero Carbon Analytics (ZCA). ZCA is an international research group that provides insights and analysis on climate change and the energy transition. In the Philippines, families have been seeing their power bills rise over the past few months, especially since the Iran war. ‘When we got our energy bill after the Iran war broke out, we were very shocked. It was wow. It was a significant increase,’ Jaime Quemado, who had just bought rooftop solar in Manila, said in a recent AP story about the price shocks. The Philippines already has one of the highest power prices in Asia, second only to Singapore, which is a much wealthier country. Low-income households can spend up to 10% of their annual income on electricity, making electricity affordability a big issue. Imported fossil fuels are pushing up electricity bills There are many reasons why the country’s power prices are so high, including inefficient coal plants, how expensive it is to transmit power over the country’s 7,600 islands, and the fact that the government doesn’t subsidise electricity costs for consumers, unlike in other Southeast Asian countries, including Indonesia, Malaysia, and Thailand. But a big reason is that the Philippines generates just over three-quarters of its electricity from burning coal and gas in power plants, and a lot of this fuel is imported from other countries. Importing coal and gas is expensive, and becomes even more so when conflicts like the Iran war squeeze global supply and push up prices. Currently, LNG (liquefied natural gas, a gas cooled into liquid to travel long distances) prices in Asia are more than 70% higher than on February 27, the day before the Iran war began, and coal prices in Asia have risen around 20% over the same time period. A similar thing happened in 2022, when LNG prices hit historical highs in Asia after Russia’s invasion of Ukraine. Price of fossil fuels in Asia have increased since the war in Iran. Credit: Zero Carbon Analytics As the fuels used for power get pricier, electricity becomes more expensive to produce, and increases in global coal, oil and gas prices are felt in consumers’ pockets – especially in countries that rely on imported fossil fuels for power. In the Philippines, households literally see an increasing ‘generation charge’ in their monthly electricity bills, which refers to how much it costs to produce electricity. Poorer families will be hit hardest by rising energy prices – research shows that poorer Filipinos will lose a higher percentage of their income from energy price shocks than richer Filipinos, because, in addition to paying more for fuel and power, rising energy prices also raise food prices. But the Philippines isn’t the only country that imports a lot of fossil fuels. Many countries across the world meet the majority of their energy needs with fossil fuel imports, including Japan, Korea, Türkiye and Germany, according to think tank Ember. Other countries in South and Southeast Asia, like Thailand and Pakistan, import substantial amounts of gas, which they use to generate power. Thailand relies on gas to generate about two-thirds of its electricity, and Pakistan relies on it for around one-third. As a result, power bills are also going up in many of these countries, including Türkiye and Pakistan. Governments in Asia are rushing to get renewables online These high electricity bills aren’t inevitable – they are a result of power systems that are built to rely on turbulent fossil fuel markets. A system that uses renewable energy sources, like wind or solar PV, can help lower power prices. Once they are up and running, wind and solar power don’t require fuel – apart from sun and wind, which are free – so there are no fuel costs to fluctuate. Solar can produce stable power for up to 30 years. Research has shown that it is already cheaper to produce electricity from solar than from gas in the Philippines. The same is true in Thailand and other Southeast Asian countries, like Vietnam and Malaysia. In the Philippines, the government is taking note and rushing solar power online. On March 30, the government said it had activated 250 megawatts (MW) of solar capacity – equivalent to 8% of the county’s 2024 solar capacity – and 450 megawatt-hour (MWh) of battery storage. It has also said it would fast-track the completion of 22 power projects to bring an additional 1.47 gigawatts (GW) of renewable energy and storage online by the end of April. Many are turning to solar panels to generate electricity as they are cheaper than oil and gas. Image credit: ulleo, Pixabay Filipino homeowners are also hurrying to install solar panels, with rooftop solar becoming increasingly popular. A survey of 20 local solar companies saw a 70% rise in weekly installations and a six-fold increase in customer inquiries since the Iran war began, according to the AP. Thailand is also seeing a surge in inquiries about installing new solar since the start of the Iran war, according to media reports. In April, the Thai government also approved THB 5 billion (about USD 156 million) in loans for people to install rooftop solar and buy EVs. In fact, our recent research found that 15 Asian countries have announced clean energy measures in response to the Iran war. Many asian countries have announced clean energy measures in response to the war in Iran. Credit: Zero Carbon Analytics More renewable energy is good for energy bills and the planet All of this new solar is good news for consumers’ pockets. If the Philippines continues to expand solar and use it to replace imported coal and gas in the power mix, it will help to lower electricity bills. The same is true for Thailand – we calculated that Thai households with solar could have saved 77% on their power bills compared to households without solar in 2024, saving an average THB 8340 (about USD 260). New solar is also good news for the planet. More renewable energy means fewer emissions from coal and gas plants, which will help to slow global warming and lessen the chances of climate impacts and extreme weather. This is especially important in Southeast Asia, which is one of the regions most vulnerable to climate disasters. The Iran war has reminded us that imported coal and gas are an expensive and risky way to generate power, just four years after Russia’s invasion of Ukraine showed the same. Choosing to replace fossil fuel generation with renewable energy will help to protect families from paying the price of such global crises. The post Out of pocket: The real cost of importing fossil fuels on electricity bills appeared first on 350.