Thailand's energy shift demands open markets, more renewables
Kongpob Areerat
13 May 2024 at 12:59
BANGKOK, THAILAND — Thailand’s awaited new Power Development Plan (PDP) will be finalized by the second quarter of this year, aiming to increase renewable energy between 2024 and 2037.
Prasert Sinsukprasert, the permanent secretary of the Ministry of Energy, recently told reporters that the new PDP would align with Thailand’s climate change goal to achieve carbon neutrality by 2050. The plan throws its weight behind alternative energy sources over fossil fuels — with a proposed ratio of 70% to 30%.
The PDP is part of the National Energy Plan (NEP) — the country’s blueprint for energy management from 2023 to 2037. It consists of five plans: a power development plan, alternative energy development plan, energy efficiency plan, oil plan and gas plan.
In tandem, a responsible government body is reworking the NEP to make 50% of electricity in Thailand from renewable energy sources by 2037. The new NEP will give Thailand new energy sources like hydrogen fuel and small nuclear reactors.
In addition, the new PDP boosts the country’s policy to phase out fossil fuels like coal and gas power plants.
The new PDP — or even NEP — attests to Thailand’s bid to have its energy readjusted. Thailand has always relied on fossil fuels — mainly coal and gas. In past years, the government has capped coal consumption.
Nevertheless, the country still relies heavily on gas. Currently, two-thirds of electricity is produced by gas-fired power plants, according to information from the Energy Policy and Planning Office (EPPO).
Some 17% of electricity comes from coal-fired power plants while 12% of electricity is imported from either hydro-power or coal-fired power plants in neighboring countries such as Laos and Myanmar. Another 10% of electricity is powered by cheap bunker oil and another 10% from renewable energy — mainly solar-power plants.
In terms of natural gas, the government has tried to reduce its lopsided use of natural gas. In the old days, natural gas was a rational choice as Thailand’s reserves in the Gulf of Thailand were plenty.
Later, the country had to use imported natural gas to run power plants after its reserves ran low. Since 2019, Thailand’s liquefied natural gas (LNG) imports have surged by 127%.
The Thai government has affirmed its commitment to ensuring that renewable energy constitutes at least 50% of new power generation capacity by 2050.
According to the Long-term Low Greenhouse Gas Emission Development Strategy (LT-LEDS), the proportion of renewable electricity is anticipated to rise to 68% by 2040 and further to 74% by 2050, aligning with the nation’s objective of achieving carbon neutrality.
Apart from switching to green and clean fuel, the changing energy plan also promotes the use of new innovations such as carbon dioxide capture and storage (CCS) at fossil-fuel power plants and gas turbines capable of using a blend of natural gas and carbon-free green hydrogen.
The new plan also introduces carbon offset-ting through Land Use, Land-Use Change, and Forestry (LULUCF), which is carbon emission offsetting by planting trees and climate change-friendly land use.
Thailand’s new PDP and related energy plans clearly show the country’s commitment to reducing emissions. The big question is whether or not such lofty goals can be met, and whether or not the country can overcome its inconsistent action plans and bureaucracy.
While the new PDP calls for the “phasing out” of mainstream power plants, the Electricity Generating Authority of Thailand (Egat) is still signing deals to buy electricity from natural gas-powered plants amid the ongoing approval of new gas power plant construction.
These plants, with an average lifespan of 20-25 years, will chain the country to natural gas dependency — and imported natural gas for decades.
The ongoing deals will not only put the country at risk of oscillating natural gas prices. They will also affect consumers.
Every power purchase deal that Egat signs with power producers includes an “availability payment” (AP) cost, which is transferred to consumers through their electricity bills and further raising electricity prices in addition to the impact of LNG price hikes. So when the price of natural gas rises, so do consumers’ electricity bills.
JustPow, a coalition advocating for fair and sustainable energy transition, has urged the government to steer clear of buying electricity from big energy firms and supporting small businesses that sell clean energy.
JustPow — consisting of Data Hatch, Epigram, Greenpeace Thailand, JET in Thailand, and Rocket Media Lab, also wants Egat to stop signing deals to buy electricity produced by new fossil fuel power plants or large hydro-electric dams in neighboring countries. The group argues that the country’s energy reserve is in surplus.
The group also wants the government to restructure the cost of natural gas by letting the energy sector access the use of natural gas reserves from the Gulf of Thailand which is currently being consumed mostly by the petrochemical industry.
It argues that the industry should not receive preferential treatment over ordinary Thai consumers in accessing cheaper gas from Thailand and neighboring Myanmar.
Energy saving is also a path to net zero. Unfortunately, Thai governments have not taken this cleaver measure seriously.
Sarinee Achavanuntakul, head researcher at Fair Finance Thailand, emphasized the importance of prioritizing energy efficiency.
“In almost every country, if we look at how they manage their energy and what they prioritize the most, many countries will say they prioritize energy efficiency,” said Sarinee.
“Because economically, it has been proven without requiring further data that it is most cost-effective. If we can increase energy efficiency, it means we don’t need to build new power plants or increase production capacity
Furthermore, authorities should implement a net metering system to promote the expansion of clean electricity.
This system would enable households to offset their electricity costs by utilizing electricity generated from their rooftops, in contrast to the current “net billing” system where households selling excess electricity to the government receive lower prices than they pay for it.
Chariya Senpong, head of the energy transition campaign at Greenpeace Thailand, said Egat needed to buy renewable energy. Greenpeace estimates that renewable energy in Thailand can produce 35,000 megawatts.
“But the government is only purchasing 100 megawatts per year, which goes against that potential. It cannot lead to an energy transition at that rate,” she said.
In terms of transmission, the current government policy doesn’t support market accessibility.
Access to transmission systems and grids is controlled by Egat, which only sells electricity to two state utilities and a few private firms. Thailand should transition towards a more open electricity system, where power producers participate in auctions to sell electricity to retailers at the wholesale market level.
Retailers, including state-owned enterprises like the Metropolitan Electricity Authority and Provincial Electricity Authority, alongside private retailers and individual household electricity producers, can compete to sell electricity to consumers.
This arrangement offers consumers the flexibility to choose their electricity provider either through a trading platform or directly, without intermediaries.
Shifting away from gas power plants poses challenges due to their current prevalence in Thailand’s energy sector.
The government can facilitate this transition by establishing a transparent plan to harness renewable energy sources and by fostering fair competition in the energy market. This will ensure that Thailand will remain competitive amidst the global push towards a low-carbon economy.
This commentary was first published in the Bangkok Post by Climate Finance Network Thailand,  a Bangkok-based think tank based in Bangkok committing to advancing sustainable financial practices and fostering a low-carbon economy transition.
Kongpob Areerat is communicator and researcher at Climate Finance Network Thailand. 
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