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Cheaper electricity from cheaper oil?

An offshore natural gas platform. Natural gas is the major source of power generation in Thailand. When the baht becomes less valuable (depreciates) this helps exports but hurts imports such as natural gas, making them more expensive.

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Electricity prices will not fall soon due to: 1. a weaker baht and 2. renewable energy subsidies. Learn how these two factors work their way into your monthly electricity bill.

ENERGY

Cheaper electricity with cheaper oil? 

12/02/2016
Yuthana Praiwan

Oil prices have been falling, so electricity prices will also fall soon, right?

Wrong, says the Energy Regulatory Commission (ERC).

Despite cheaper oil, two factors, 1. a weaker baht and 2. fixed prices for renewable energy means the cost of electricity will remain unchanged the next time electricity prices are adjusted in May.

ELECTRICITY GENERATION

First, here is some background information about electricity generation in Thailand.

The state-run Electricity Generating Authority of Thailand (EGAT) is the country's sole power seller.

The Energy Ministry projects demand for electricity this year at 28,470 MW, a 4% rise over last year.

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 (see list of power stations in Thailand here).

Natural gas prices have fallen by six baht per million cubic feet per day in line with the lower global oil price.

The ongoing drought has caused the country to cut back on power generated from hydroelectricity.

FUEL TARIFF

The fuel tariff (ft) is a charge on your monthly electricity bill that represents the contribution to the price of electricity of "fuel" , the raw materials used to generate electricity: natural gas, coal, hydropower, oil, solar and wind.

The current fuel tariff charge on electricity bills from January to April is set at 3.707 baht per kilowatt hour, down from 3.723 baht on average.

Lower global oil prices have cut the fuel tariff charge four times in a row since the third quarter of 2014, resulting in a combined fuel tariff reduction of 24 satang per unit in your monthly electricity bill.

The country's fuel tariff 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.

GOVT RENEWABLE ENERGY SUBSIDIES

A govt subsidy for renewable energy has pushed the fuel tariff up by 18 satang per kWh (unit).

Since renewable energy is currently not commercially viable without government support, policymakers have provided subsidies to encourage the development of green energy.

The biggest renewable energy subsidy is for solar power which has a combined capacity of 1,500 megawatts in Thailand.

No matter how much the price of oil falls, there will still be a subsidy for renewable energy in your electricity bill every month.

DEPRECIATION OF THAI BAHT

The depreciation of the baht has also increased the fuel tariff.

The depreciation of the Thai baht since last year has caused the cost of natural gas to rise because it is priced in dollars.

Natural gas is the major source of power generation in Thailand.

While the baht was strong, Thailand got an advantage from this in buying natural gas for electricity and now that the baht is weak, Thailand will have to take on the burden of paying extra for that natural gas.

http://www.bangkokpost.com/business/news/861512/cheap-oil-will-not-lower-power-price

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Vocabulary:

accounted for : all the things or people who should be there are now there -

adjust : to change something slightly, especially to make it more correct, effective, or suitable - ปรับ

advantage : a benefit; a good feature or quality that something has - เป็นประโยชน์, เป็นคุณ, เป็นผลดี

burden : a serious or difficult responsibility that you have to deal with - ภาระ

charge (noun): a payment or fee for something - ค่า

coal (noun): a hard black substance that is dug from the ground and burned as fuel to provide heat - ถ่านหิน

combined : counted together - รวมกัน

commercially : for business purposes - สำหรับการค้า

commission : a group of people who have been formally chosen to discover information about a problem or examine the reasons why the problem exists - คณะกรรมการ, คณะกรรมาธิการ

contribution : the part or percentage of the total that comes from some person or source -

currently : at this time; now - ในปัจจุบัน

cut back (verb): reduce, decrease - ลดลง, ทำให้น้อยลง

demand (noun): the need and desire of people to buy goods - อุปสงค์

depreciation : decrease in the value of a currency -

despite (prep): used to show that something happened or is true although something else might have happened to prevent it; used to show that somebody did not intend to do the thing mentioned - ถึงอย่างไรก็ตาม, ทั้ง ๆ ที่

development : the gradual growth of something so that it becomes more advanced, stronger, etc - การพัฒนา

drought (noun): a long period of time when there is little or no rain - ฝนแล้ง, ภัยแล้ง, ความแห้งแล้ง)

