35% Increase In 18 Months
In Thailand the Electricity Generating Authority of Thailand known as ‘EGAT’ who sets the price of electricity is expecting the price in Thailand to be the same as in Singapore at 5 baht a Kilowatt-hour (kWh). This is an increase of approximately a massive 35% over the next 18 months. With most Thais earning much less than the average Singaporean this will only make Thailand harder for many Thais and expat residence.
The Governor of ‘Egat’, a Mr Sutat Patmasiriwat says that the cost to produce the electricity is 3baht kWh from domestic gas originating in Thailand and imported gas will make electricity cost 5.5baht kWh. They plan to start importing large amounts of gas as it is claimed that Thailand’s gas supplies have peaked, even though Thailand has an enormous LNG supply in the gulf of Thailand. This is of course the gas fields that Thailand and Cambodia have been arguing over for years and can not come to an agreement on.
Thailand has become dependant on gas powered plants, where its neighbouring countries have diversified into clean coal and hydro that is 40% cheaper than the current rate. Energy Minister Pongsak Raktapongpaisal said that the confidence of foreign investors may be lower due to the rising cost and Thailand’s rising lack of competitiveness. He said he would talk to other countries to try and buy electricity off them to avoid complete dependence on gas.
The Federation of Thai Industries vice chairman, Mr Chen Namchaosiri said that many small and medium sized businesses will be forced to shut down their operation in Thailand and relocate to other more competitive countries in the region when the Thai electricity price hits 5 baht per kWh in an expected 18 months time. He said that many of these businesses have endured the minimum wage hike, were battered by floods and this will be the final straw.