Thailand Energy Minister: Lower Electricity Bills Planned
Thailand’s Energy Minister, Pirapan Salirathavibhaga, has unveiled an ambitious plan to significantly reduce electricity bills by manipulating the country’s «Pool Gas» system. This could cut costs by nearly 0.40 baht per kilowatt-hour (kWh), dwarfing the 0.17 baht per kWh reduction suggested by the Energy Regulatory Commission (ERC). This offers a glimmer of hope for consumers facing rising energy costs.
The minister’s proposal centers on optimizing the utilization of Pool Gas, a weighted average price of natural gas from various sources: the Gulf of Thailand, the Malaysia-Thailand Joint Development Area, Myanmar, and imported liquefied natural gas (LNG). Natural gas fuels over 60% of Thailand’s power generation and plays a vital role in industrial manufacturing; therefore, its price heavily influences electricity costs. The volatile and often exorbitant price of imported LNG is a primary driver of escalating electricity bills.
Minister Pirapan argues that strategic allocation of Pool Gas between power generation and industrial use can substantially lower the power tariff—the basis for electricity bills. While he didn’t disclose specifics, analysts speculate the plan might involve offering electricity producers gas at prices lower than those for industrial consumers. This strategic pricing would effectively subsidize electricity generation, resulting in lower consumer bills.
This contrasts with the ERC’s recommendation to reduce government spending on renewable energy incentives. The ERC believes that cutting feed-in tariffs and adder tariffs—financial incentives stimulating private renewable energy investment—could achieve cost reductions. However, Minister Pirapan expressed concerns about potential legal ramifications and breaches of existing power purchase agreements with private companies. These agreements, automatically renewing every five years, contain clauses regarding these tariffs; unilaterally altering them could lead to legal challenges.
Minister Pirapan’s Pool Gas management adjustments offer a more immediate solution, aiming to impact the power tariff within the next four-month cycle. The ERC adjusts the tariff every four months; the current rate (January–April 2025) is 4.15 baht per kWh. Minister Pirapan is confident in bringing the tariff below 4 baht per kWh, emphasizing the need to overhaul the country’s power pricing structure. He believes strategically managing Pool Gas is key to unlocking substantial cost savings.
This proposal arrives at a critical juncture for Thailand’s energy sector, balancing affordability and sustainability. While promoting renewable energy remains a crucial long-term goal, the minister’s focus on optimizing existing resources via Pool Gas management offers a potentially impactful short-term solution to alleviate rising electricity costs for consumers and businesses. The coming months will be crucial in determining this novel approach’s feasibility, effectiveness, and ultimate impact on the nation’s energy landscape.