Electricity Generating Authority of Thailand (Egat) : the state enterprise - รัฐวิสาหกิจ) that owns and manages the majority of Thailand's electricity generation capacity, as well as the nation's transmission network. การไฟฟ้าฝ่ายผลิตแห่งประเทศไทย

encourage : to make someone more likely to do something, or to make something more likely to happen - ปลุกใจ

factor : a fact or situation which influences the result of something - ปัจจัย

fuel : any material that produces heat or power, usually when it is burnt - เชื้อเพลิง

generate : produce electricity - กำเนิดไฟฟ้า

generate : to produce - ผลิต, ก่อให้เกิด

green : environmentally friendly, good for the environment -

hydroelectricity : electricity generated using rivers -

hydropower : power generated by running water - พลังน้ำ

in a row (idiom): straight; consecutive; happening one after the other, without interruption - ต่อเนื่อง

in line with : following a rule or system; also in accordance with and consistent with - สอดคล้องกับ

major : very large or important - สำคัญมาก

matter : a situation or subject which is being dealt with or considered - เรื่อง, ภารกิจ, งาน

ministry : a government department that has a particular area of responsibility - กระทรวง

natural gas : the gas used for cooking, power generation and car fuel in Thailand - แก๊ซธรรมชาติ

on average : calculated by adding several amounts together, finding a total, and dividing the total by the number of amounts - โดยเฉลี่ย

ongoing : happening at the present moment; continuing - ไม่หยุดยั้ง, ต่อเนื่อง

output : the amount of something produced - ปริมาณ(กระแสไฟฟ้า)ที่ผลิตขึ้น

power (noun): energy from electricity - พลังงาน, พลังงานกล,พลัง, กำลัง, แรง

project : to make a calculation or guess about the future based on information that you have - คาดคะเน

quarter (noun): three months of the year on the official calendar of the government or companies - ไตรมาส

raw material : a basic material that is used to make a product - วัตถุดิบ

reduction : the process or result of making something smaller or less in amount, size, importance etc - การลดลง

regulatory (adj): related to "regulations" , official rules on how to do different activities, usually made by the government - ซึ่งควบคุมบังคับ, ซึ่งมีอำนาจควบคุม

renewable energy (noun): forms of energy for generating electricity that will not run out such as solar or wind power - พลังงานหมุนเวียน หรือพลังงานใช้ไม่หมด [ได้แก่ พลังงานแสงอาทิตย์ เราสามารถเปลี่ยนพลังงานแสงอาทิตย์มาเป็นพลังงานไฟฟ้าโดยอาศัยเซลล์แสงอาทิตย์ (Solar cell) พลังงานน้ำ เราสามารถแปรรูปพลังงานศักย์จากน้ำเพื่อนำมาเป็นพลังงานกล เช่น ใช้แรงของน้ำหมุนกังหันผลิตไฟฟ้า พลังงานลม โดยการใช้กังหันลมหมุนเครื่องจักรกลต่างๆ เครื่องสูบน้ำ เครื่องบดธัญพืช เป็นต้น พลังงานจากมวล ชีวภาพ เช่น มูลสัตว์และก๊าซชีวภาพ พลังงานจากการเผาไม้ กระดาษ ฟืน แกลบ กากชานอ้อย และ ที่เรียกว่า พลังงานใช้ไม่หมดก็เพราะสามารถหามาทดแทนได้ เช่น ปลูกป่าเอาไม้มาทำฟืน หรือปล่อยน้ำจากเขื่อนมาปั่นไฟ หรือแสงอาทิตย์ที่ได้รับจากดวงอาทิตย์อย่างไม่มีวันหมดสิ้น ดังนี้เป็นต้น [ปิโตรเลี่ยม]]

represent : to be an example or expression of something - แสดงให้เห็น, เป็นเครื่องหมายของ

round : one of a series of events, activities, etc. - รอบ

solar : involving the sun - เกี่ยวกับดวงอาทิตย์

sole : only - เดี่ยวๆ

state-run : government operated - ที่รัฐเป็นเจ้าของ

subsidy : an amount of money that a government or organisation pays to help to reduce the cost of a product or service - เงินชดเชยที่รัฐเป็นผู้จ่ายให้

support : to give help, encouragement or sympathy to somebody - สนับสนุน, เป็นกำลังใจ

tariff (noun): a list of fixed prices that are charged by a company for services or a hotel or restaurant for rooms, meals, etc - ราคา

the rest : the remaining amount, outside of what has been used - ส่วนเหลือ

viable : able to work as intended or able to succeed - ซึ่งใช้การได้ (แผนการ, คำแนะนำ) ซึ่งประสบผลสำเร็จได้

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