Can Thailand manage rising energy costs?

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OPINION

Covid has taken a back seat, as concerns over global energy bills are now making the headlines.

Last week in the UK, Ofgem announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022.

In Britain, where gas accounts for roughly 40 percent of electricity generation but has a disproportionate effect on its cost, the price jump announced last Friday follows a 54 percent rise in April. It will affect about 24 million households.

Germany's Federal Network Agency has also estimated that consumers could see their monthly heating bills triple next year due to dwindling Russian gas imports. 

Russia's war on Ukraine is drastically impacting energy prices everywhere.

Thailand’s rising costs

Meanwhile, many of us here in Thailand are expecting a rise in our electricity bills next month as Thailand copes with its own energy issues.

Our electricity bills could become more expensive than ever by this September, according to a source at the Office of Energy Regulatory Commission (ERC). 

In the last four months of 2022, the cost of electricity in the country could break the five baht per unit barrier for the first time, rising by 90 to 100 satang per unit.

The ERC said the rising cost of imported gas used to generate electricity is the cause behind the steep rise in prices. 

Thailand is importing expensive Liquified Natural Gas (LNG) in replacement for low-cost natural gas from the Gulf of Thailand.

Thailand's energy resources are modest and are being depleted. The nation now imports most of its oil and significant quantities of natural gas and coal. 

 

Facts and Figures

 

Thailand’s energy consumption has grown at an average rate of 3.3% from 2007 to 2017. 

 

Thailand produces 531,328.59 barrels per day of oil (as of 2016) ranking 29th in the world. 

Thailand produces every year an amount equivalent to 47.9% of its total proven reserves (as of 2016).

 

Thailand has no nuclear power stations. The Thai Energy Ministry periodically considers plans for nuclear power.

 

57% of its crude oil imports came from the Middle East (28,480 million liters), 15% from Fast East countries such as Malaysia, Indonesia, and Brunei (7,337 million liters), and 28% from other regions such as Russia and Australia (13,870 million liters).

 

Crude Petroleum was the 1st most imported product in Thailand. 

Thailand imports Crude Petroleum primarily from: United Arab Emirates ($3.84B), Saudi Arabia ($2.65B), United States ($1.37B), Angola ($1.09B), and Nigeria ($984M).

 

Does Thailand import oil from Russia?

Russia-Thailand in 2020, Russia exported $1.4B to Thailand. The main products that Russia exported to Thailand are Crude Petroleum ($911M), Coal Briquettes ($89.7M), and Wheat ($66.2M).

 

Why is gas cheap in Thailand?

Thailand's government has cut excise taxes on fuels to make them cheaper to import.

 

However, Thailand is curbing imports of liquefied natural gas due to surging prices, potentially putting the country at risk of fuel shortages.

State-run importers cut purchases of LNG from the spot market because of skyrocketing prices and limited availability, according to traders. 

And while they plan to boost purchases of cheaper alternatives, like diesel and fuel oil, the deficit left by cutting LNG may be too large to be filled by other sources, said some traders who didn’t want to be named as they’re not authorized to speak to the media.

“We won’t let a fuel shortage happen,” Thai deputy government spokesperson Rachada Dhnadirek said in response to a Bloomberg News inquiry on the prospect of a deficit. Thailand isn’t struggling to get supplies, she said.

Some of Thailand’s poorer Asian neighbors -- including Pakistan and Sri Lanka -- are in the midst of severe energy crises due to surging oil and gas costs. 

 

North Asian spot prices for LNG have jumped around 50% this month, taking them to more than triple what they were a year ago, as Russia’s move to curb exports to Europe boosted global competition for the super-chilled fuel.

 

Almost two-thirds of the nation’s electricity was generated from natural gas in the first four months of the year, government data show. 

 

The risk is also exacerbated by rising demand due to Thai industry and tourism recovering after the virus. 

 

Thailand's LNG imports so far in June are down from record levels, according to ship-tracking data compiled by Bloomberg.

 

Imported LNG accounted for a fifth of gas used for power generation in 2020, according to figures from state-run energy company PTT Plc. 

 

There was a rise in inward shipments in the first five months of this year to replace pipeline deliveries from Myanmar and less domestic output. 

 

However, overseas purchases are down by 35% so far in June from the same period in May, shipping data showed, as the plan started to take effect.

What is the Government and private sectors doing?

 

Curbing LNG imports due to soaring prices “is being considered,” said a PTT representative. 

The Thai government will postpone the planned shutdown of coal-fired power units at a state-owned utility’s power complex due to the surging LNG costs.

 

Four units at a plant in Lampang province will remain online until 2025, the Deputy Prime Minister said.

 

Using more coal and oil will push up global greenhouse gas emissions.

The government has cut excise taxes on fuels to make them cheaper to import. 

The amount of electricity produced from dirtier fuels has already been increasing this year. 

Diesel’s use in power generation in the first four months of 2022 was 14 times higher than in the same period last year, according to the country’s energy ministry.

Thailand isn’t in a crisis yet, but the prevalence of gas in its power mix does raise the threat of rationing or blackouts. 

 

Meanwhile, during the cooler weather open the windows and turn off the A/C otherwise you may have a shock when the next bill arrives.

 

 

-- © Copyright  ASEAN NOW 2022-08-29

 

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[Tropposurfer]

I read the percentage increases for the UK. I heard on cable news yesterday something to the effect that the energy costs for the UK utilities will rise 80% in the coming year!

I am not a world energy expert lol ???? but I can't help wondering if, if decades ago the governments of the world had moved to serve their peoples better we'd have a strong viable network of alternative energy sources, and perhaps more, and as yet undeveloped efficient energy and storage systems of such energy sources me.g. electric and hydrogen cars with far greater ranges, exponentially faster charging rates, cheaper, and exponentially better because of the generational development of same.

I can't help but sense inside me I agree with those who cry out that our governments have failed us.

 

I think of my old country Australia; A nation blessed with energy sources beyond imagining; Intense sunlight, a huge tidal coastline, and wind power.

The coordinated mass nation-changing efforts of contributing to and perhaps even leading the world in some forms of alternate energy development (solar was one for Oz at one time but was unfunded, left to starve and simply left our shores) has been piecemeal, and to my mind, little more than a political sham and play-acting.

With successive government complicit in this sham, being owned and bribed by the huge energy giants that roam both my country of birth and the globe making obscene profits of which only small percentages are plowed back into caring for the planet.

[Wombo1]

3 hours ago, Tropposurfer said:

I think of my old country Australia; A nation blessed with energy sources beyond imagining; Intense sunlight, a huge tidal coastline, and wind power.

The coordinated mass nation-changing efforts of contributing to and perhaps even leading the world in some forms of alternate energy development (solar was one for Oz at one time but was unfunded, left to starve and simply left our shores) has been piecemeal, and to my mind, little more than a political sham and play-acting.

 

And sadly past Australian LNG project did not mandate a certain % for local consumption, of which that is generally a standard clause in all similar projects globally.

 

If we had of done that our gas supply, fertilizers projects, etc would have had a significant competitive advantage. But alas...

[Cake Monster]

Thailand having about 60 % of their Power generated using Gas, has a real issue going on here.

Makes me wonder if they will try to obtain some of the " Burn off " that Russia is performing to ease the burden.

 

[Photoguy21]

59 minutes ago, Wombo1 said:

And sadly past Australian LNG project did not mandate a certain % for local consumption, of which that is generally a standard clause in all similar projects globally.

 

If we had of done that our gas supply, fertilizers projects, etc would have had a significant competitive advantage. But alas...

And possible very competitive for destitute people