Manufacturers urged to adopt renewables

Higher power bills will be a key factor awakening businesses in the manufacturing sector to a need to seriously adopt renewable energy to relieve an increase in their production costs, estimated at 4.88% on average, says the Industry Ministry.

The Energy Regulatory Commission can only slightly reduce a planned increase in the power tariff, which is used to calculate electricity bills, from 20.5% to 13%, although the business sector demanded a larger reduction in order that they might better control their financial burden.

The new tariff is effective as of January to April this year.

"One solution to expensive power bills is a shift towards renewable energy," said Warawan Chitaroon, director-general of the Office of Industrial Economics (OIE).

Using renewable energy, such as solar and biomass power, could be carried out in tandem with better management of electricity usage, including the use of natural sunlight and light-emitting diode (LED) controlled by a sensor system in workplaces, she said.

LED is known for requiring a lower amount of electricity than fluorescent lights do.

The government is aware that higher electricity prices will deal a blow to businesses, especially those competing with companies overseas, said Mrs Warawan.

According to the OIE, the 13% increase in the power tariff, from 4.72 baht per kilowatt-hour (unit) to 5.33 baht per unit, will result in a variety of increased manufacturing costs, depending on the sector.

The steel and iron industry will see its costs rise by 12.4%, followed by the cement industry (9.47%), garments and textiles (8.96%), concrete (8.14%), clothing (7.98%) and ceramic (6.49%).

Thailand's fuel tariff (Ft) is relatively high compared with those of neighbouring countries. The OIE said earlier Thailand is ranked third for the highest Ft rates in Asean, behind Singapore and the Philippines. Previously Thailand was ranked fourth after Cambodia.

Ft is an key element in power tariff. It is determined by the prices of fuels used for power generation in Thailand.

Kriengkrai Thiennukul, chairman of the Federation of Thai Industries, said earlier Thailand's Ft is higher than that of Vietnam.

High energy prices may cause foreign investors to delay investment plans in Thailand. Some investors that signed investment agreements with Thai firms decided to cancel the deals due to this problem, he said.