The Energy Ministry plans to buy 2,000 megawatts of electricity from Myanmar's Myeik coal-fired power project in a bid to strengthen energy security in southern Thailand.
Energy permanent secretary Areepong Bhoochaoom yesterday said the project, in southern Myanmar's Tanintharyi region, would use imported clean coal.
The power plant is expected to take another seven or eight years before it is completed.
"A memorandum of understanding is expected to be signed between the two countries next month, as the Myanmar government has proposed an electricity tariff from the project," Mr Areepong said on the sidelines of an energy seminar hosted by the Economic Reporters Association of Thailand.
However, he said the project was not yet included in Thailand's power development plan.
"Power supply in the South is slightly above demand in the region. That's considered insufficient even though the new Chana gas-fired power unit 2 of 800 MW just began production a month ago, as demand is growing rapidly," Mr Areepong said.
Construction of a new coal-fired power plant with a capacity of 800 MW is preparing to take off and is expected to begin operation in 2019.
At the same event, Thammasat University economist Prof Praipol Kumsap recommended the junta cut excise tax on petrol to four baht a litre from seven baht at present under the energy price reform being considered by the junta.
Meanwhile, excise tax on diesel should resume at no more than four baht a litre compared with 5.30 baht in the past.
The tax was terminated in 2010 to keep diesel prices below 30 baht a litre.
Tax on gasohol E10 and E20 should fall to between 3.20 and 3.60 baht from 5.60 to 6.30 baht, while that of E85 should be cut to 60 satang from one baht.
Prof Praipol said the proposed tax structure would increase the consumption of ethanol fuel, as the lower price would encourage motorists to switch from liquefied petroleum gas (LPG).
As a result, the financial burden on the state Oil Fund through subsidies would be reduced, while the government would gain more tax revenue, he said.
"The government has lost revenue of 100 billion baht each year after the excise tax on diesel was lifted. This amount should be used to expand the rail network to cut energy use as well as subsidies," said Prof Praipol.
He proposed a price for LPG at the same rate of 32.22 baht a kilogramme for the household, industrial and transport sectors, while the price should be capped at 18.13 baht for low-income earners and 28.73 baht for use as feedstock in the petrochemicals sector.
Mr Areepong added that the Energy Ministry would promote investment in biomass, biogas and waste-to-energy projects.
Although the country has lots of industrial waste to generate electricity, it lacks legislation to support this kind of investment.
"Investment in biomass and biogas projects have seen slower growth in recent years, as there are not enough transmission lines to support the increase," said Mr Areepong.
Chen Namchaisiri, vice-chairman of the Federation of Thai Industries, said the electricity supply would become less secure over the next decade if the new government failed to diversify power generation fuels.