Despite cheaper oil, a weaker baht and fixed prices for renewable energy will see the cost of electricity remain unchanged following the next fuel tariff (ft) adjustment in May, says the Energy Regulatory Commission (ERC).
ERC commissioner Viraphol Jirapraditkul said electricity charges were expected to be lower, with natural gas prices having declined by six baht per million cubic feet per day in line with the lower global oil price. Due to multiple factors, however, the ERC estimates that the ft will remain unchanged.
The country's ft is reviewed by the ERC every four months with the next round starting in May, when most people expect to see their power bills decline in line with the price of oil.
Viraphol: Part of energy cost is fixed
The current ft charge on electricity bills from January to April is set at 3.707 baht per kilowatt hour, down from 3.723 baht on average.
Mr Viraphol said one of the major factors are subsidies for renewable energy operators which have been provided by the Energy Ministry for years, primarily to solar power, which has a combined capacity of 1,500 megawatts in Thailand.
The Energy Ministry projects a demand for electricity this year at 28,470 MW, a 4% rise over last year.
Since renewable and alternative energy are currently not commercially viable without government support, policymakers have provided subsidies to encourage the development of green energy.
This has resulted in fixed costs for subsidised operators supplying the country's sole power seller, the state-run Electricity Generating Authority of Thailand, said Mr Viraphol said.
"So no matter how much the price of oil falls, a part of the power cost is fixed," he added.
Another major factor is the depreciation of the Thai baht since last year, affecting the cost of natural gas, which is priced in dollars.
"This is a serious matter, because we are currently using natural gas as major source of power generation. While the baht was strong, we got an advantage from this, and now that the baht is weak, we have to take on that burden, said Mr Viraphol.
Meanwhile, the upcoming drought has caused the country to cut back on power generated from hydroelectricity.
In 2015, Thailand used natural gas to generate around 64% of its total power output; coal generated 19%; hydropower accounted for 4%; oil was at 1%; while renewable energies accounted for the rest.
The price subsidy for renewables has pushed the ft to hike by 18 satang per kWh (unit), while the depreciation of the baht had also caused an increase.
Mr Viraphol said, however, lower global oil prices had cut the ft charge rate four times in a row since the third quarter of 2014, resulting in a combined ft reduction of 24 satang per unit.
In a related development, the national oil and gas conglomerate PTT Plc yesterday said it will shut down four natural gas fields for maintenance.
Executive vice-president Noppadol Pinsupa said the annual shutdown is generally scheduled to coincide during a time of relatively lower electricity demand.