Thailand’s Minister of Energy scolds media and confirms no rise in electricity prices from September to December 2024, keeping rates stable at ฿4.18 per unit. The government remains committed to reducing electricity costs to support consumers and industry amidst economic challenges.
Thailand’s Minister of Energy, on Saturday, scolded the media for scaremongering in relation to a reported 50% hike in electricity charges. In short, Deputy Prime Minister Pirapan Salirathavibhaga confirmed that the price of ฿4.18 per unit will remain in effect from September through to December 2024. It comes as the current government stands committed to reducing electricity costs both to help the already reduced purchasing power of Thai consumers and to assist industry through a crisis. At the same time, a new power plan introduced in June will focus on the government’s goal of providing cheaper electricity.
Thailand’s Minister of Energy and Deputy Prime Minister Pirapan moved over the weekend to quell fears of sky-high electricity costs adding to the country’s economic woes.
Indeed, the current government’s record in controlling electricity costs since it came to power is one of its singular achievements.
Furthermore, the Pheu Thai-led government appears serious about pursuing plans to bring down energy costs while at the same time pursuing climate goals.
Deputy PM assures public of stable electricity prices amidst economic concerns in Thailand
On Saturday, Mr. Pirapan suggested that the current price of ฿4.18 was likely to remain the same. The government reviews the country’s electricity tariff every four months as part of its energy framework.
The need for the minister’s statement came after reports suggested the price may rise as high as ฿6 per unit for some customers, in particular, large energy users such as factories or commercial concerns.
The reasons given for the pressure for a price hike were higher energy costs and a lower valued baht.
The Federation of Thai Industries (FTI) expressed alarm mid-week. It warned it could be the death knell for struggling firms coping with a sluggish economy and competition caused by dumping from China.
Thailand maintains competitive electricity prices even with global economic pressures
Certainly, in this respect, Thailand compares well to Western economies with a system that balances sustainability and competitiveness while being sensitive to the needs of consumers and industry.
At this time, the Electricity Generating Authority of Thailand (EGAT), the country’s electricity generator, works in conjunction with private firms to meet the kingdom’s demands.
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Undoubtedly, it is achieving this goal. As of September 2023, the electricity generating capacity in Thailand was 48.799 GW, while peak demand, reached in May 2023, was 34.13 GW.
At the same time, prices at the current rate are competitive although other Southeast Asian economies such as Vietnam are offering discounted electricity to large firms investing in the country.
However, Thailand’s electricity costs are in line with Indonesia and lower than those charged in Malaysia, Vietnam, and developed Asian economies.
Government reaffirms its commitment to affordable energy as well as lower Carbon sources
According to a government press statement in September 2023, the overarching goals of the kingdom’s policy are to keep costs lower for consumers, embrace and develop lower-carbon energy sources while maintaining an adequate and secure supply of electricity.
Hence, there is a renewed emphasis on solar power, for instance. Significantly, the kingdom’s policymakers have regard for the kingdom’s energy security moving forward.
Nevertheless, at this time, Thailand’s electricity-generating requirements rely heavily on natural gas. In brief, the state-owned energy firm PTT Plc is a key player.
In essence, it allows the government to manage its energy bill and also ensure that it strikes a balance between state control and market forces.
The review every four months examines the Ft cost changes, which is the main variable. This is a variable cost calculator mechanism added to a calculated fixed cost. It deals with variable energy supply costs subject to market swings.
In short, what is paid in respect of electricity generation operations through the Electricity Generating Authority of Thailand (EGAT).
Deputy PM Pirapan updates on electricity pricing review and praises industry cooperation
On Saturday, Mr. Pirapan told reporters that the current review is almost complete with respect to the September to December period. He said it would be presented to Prime Minister Srettha Thavisin.
Significantly, he expressed annoyance at media reports causing panic. At the same time, he praised the Electricity Generating Authority of Thailand (EGAT) and PTT Plc for their cooperation in the interests of the general public.
The Thai government in June had a public consultation on its Power Development Plan. This outlined the development of the country’s electricity power generation infrastructure up to 2037.
In summary, it puts the government’s priorities first and foremost. The goal is lower-cost electricity.
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Electricity price freeze requested by the Deputy PM to help Thai households cope with the slower economy
Certainly, the plan allows for more alternative power supplies but focuses on reducing electricity costs rather than solely on climate goals. For this, it was widely criticised by vested interests.
Government seeks to balance Energy Security, Competitive rates and Investment Incentives
In the meantime, it was also mindful of electricity security, a key area where the kingdom has performed well in the last few decades compared to countries such as South Africa.
In the meantime, the government has introduced new legislation to allow a change to the framework, particularly in relation to large investment projects such as data centres.
This move comes in response to discussions between Prime Minister Srettha Thavisin and large American firms. The goal is to allow them to have large data centres powered by green electricity at highly competitive rates.
The Permanent Secretary of the Ministry of Energy, Prasert Sinsukprasert, confirmed the plan on Tuesday, June 25, after cabinet approval.
New legislation allows direct power contracts for large-scale Renewable Energy projects
In effect, it will allow large energy generators in fields such as solar power to contract directly with private firms.
However, the maximum power station capacity will be 2 GW. The senior official stressed that this was a pilot operation subject to strict oversight.
Undoubtedly, this would mainly apply to large-scale projects.
In the meantime, state officials will monitor and report on it as the plan moves forward.
In particular, the government will monitor the impact of such agreements and the wider generation of electricity for the national grid.
The plan is particularly supported by the Prime Minister, who tweeted enthusiastically about it at the end of June. He said it would help attract more data centres.
‘Clean electricity is a very important competitive advantage and direct power purchase agreements will unlock the door for Thailand.’
For the moment, such operations will be prohibited from selling electricity to the main supply grid.
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