Measures to Reduce Electricity Costs for the Long Term Urged by Consumer, Political, and Private Sector Council
The “Council of Consumers – Politicians – Private Sector” has united, highlighting that short-term solutions to reduce electricity costs will not address the underlying issue. The council urges “Seththa” to adjust the natural gas cost structure, cancel contracts with large power plants, reduce electricity purchase from neighboring countries, and encourage the use of clean energy. The goal is to alleviate cost burdens on the population in the long run.
In response to the Cabinet’s decision on September 18, 2023, which announced a reduction in electricity costs from 4.10 baht per unit to 3.99 baht per unit for the billing cycle from September to December 2023, the Consumer Council held a discussion forum titled “Electricity rates must be fair and sustainable”. The forum aimed to explore ways to ensure fair and sustainable electricity pricing.
Ms. Rosana Tositrakul, a member of the Sub-Committee on Public Services, Energy, and Environment at the Consumer Council, emphasized that the government’s measures to lower electricity prices only offer temporary relief and are not viable in the long-term. She explained that the reduction in electricity costs is dependent on two agreements. The first agreement extends debt payments to the Electricity Generating Authority of Thailand (EGAT) and allows EGAT to bear the debt initially. The second agreement requests PTT Public Company Limited to defer full cost collection for natural gas, ultimately burdening the public in the future. Therefore, once these measures expire, electricity bills will return to their previous expensive rates.
Ms. Rosana further presented three long-term solutions proposed by the Sub-Committee on Public Services at the Consumer Council to address the electricity cost problem:
- The First Minister, as chairman of the National Energy Policy Committee (NEPC), should expedite efforts to rectify the fuel cost structure. Specifically, the price of natural gas should be based on the gas pool price, which takes into account the average price of gas from the Gulf of Thailand, gas from Myanmar, and imported liquefied natural gas (LNG) based on world market prices. This adjustment will reduce electricity generation costs and subsequently lower electricity prices by 40 billion baht per year.
- The government should terminate contracts with large power plants, particularly those that extend for 20-25 years and involve the purchase of electricity from foreign countries. Thailand currently produces up to 50,000 megawatts of electricity but only consumes 30,000 megawatts. Therefore, such long-term contracts are unnecessary and contribute to the burden of electricity costs.
- The government should promote the use of clean energy by enabling individuals to become electricity producers through solar energy. This can be facilitated by installing solar cells on roofs, ultimately relieving the cost burden on the population.
Regarding the revision of the fuel cost structure, Ms. Rosana pointed out the discrepancy between power producers’ use of expensive gas, including imported LNG, compared to the petrochemical industry, which utilizes cheaper gas sources such as those from the Gulf of Thailand and Myanmar. To achieve fairness, she urged the government to adopt a gas pool pricing system, ensuring both sectors pay an equal price for gas. This adjustment could result in an annual budget reduction of 40 billion baht, equivalent to a 20 satang per unit decrease in electricity costs, ultimately creating a fair and sustainable electricity price.
Ms. Rosana also emphasized the negative implications of long-term contracts with large power plants, referring to them as future “Waste power plants”. Research from Stanford University suggests that within the next 10 years, clean energy alternatives will enable electricity to be priced at 1 baht per unit, significantly lower than the contracted price of 3-9 baht per unit for these power plants. Therefore, entering into long-term contracts becomes a burden on future electricity costs. To ensure affordability, Ms. Rosana stressed the necessity of a structural correction in the fuel price framework.
Mr. Supachote Chaiyasat, MP for the Kao Klai Party, echoed these sentiments, asserting that the government’s measures to reduce electricity prices are merely short-term solutions. He highlighted the party’s previous proposal to adjust the natural gas price structure by averaging the costs of cheap and expensive gas sources. Additionally, he suggested revising power purchase agreements to address excess reserve power and negotiating contract amendments to reduce associated costs.
Mr. Issares Rattanadilok Na Phuket, Vice President of the Federation of Thai Industries, concurred with these viewpoints, stating that the measures to reduce electricity costs are temporary and lack a structural solution. He emphasized the importance of adjusting the energy structure to ensure fairness and alleviate consumer burdens. He further recommended liberalizing the import of natural gas, enabling the importation of affordable gas and increasing the proportion of renewable energy in Thailand’s power development plan for a sustainable solution to consumer electricity prices.
The establishment of a joint private sector energy committee, including consumer advisors, was proposed by the Private Sector Joint Committee Organization (FRA), comprising the Chamber of Commerce and the Federation of Thai Industries. This committee aims to address energy problems comprehensively with the involvement of private energy sector representatives.
The “Council of Consumers – Politicians – Private Sector” united in noting that measures to reduce electricity costs only solve short-term problems, urging “Seththa” to adjust the cost structure of natural gas. Cancel a contract for a large power plant Reduce the purchase of electricity from neighboring countries. Recommend using clean energy instead. Hope to reduce the cost burden of the people in the long term.
From the decision of the Cabinet on September 18, 2023 which announced a reduction in electricity costs from 4.10 baht per unit to 3.99 baht per unit in the September – December 2023 billing cycle in order to solve the problem of high electricity costs and reduce the cost burden. of the people. that
On October 6, 2023, the Consumer Council organized a discussion forum on the subject “Electricity rates must be fair = fair and sustainable” through the program. We don’t eat grass as food. Published on the Council of Consumer Organizations page and YouTube. Find ways to make electricity prices fair and sustainable
Ms Rosana Tositrakul, Sub-Committee on Public Services, Energy and Environment, Consumer Council, said that the government’s measures to reduce electricity prices are only temporary measures. and it cannot be done in the long term This is because the reduction in electricity costs has occurred under two agreements as follows: 1. Request to extend debt payment to the Electricity Generating Authority of Thailand (EGAT) and allow EGAT to bear’ debt first 2. Request to PTT Public Company Limited not to collect the full price for natural gas. All costs will be collected from the public at a later date. When this measure ends Electricity bills will be as expensive as before.
