The Energy Regulatory Commission (ERC) plans to allow the state-run Electricity Generating Authority of Thailand (Egat) to distribute liquefied natural gas (LNG) locally, instead of importing to feed Egat's power plants.
Egat is the second LNG importer after PTT Plc, the national oil and gas conglomerate. Both LNG import licences were granted by the ERC.
For Egat's licence, the ERC set a condition that Egat can be an LNG importer through third-party access to provide gas for its power plants.
But the condition does not match the current economic situation with limited demand for gas in the power sector. As a result, Egat cannot import LNG as planned, expecting to bring in 1.5 million tonnes and concluding the procurement process.
ERC chairman Samerjai Suksumek said the condition needs to change, with eased limitations.
"The existing condition does not allow Egat to sell LNG, limiting it to feeding Egat's power plants," he said.
According to the ERC, once Egat makes the massive LNG purchases, they cannot be fed to generate the power, resulting in a "take or pay" situation.
"Otherwise, the LNG stock is an operating cost and Egat will have a financial burden under the import contract," Mr Samerjai said.
He said the take-or-pay contract is also a provisional payment, noted in the contract, whereby Egat is obligated to take LNG deliveries and pay a specified amount.
The 1.5-million-tonne supply of LNG imported by Egat is to be stored at a receiving terminal in Map Ta Phut, Rayong at the facility of PTTLNG Co.
On May 10, Egat announced that it had selected a winning bidder -- Malaysia's Petronas LNG Ltd -- to be the LNG importer and supplier for Egat's power plants.
But Egat had yet to proceed with its LNG imports until now.
"The ERC will allow Egat to trade the LNG, and it will be a better solution than purchasing with the take-or-pay contract," Mr Samerjai said. "Moreover, Egat has selected the winning bidder with an offer of a lower price for LNG purchasing."
Separately, the ERC plans to issue a regulation to prescribe owners of solar panels for the legal responsibility of retired or defunct solar panels, effective next year.
Mr Samerjai said that while recycling factories of solar panels have yet to start construction and solar panels are aged up to 25 years, the ERC has to prepare measures in light of the possibility of environmental risk.
Moreover, the ERC will amend some conditions for the government's household solar rooftop scheme after witnessing low applications from property owners.
Since the scheme launched in May, the ERC has received 227 participants, with a combined power generation of 1.244 megawatts, far lower than the ERC's target of 100MW in 2019.
The amended conditions are likely to include an increase in the selling price of surplus electricity, now at 1.68 baht per kilowatt-hour. But the ERC has yet to conclude a final price.