The government is considering launching a mandatory energy-saving campaign featuring drastic measures amid what appears to be an increasingly bleak energy outlook.
The campaign aims to lower imports of liquefied natural gas (LNG), a major fuel source, which have spiked recently due to a drop in domestic supplies of natural gas, according to the Energy Ministry. That has pushed up electricity bills this year, as the Russia-Ukraine war and higher demand in Europe during the winter continue to heap pressure on LNG prices.
The depreciation of the baht has served to further aggravate the problem.
The National Energy Policy Council (NEPC) approved key energy-saving measures earlier this week at a meeting chaired by Prime Minister Prayut Chan-o-cha.
They include shorter operating hours for shopping malls and petrol stations, the dimming of lights in some public areas, and reduced usage of air conditioning inside buildings.
According to the Energy Ministry, LNG prices currently stand at US$26-29 (933 to 1,041 baht) per metric million British thermal unit (MMBTU). It said it will enforce the new mandate if the prices rise to $50 per MMBTU and remain at that level for over two weeks.
At first glance, the plan looks good — apart from the omission of one crucial bit of data from the equation: Thailand’s energy reserve margin. That has jumped to 40%, compared to the international standard which caps the acceptable reserve margin at 15%.
The surplus results from the so-called “availability payment” in the terms of agreement the Electricity Generating Authority of Thailand (Egat) has signed with power developers.
Also known as “take or pay”, this means the state must cough up to cover the agreed prices once a power plant is ready to begin production, even before any electricity is generated. The cost is then passed on to the public via the fuel tariff (FT), which is included in people’s electricity bills.
When confronted about this, the ministry and energy policy authorities responded evasively, tap-dancing around the issue.
The energy sector is avaricious in its pursuit of more resources. Recently, it has lobbied hard for the government to source LNG from an area claimed by both Thailand and Cambodia, which could risk escalating territorial disputes.
Meanwhile, even though the Ministry of Energy has admitted that flaws in its power development plan led to the reserve glut, nothing has been done to try and resolve the issue.
Egat continues on its shopping spree, signing deals to buy electricity from dams in Laos and buying more gas. Yet the government has not compelled the agency to revise the unfair fuel tariff.
So this is not really an energy crisis, despite the authorities trying to convince the public that it is. What we are seeing is more like an energy management crisis, and one that needs to be taken seriously as opposed to sweeping it under the carpet.
Gen Prayut, as chairman of the NEPC, has been acting like no one informed him about the excess energy reserve. Maybe he should start asking what needs to be done to lower it.
Saving energy — whether done in the middle of a national crisis or not — must be embraced without compromise. But the energy policies and management also need to be fair and transparent, rather than burdensome to consumers.