Ministry urged to cut power reserve
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Ministry urged to cut power reserve

Advocates say the capacity greatly exceeds the global standard and Egat should play a greater role

Better management of Thailand's power generation capacity in reserve can help the government ease expensive power bills.
Better management of Thailand's power generation capacity in reserve can help the government ease expensive power bills.

Energy advocates are demanding the Energy Ministry reduce the country's huge surplus of power generation capacity in reserve as part of efforts to curb a surge in power bills in 2023.

The current reserve stands at almost 50% of total capacity, much higher than the internationally accepted reserve of 15-20%, according to their estimate.

A high reserve increases electricity generation costs, which are also driven by the import of expensive liquefied natural gas for use as fuel.

Prices of key fuels are expected to increase in 2023, with the average price of gas pool in Thailand forecast to rise by 17% to 564 baht per metric million British thermal unit, imported coal projected to soar by 27% to 5,165 baht per tonne, and diesel picked to rise by 14% to 31.9 baht a litre.

As a result the power tariff, which determines electricity bills, will also rise.

The Energy Regulatory Commission (ERC) announced last month it plans to increase the power tariff for businesses by 20.5% to 5.69 baht per unit, up from 4.72 baht per unit, a move that sparked a call among entrepreneurs to reconsider the decision.


Rosana Tositrakul, an energy advocate and former Bangkok senator, wants the government to reduce the power generation capacity in reserve by buying less electricity from private power plant operators.

The state-run Electricity Generating Authority of Thailand (Egat) should play a larger role in producing electricity, she said.

Power generation capacity can serve demand without considerably increasing the power reserve, said Ms Rosana.

Electricity consumption during the peak day last year, on April 28, was 33.17 gigawatts, much lower than the national capacity of 55GW.

In other months when the weather was not as hot, consumption ranged from 26-29GW.

Given this amount of power usage, she said it is not necessary for Egat to sign more power purchase agreements, each lasting 25 years, with companies as the deals commit Egat to pay for electricity for the whole period. This is known as an "availability payment" (AP), though the actual usage may be less during the agreed upon time frame.

An AP ensures electricity is always available to avoid blackouts, but it increases the power tariff.

Ms Rosana said if more power generation is operated by Egat, authorities will not spend so much on APs to energy firms, most of which are listed on the stock market.

In 2022, Egat remitted 28 billion baht in AP payments to these companies, she said.

Some 30 years ago, Egat took full control of electricity generation, but later allowed the private sector to produce electricity under the enhanced single buyer model, in which Egat is the sole buyer that sells electricity to the public.

One option to reduce expensive power bills is to give Egat greater control of power generation, said Ms Rosana.

"Egat is a state enterprise working for society, not investors in the stock market. It does not need to make a lofty profit like listed companies, so power bills can be cheaper," she said.


Allowing too many energy firms to jointly produce electricity can put Egat at risk of infringing the charter, according to energy analysts.

Section 56 of the 2017 constitution stipulates Egat's power generation must make up at least 51% of total supply in the country.

Egat's generation proportion tallies 32%, said Pongdit Potchana, former chief executive of SET-listed Ratch Group, a subsidiary of Egat, citing statistics from January 2022.

He believes this proportion already violates the law, but ERC has not held serious discussions about an appropriate power generation percentage for Egat, though it should be a crucial issue for the country, said Mr Pongdit.

He predicts Egat has lost around 50 billion baht a year since its proportion declined from 51%. If the government takes no action, allowing the electricity generation proportion of the private sector to increase, national energy security will be affected, said Mr Pongdit.

More private power producers mean more expensive power bills, said Preecha Kornpreecha, vice-chairman of Egat's labour union.


Energy Minister Supattanapong Punmeechaow said he believes Thailand's power generation capacity in reserve looks high because the calculation is based on installed capacity of all power plants.

Solar and wind energy may produce electricity for only 4-5 hours a day, which is below their installed capacity. In fact, the reserve in Thailand only stands at 35%, said Mr Supattanapong.

"We need to keep the reserve at high levels because of global economic uncertainties we cannot control," he said.

It is better to ensure the country has enough electricity for use because developing a power plant usually takes more than six years, said Mr Supattanapong. There are many steps in the process, ranging from a study and state approval to construction.

"During those six years, it's difficult for us to predict what will happen to the economy," he said.

Authorities plan to add new power generation facilities, with annual capacity of only 100-200 megawatts, over the next few years, using renewables to cut greenhouse gas emissions, said Mr Supattanapong. It will take 5-7 years to reduce the reserve levels from 35% to 15-20%, he said.

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