Thailand Aims to Become Tech Hub with Massive Power Price Cut
Former Thai Prime Minister Thaksin Shinawatra has unveiled an ambitious plan to dramatically reduce electricity costs, transforming Thailand into a global powerhouse for data centers and artificial intelligence infrastructure. Speaking at a Bangkok business seminar, the de facto leader of the ruling Pheu Thai Party, led by his daughter, Prime Minister Paetongtarn Shinawatra, outlined a vision to slash electricity tariffs by over 25%—from the current 4.15 baht per unit to approximately 2.70 baht—by next year. This aggressive cost-reduction strategy aims to attract substantial foreign investment in data centers and AI.
This proposed price cut is a significant undertaking, given the complexities of Thailand’s energy market. Current tariffs already include subsidies from state utilities, limiting further reductions. Energy regulators have highlighted the challenges, noting that a portion of the tariff reimburses key players such as the Electricity Generating Authority of Thailand (EGAT), PTT, and gas shippers for their contributions to these subsidies. The Energy Regulatory Commission is currently conducting public consultations on potential tariff adjustments for the May-August period, proposing rates ranging from 4.15 to 5.16 baht per unit, depending on reimbursement levels for EGAT and others.
Thaksin’s announcement follows significant investment commitments from global tech giants, including Amazon, Google, TikTok, and Alibaba, for data centers and cloud services in Thailand. He emphasized the importance of clean and affordable energy for securing future investments and maintaining Thailand’s competitive edge. “We want to be competitive in data centers and AI,” he stated, adding that he has been in discussions with numerous potential investors in these sectors. “So we need to have more green energy that’s not too expensive.”
While Thaksin holds no formal position in his daughter’s administration, he is widely perceived as a key architect of the government’s policy direction. He acknowledged the difficulty of achieving the ideal electricity price point of 0.7 to 2.1 baht per unit, sought by some investors, primarily due to Thailand’s reliance on imported fossil fuels and natural gas for power generation. However, he expressed confidence in a phased reduction to 2.50 baht.
Beyond attracting data centers, Thaksin articulated a broader vision for Thailand as a global tech hub. He outlined his aspiration to transform a designated Bangkok area into a centralized location housing data centers from around the world, alongside a dedicated AI hub. This ambitious plan aligns with the surge in foreign investment since the return of civilian rule in 2023, following a decade of military-backed governance. This renewed confidence has spurred investment in various sectors, including electric vehicles, advanced electronics manufacturing, and a range of tech services. Last year, investment pledges from foreign and domestic companies reached a decade-high of 1.14 trillion baht, highlighting the country’s growing attractiveness as an investment destination.
The success of Thaksin’s vision depends on the government’s ability to navigate the complexities of the energy market and deliver the promised electricity price reductions. Achieving this challenging goal could significantly bolster Thailand’s position as a leading hub for data centers and AI, driving further economic growth and technological advancement. However, the potential impact on state utilities and the broader energy sector remains to be seen, and the feasibility of the proposed tariff cuts will undoubtedly face intense scrutiny in the coming months.