Ms. Rosana further stated that the Sub-Committee on Public Services, Consumer Council, therefore has a proposal to the government regarding 3 long-term solutions to the problem of electricity costs as follows:
1. The First Minister, as chairman of the National Energy Policy Committee (NEPC), should speed up the work of correcting the fuel cost structure. In particular, the price of natural gas is changed to the price of the gas pool. (Average price of gas from the Gulf of Thailand + gas from Myanmar + imported liquefied natural gas or LNG based on world market prices) because gas is the main fuel for electricity generation Reducing the cost of electricity generation will help reduce electricity costs. 40 billion baht per year.
2. Ask the government to cancel contracts with large power plants. which has a period of around 20 – 25 years, especially when making contracts to buy electricity from foreign countries This is because Thailand currently has an excess of electricity because it produces up to 50,000 megawatts of electricity but in fact using only 30,000 megawatts of electricity.
and 3. The government should encourage people to use clean energy by giving people the opportunity to become electricity producers from solar energy. By installing solar cells on the roof of the house. Helping to reduce the cost burden for the people.
For the issue of revising the fuel cost structure Ms Rosana explained that Currently, power producers must use more expensive gas costs to produce electricity, including imported liquefied natural gas (LNG) based on the market prices of the world As a result, consumers must use electricity at a higher price than they should. while the petrochemical industry It uses natural gas at a cost from cheaper gas sources, such as gas from the Gulf of Thailand and gas from Myanmar. Therefore, if the government adjusts the structure to the price of a gas pool, that is, it petrochemical groups and power producers use gas at a price that is equal This will allow the country to have a budget to reduce electricity costs by 40 billion baht per year, or it can reduce electricity costs by 20 satang per unit. This approach will create a fair and sustainable electricity price.
Regarding the cancellation of contracts with large power plants, Ms. Rosana information that long-term contracts with large power plants will make them “Waste power plants” in the future, because research from Stanford University found that within 10 years, or around 2030, it will be possible to buy electricity from clean energy, within no more than 10 years. The cost of electricity will be 1 baht per unit, while power plants that the government has contracted to buy will be priced at 3 – 9 baht per unit. Therefore, entering into a long-term contract to buy electricity for 25 years at a time. becomes a burden on people’s electricity costs in the future.
“Reducing electricity prices is just a very short-term measure that politicians want people to be happy about. But the price of electricity will not be cheap forever. Because there is no structural correction. So, if the government is sincere, the fuel price structure must be set in order to make electricity prices cheap and sustainable,” said Ms Rosana.
In addition to Mr. Supachote Chaiyasat, MP for the Kao Klai Party, said that the government’s measures to lower electricity prices are only short-term measures that want to show the people that they have followed the policy announced immediately. But there are no long-term solutions. In the past, the Kao Klai Party has submitted a proposal to solve the long-term problem of electricity costs to the Minister of Energy. by proposing to adjust the natural gas price structure This is the main cost of electricity production by averaging the cost of cheap gas sources currently available to business groups. Used together with expensive gas sources To reduce the cost of electricity production.
In addition, it is proposed to amend the power purchase agreement to reduce the availability payment due to the problem of excess reserve power. Currently, Thailand has an electricity reserve of up to 50 percent and there are many power plants that do not operate to produce electricity but the government has to pay to buy electricity according to the contract . Therefore, the government should negotiate to amend the contract and reduce such costs.
Including signing contracts for large power plants for first review. This is especially true in the case of signing electrical contracts from foreign countries. For example, in the case of the contract to buy electricity from the Pak Beng Dam from Laos. That has caused doubts from the public sector about the need to build such a dam. which will have a long-term monopoly contract of almost 30 years, which may be a burden on people’s electricity bills in the future
Mr. Issares Rattanadilok Na Phuket, Vice President of the Federation of Thai Industries He said in the same way: Measures to reduce electricity costs are considered short-term measures. If there is no structural solution to the problem, electricity costs will be as expensive as o’ the front. However, in the past the Federation of Thai Industries has called for a reduction in electricity costs. and continuously adjust the electricity cost structure Especially the cost of natural gas, where the industrial group buys gas at a more expensive price than the petrochemical group. Therefore, I would like to see the energy structure fair and not put the burden on consumers.
In addition, I would like to see the government’s intention to modify the energy structure. By liberalizing the import of natural gas, increasing importers to have the opportunity to import cheap gas. Would he like to see a power development plan or a PDP plan to increase the proportion of renewable energy to meet the needs. Sustainable solutions to global warming and consumer electricity prices
Vice President of the Federation of Thai Industries In conclusion, he said As energy problems are considered important problems, therefore, the Private Sector Joint Committee Organization (FRA), which includes the private sector such as the Chamber of Commerce, the Federation of Thai Industries, Therefore, a joint private sector energy committee was specifically established. The committee will include the private energy sector. and he saw that there should be consumer advice as an adviser to make suggestions about consumer problems in the energy field as well.
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