Thailand: Electricity rates to be adjusted

Thailand: Electricity rates to be adjusted

The base factor and fuel tariff (Ft) rates that are used to calculate
electricity bills will be revised to match changing contexts, says the
Energy Regulatory Commission (ERC).

Spokesman and commissioner Veeraphol Jirapraditku said the new rates will be
effective from the first half of next year for the next five years.

The ERC has two categories of power calculation: The base factor, which is
revised every five years, and the Ft rate, which is adjusted every four
months.

There are several factors that reduce power production costs, as well as
some factors that have to be added to electric bills, he added.

One example Mr Veeraphol cited is the declining development costs of
renewable energy, particularly solar power.

Additionally, the peak power time has changed from day to night as more
solar power comes on the grid during the day, making the price of power
cheaper, and prompting the ERC to revise the way it calculates power rates.

On the other hand, overinvestment in the power sector among private power
producers, both renewable and fossil energy, has pushed power generation
reserves higher than the expected 35-37%.

Thailand needs an average of 15% in power generation reserves, with the glut
pushing up power reserving costs, as related facilities are limited and in
the process of being developed.

Overinvestment in the power sector during the past decade was largely due to
the 2010 power development plan, which allowed private firms to enter the
segment, as the plan was based on the assumption that the economy would grow
substantially, pushing power demand to grow by 4.5% annually.

Political and economic turbulence in recent years has hindered growth,
leaving excessive power reserves that have generation costs that need to be
absorbed.

Renewable power on the grid as of the end of May totalled 7,000 megawatts
and another 2,200MW is under development, while independent power supplies
that use fossil fuel generated 4,617MW.

For the development of the backup rate that was expected to be charged to
Thai solar power developers, Mr Viraphol said feasibility studies are being
conducted to sort out that issue. He said the backup rate is unlikely to be
imposed on Thai solar farm operators for at least two years.

The backup charge was expected to be collected from renewable power
operators as natural resources cannot generate power for 24 hours a day,
forcing state utilities to generate power from fossil resources to provide a
stable power supply.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://www.bangkokpost.com/news/general/1291031/erc-electricity-rates-to-be-
adjusted

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com