Which Countries Have the Cheapest Electricity Prices?

Electricity prices can vary massively from country to country. Factors such as domestic resources, government policies and economic stability can all influence the cost and availability of electricity.

In some countries, electricity can be significantly cheaper than in others. This can help to be a boost to the economy, encouraging industry and lessening the financial impact on those who live there. Using the latest data from Global Petrol Prices, we found the countries with the cheapest electricity prices and investigated exactly why they can keep energy rates so low.

Iran has the cheapest electricity prices in the world at $0.002 per kWh. There are a number of factors that contribute to Iran’s low electricity prices, including the country’s abundance of natural gas and oil. Iran has the third-largest proved oil reserves and the second-largest natural gas reserves in the world. Because Iran does not need to import fossil fuels, like many other countries, it can supply electricity at a much cheaper rate.

Energy in Iran is largely controlled by the state, meaning the government can set electricity prices without market influence, so they can keep rates low. The government heavily subsidises electricity prices – in 2019, 19% of GDP was spent on energy subsidies. The aim behind this is to ensure energy is affordable for the entire population and also to help support local industry and encourage economic growth.

Whilst currently nuclear power and renewable energy sources only account for 1% of Iran’s Total Energy Supply (TES), the country does have the ability to generate significant power from solar. Iran is located near the equator, and it’s reported that 90% of the land area could provide solar power for at least 300 days a year. Iran now has a plan to introduce 10,000 megawatts of renewable electricity to the grid by the end of 2025.

Syria has the second cheapest electricity prices in the world, at $0.003 per kWh. Like Iran, Syria has domestic resources, including oil and natural gas, which it uses for its own electricity production, so it doesn’t have to pay to import resources The energy sector is also largely controlled by the government, so prices can be set lower to make electricity more affordable for more of the population.

The Syrian government has heavily subsidised electricity prices to help make electricity more accessible. However, this has put a strain on the national budget, and recently the government has begun to gradually lift these subsidies to help improve public finances.

This is, in part, as a result of the war that has now been going on for over a decade, which has not only impacted Syria’s economy but also the electricity infrastructure. The country often sees blackouts and an unreliable supply of energy, making access to electricity limited or non-existent, even with low prices.

Cuba currently has the joint-third cheapest electricity, costing $0.006 per kWh. Cuba has domestic resources, so does not need to import any fuel to generate electricity, which helps to keep prices down. This includes oil, natural gas, and also renewable sources.

Renewable energy has become a priority of the Cuban government in recent years, with solar panels installed in thousands of homes and investment in wind energy. The aim is to have renewable sources produce 25% of energy in the country by 2030.

The government has also implemented schemes to reduce overall energy consumption in the country, which helps to keep demand and prices low. Citizens in Cuba have been encouraged to swap out inefficient appliances for energy-saving ones, and education on energy-saving practices has been promoted.

However, plans have recently been announced to increase electricity prices by 25% for major consumers in residential areas. This measure aims to reduce the country’s deficit and revive the economy, but it’s thought that it’s the people of Cuba who are already financially struggling who will be negatively impacted.

Sudan has the joint-third cheapest electricity at $0.006 per kWh. The energy sector in Sudan is state-controlled, allowing the government to set prices without competition. The country has an abundance of resources, including oil and natural gas. Sudan is a net-exporter for energy, meaning it produces more energy than it needs and does not require importing to generate electricity.

However, Sudan has faced severe challenges due to political instability and inadequate infrastructure. Millions of people in Sudan are below the poverty line due to economic crises in the country and many people can’t access electricity at all, despite low prices. At the same time, the Sudanese government has been raising electricity prices, in an effort to steady the economy. Some social groups would have seen tariffs raise by 13,000% after multiple adjustments.

Sudan is thought to be able to have considerable potential for hydropower, due to it’s location by the Nile River. Not only would this be a sustainable, renewable source of energy, but hydropower would also be relatively low-cost once the infrastructure is in place. There are currently plans to build a Gran Ethiopian Renaissance Dam, and whilst this has its own controversies around environmental and social matters, it could be a low-cost energy supply for Sudan.

Ethiopia has the joint-third cheapest electricity in the world, at $0.006 per kWh. Like the other countries on this list, the Ethiopian government subsidises electricity costs, in an effort to make electricity more accessible to the wider population.

Ethiopia has some oil and natural gas, but has an abundance of renewable energy sources, which the government has put considerable investment into. This includes solar power, wind power, hydroelectric and geothermal. Currently, 90% of Ethiopia’s electricity comes from hydropower, with 8% from wind and 2% from thermal sources.

The country has the potential to generate over 60,000 MW of electricity from renewable sources. Development in diverse projects for different renewable energy sources could see the country meet growing demand for electricity in sustainable ways.

Below are the top ten countries with the cheapest electricity prices:

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