Without proper energy plan, power bill could double in seven years

Electricity tariffs could double to Bt8 per kilowatt-hour in the next seven years, in the worst-case scenario that the country fails to achieve its energy procurement and conservation targets, says a top energy official.

Kurujit Nakornthap, director-general of the Mineral Fuels Department of the Energy Ministry, told a public forum yesterday that under that scenario, Thailand would have to increase its imports of liquefied natural gas (LNG) from 5 per cent at present to 50 per cent of total gas supply within seven years.

“What is worrying is that this gap [between the supply and demand of natural gas] will start [to get large] within just four years, while any planning efforts will take time. The worry is that if we can’t reduce energy consumption as planned, this gap will increase, and we will have to import LNG at higher prices or see nobody selling to us,” he said. 

The forum in Bangkok was part of a series of public hearings intended to receive feedback on a national energy master plan.

Kurujit said his projection was based on an assumption that the price of imported LNG would be twice the current price of locally produced natural gas, which was about US$8 per million British thermal units at the end of last year. The prices of LNG that PTT imported from Qatar last year were between $15 and $16 per million BTU, said Kurujit, who was appointed to PTT’s board of directors on July 1.

Speaking to reporters on the sidelines of the conference, he said Thailand’s domestic natural-gas reserves would fall to a crisis level in seven to 15 years, a worrying trend considering that gas currently fuels 70 per cent of the country’s electricity generation.

To fill the growing energy-supply shortfall, Kurujit said the ministry was preparing to propose several measures to the incoming Cabinet. These would include launching the 21st round of bidding for petroleum exploration and development concessions throughout the country; determining the fate of the Erawan, Bongkot and other petroleum fields in the Gulf of Thailand at least five years before their concessions currently held by Chevron and PTT Exploration and Production expire in 2022-2023; and negotiating a joint development agreement to explore petroleum resources in the overlapping area between Thailand and Cambodia in the gulf. 

“And the fourth option … we hope that the energy conservation plan will succeed,” he said.

Kurujit said the petroleum fields whose concessions will expire between mid-2022 and early 2023 were the “backbones” or the “arteries” of the country that required substantial investments to maintain their current production rates. So if the concessions are allowed to expire without proper planning, the concessionaires might not continue to drill 500 new wells every year just to keep the current gas production from falling, as they have been doing so far. 

Energy permanent secretary Areepong Bhoocha-oom said the National Energy Policy Council recently agreed to put conservation on top of the country’s energy-policy agenda, and it had ordered a nationwide shift to LED (light-emitting diode) lighting to help save nearly 2,000 megawatts of electricity annually.

Areepong said the second-most-important item on the agenda concerned rebalancing the country’s fuel-supply options to reduce its dependence on natural gas from 65 per cent at present to about 20-30 per cent, substituting it with clean coal and renewable energy. 

He said the ministry would submit a 20-year energy master plan to the new Cabinet in October, after completing public hearings in Khon Kaen and Surat Thani next month. About 500 people who took part in the first public hearing held in Bangkok yesterday. They were presented with four main energy plans: a national power development plan (PDP), a renewable-energy development plan, an energy conservation plan, and an energy procurement plan.