Thai Minister Unveils New Strategy to Slash Electricity Costs

[webfact]

Erawan gas field // FIle photo

 

In a move to alleviate soaring electricity bills, Energy Minister Pirapan Salirathavibhaga has introduced a strategy to cut costs by nearly 0.40 baht per kilowatt-hour. This proposal involves optimising the gas usage within the Pool Gas system, crucially reducing expenses related to power generation.

 

Exceeding the Energy Regulatory Commission's (ERC) proposal for a 0.17 baht reduction, the minister's plan hinges on modifying how Pool Gas is utilised rather than cutting government spending on renewable energy incentives, which the ERC had suggested might present legal challenges.

 

The Pool Gas approach accounts for the weighted average wellhead cost of gas from diverse sources, including the Gulf of Thailand and imported liquefied natural gas (LNG). With gas comprising over 60% of Thailand’s power generation fuel, it's a significant driver of fluctuating utility costs, primarily due to pricey imported LNG.

 

Minister Pirapan noted that efficient management of Pool Gas could lead to cheaper electricity tariffs, benefiting both power generation and industrial sectors. Although specifics on the adjustments were not detailed, analysts theorise that by tweaking Pool Gas usage, power producers might access cheaper gas than other industrial users.

The minister emphasised ongoing efforts to implement these changes before the next four-month tariff cycle set by the ERC. The current electricity rate of 4.15 baht per unit could potentially drop below 4 baht, according to Pirapan, with a focus on redefining the power price structure through better Pool Gas management.

 

Contrarily, the ERC advocated for reduced government expenditure on renewable energy promotion, a costly component of the current power tariff. These costs include feed-in tariffs given to private power producers, which account for 4% of the total tariff.

 

However, Minister Pirapan warned against breaching existing contract terms, as they are legally binding and auto-renew every five years, potentially leading to complex legal disputes if altered.

 

Pirapan's approach represents a collaborative effort to harmonise the nation's energy policy without infringing upon existing commitments, aiming for a fiscally sustainable yet legally sound reduction in power costs. As this initiative progresses, it’s set to impact how Thailand manages its energy resources, possibly setting a precedent for future economic and environmental strategies, reported Bangkok Post.

 

-- 2025-02-15

 

 

[JimHuaHin]

The greening of Thailand?

[ExpatOilWorker]

Good to see that Thailand 🇹🇭 is not repeating the "green" mistakes of Europe. 

[JoePai]

But why has this not been done already ?

[WHansen]

I'm sure the EV heros will be pleased to know their green cars are being charged by fossil fuel burning.