While energy authorities are working on plans to reduce power bills, analysts say free competition in the power trade should be promoted to keep electricity prices low over the long term.
These efforts should be carried out in tandem with accurate projections of future power demand in Thailand, according to Energy Reform for Sustainability (ERS), a group of energy technocrats and experts campaigning for better energy management, including serious government consideration of its proposals.
Earlier the Energy Regulatory Commission's (ERC) proposal to cut electricity bills by 0.17 baht per kilowatt-hour (unit) by changing conditions in contracts made with renewable power firms was rejected by the Council of State because of the legal implications.
The current power tariff, which is used to calculate electricity bills, is 4.15 baht per unit, applicable until the end of April this year.
The ERC wants the government to reduce its spending on the promotion of investment in renewable energy, especially expenses incurred under power purchase agreements (PPAs) made with renewable power plant operators.
The Council of State believes authorities may find if difficult to legally change conditions in the PPAs.
The proposal of Energy Minister Pirapan Salirathavibhaga is now in the spotlight as he floated reducing electricity bills by nearly 0.40 baht a unit through better management of gas, a key fuel for the country's power generation.
Regardless of whether Mr Pirapan's proposal is successful, the ERS still wants the government to come up with more suitable electricity prices for households and businesses over the long term.
FREE COMPETITION
Authorities should push ahead with electricity trade reform by allowing power producers to directly sell to consumers, said Piyasvasti Amranand, a former energy minister and a member of the ERS.
He and other ERS members want authorities to adopt free competition in the power market, enabling supply and demand to determine electricity prices.
The Electricity Generating Authority of Thailand (Egat), state enterprises and power companies should be allowed to carry out power plant development projects and compete with one another to sell electricity to businesses and households.
This would lead to more suitable electricity prices for users, said Mr Piyasvasti.
"Electricity prices can be reduced by opening up the market because total electricity generation capacity is high," he said.
Thailand's power generation capacity in reserve was 25.5% of total capacity at the end of last year, said Veerapat Kiatfuengfoo, deputy energy permanent secretary.
He said the tally is much less than 50%, which some energy advocates proposed.
Under free power trade, energy authorities can earn revenue by adopting the Third Party Access Code, where a wheeling charge is imposed on electricity trade, said Mr Veerapat.
This refers to a fee collected from the use of state transmission lines to deliver renewable power.
Free competition in the power market means abandoning the decades-old enhanced single buyer (ESB) model. ESB allows Egat to be the single buyer that sells electricity to the public.
This does not facilitate power trade among companies that want to use more renewable energy, according to ERS.
If power companies want to sell electricity produced by renewable resources, they are required to sell it to Egat and state power distribution agencies, which then distribute electricity through their grids to companies and households.
Power companies are allowed to directly sell electricity to the industrial sector under private PPAs, but only fossil fuel-based electricity is traded.
DEMAND DOWNGRADE
The ERS also proposed the government downgrade its forecast for electricity demand in the 2024 power development plan (PDP).
The PDP, which covers 2024 to 2037, expects power demand in Thailand to increase to 112,391 megawatts by 2037, up from 51,000MW in 2024.
Implementation of the PDP is delayed because of disagreements among some energy analysts, though the plan already passed a public hearing last year.
Mr Piyasvasti said Thailand's projected power demand over the next 13 years is too high, which will result in launching unnecessary power plant development projects.
Higher expected power demand in the future will lead to investment to expand the country's electricity generation capacity or build new power plants, he said.
"It is not a good idea to make new investments based on this power demand projection. The government will incur more costs, eventually increasing power bills," said Mr Piyasvasti.
As a result, businesses and households will suffer a greater financial burden.
Many businesses and households are already less dependent on electricity from the state grid because they installed rooftop solar panels, reducing demand from the grid, he said.
The economic impact of the pandemic, which continues to this day, must be factored in to the demand calculation to determine a more appropriate figure, said Mr Piyasvasti.
The new PDP is designed to promote greater use of clean power, which includes nuclear power.
Under the plan, renewable energy is set to comprise 51% of total fuel use by 2037, up from 20% at the end of 2023, while coal and gas should fall to 48%, down from nearly 80% as of early 2024.
The other 1% comes from nuclear energy and new energy solutions aimed at reducing fossil fuel usage and saving electricity.
