New power rate calculation by 2018

Base factors to include regional variations

A new calculation for the power rate, relying on new base factors to be applied for the next five years (2018-22), is due to be concluded and announced by early next year.

The new base factors and calculation are expected to let the new power rate reflect real development costs and changes in power-generation structure.

Veeraphol Jirapraditkul, a commissioner and spokesman of the Energy Regulatory Commission (ERC), said Thailand has been relying on several factors to produce power for consumers, but these have changed and the ERC has revised its rate calculation accordingly.

The base factors normally stem from capital expenditures for power-generating systems, transmission and distribution, mostly involving fossil fuel-based power.

The ERC recently assigned PricewaterhouseCoopers to conduct a study of the feasibility of calculating power rates differently in each region, taking into account varying costs. The results of the study are expected by the end of 2018’s first quarter.

The existing power rate applied to Thai consumers is an averaged single rate, though power-development costs in some regions are higher than in others.

The new power rate will not be applied immediately after the study is done, however, since the findings will need to pass hearings by relevant organisations before being imposed, Mr Veeraphol said.

He said the location of power users will be another new factor added to the power rate calculation. The greater the distance between power plants and users, the higher the power cost to be charged, since the state must bear the expense of the transmission lines.

The changes will make the new power rate fairer for everyone, Mr Veeraphol said.

Excessive power reserves are another base factor that the ERC will examine in calculating power bills.

Thai power reserves are expected to rise to more than 30% of total power-generating capacity over the next five years, more than doubling a World Bank forecast.

Previously, energy policymakers planned on power-generating capacity rising in line with the country’s economic growth.

But unexpected political and economic turbulence over the past several years dragged down growth, resulting in power reserves outpacing their target.

Excessive power reserves means increased generating costs that have to be absorbed by consumers.

Another factor to be revised in the new power bill calculation is the rising power-generating capacity of renewables, whose power-generating costs were historically higher than those of fossil fuelbased power.

Renewable power makes up about 13% of Thailand’s total power-generating capacity, up sharply in the past few years with the benefit of government support.

Solar power ranks as the most popular type of renewable power in Thailand. Solar-generating capacity rose to almost 3,000 megawatts in July from 900MW in 2014.