Thailand's Energy Sector Reform Proposal: Strengthening State Utility and Consolidating Regulatory Bodies

In Thailand, discussions are intensifying regarding structural reforms in the energy sector. Pirapan Saleerattaviphak, former Deputy Prime Minister and Minister of Energy, along with others, is advocating for the dissolution of the Energy Regulatory Commission (ERC) and its merger with the National Energy Policy Committee (NEPC), alongside strengthening the role of the state-owned Electricity Generating Authority of Thailand (EGAT). This proposal was presented at a seminar titled "Readjusting the Role of the ERC, Increasing State Revenue by Strengthening EGAT, and Reducing Public Burden," organized by the House of Representatives' Committee on Finance, Fiscal Policy, Financial Institutions, and Financial Markets. Pirapan highlighted that reducing energy costs would have ripple effects on household finances, the financial system, and the overall national economy. He proposed overhauling the existing regulatory system for electricity, gas, and oil, and establishing a single, empowered supervisory body. Furthermore, Pirapan argued that EGAT should reclaim its role as the primary electricity producer. He analyzed that EGAT's current generation share falling below 50% reduces the supply of low-cost electricity and increases reliance on the private sector. To address this, he proposed merging the three electricity authorities (EGAT, MEA, and PEA) to cut administrative costs and legally mandating EGAT to be responsible for at least 50% of the country's electricity generation. He also called for liberalizing solar power generation to allow citizens to produce and consume their own electricity, and accelerating the development of energy storage technologies like Pumped Storage hydropower. In response, Attawich Suwanphakdi, a Member of Parliament from the Ruam Thai Sang Chart Party, pointed out the complexity of managing the energy-related agencies due to their jurisdiction spanning different ministries (EGAT under the Ministry of Energy, while MEA and PEA are under the Ministry of Interior). He stated that since the ERC's establishment in 2007, EGAT's generation capacity has continuously declined, while the private sector's role has increased, leading to reduced state revenue and higher electricity system costs. He emphasized the need to secure revenue sources by leveraging the potential of state-owned enterprises, given the nation's tight budget. Rassana Tositrakul, Chairperson of the Subcommittee on Public Services, Energy, and Environment at the Consumer Council, asserted that EGAT should return to being a "generator" rather than a "purchaser." She argued that Thailand already possesses generation capacity far exceeding demand, and the costs associated with this excess capacity are borne by the public, thus calling for the cancellation of new power plant projects. She also expressed concern that the increasing number of private power plants could lead to higher system costs and long-term burdens for citizens. Moreover, she warned that setting the Loss of Load Expectation (LOLE) index too low for electricity security could become a pretext for building new power plants, even when the system has surplus capacity. Rassana stressed the importance of integrity in energy management and urged politicians to close legal loopholes rather than exploit them for vested interests. This discussion raises significant points regarding the future direction of Thailand's energy policy, particularly concerning the role of state-owned enterprises, the efficiency of regulatory bodies, and the balance with public burden. Information Source: INN News