Historic electricity tariff reform sets household rate at 3 baht per unit, data centres to pay more

The National Energy Policy Council (NEPC) has approved a major electricity tariff reform, cutting household power bills while requiring large power users, including data centres, to pay rates that better reflect their real costs.

Energy Minister Ekanat Promphan said the NEPC had approved seven electricity measures aimed at reducing the burden on ordinary consumers, while ensuring that high-volume users such as data centres and industrial operators take fair responsibility for their own costs without passing them on to general electricity users.

Public electricity costs removed from general bills

To reduce the burden on the public, the meeting approved the separation of public electricity costs, such as street lighting, from the tariffs charged to general electricity users.

A new specific rate will be set for these costs.

The Energy Regulatory Commission (ERC) has been assigned to revise laws and regulations governing the Power Development Fund so that contributions can be collected from additional sources.

These include data centre electricity users, users with Direct Power Purchase Agreements (DPPA), revenue from reductions in additional power purchase rates, or Adder, and community solar projects.

The money will be used to reduce public electricity costs and ease the burden on residential power users.

Ekanat said the measure forms part of Thailand’s energy transition towards clean energy, a more secure power system, freer competition and fairer pricing.

Household tariff reduced to 3 baht for first 200 units

The NEPC approved changes to the progressive electricity tariff for residential users.

The first 1-200 units of household electricity use will be reduced to 3 baht per unit.

Rates for 201-400 units and 401 units and above will remain unchanged. However, because public electricity costs will be removed from the tariff structure, residential users at all consumption levels will benefit from the reform.

The meeting also approved an expanded definition of residential electricity users to cover rental housing businesses, such as rented houses, dormitories and apartments, as well as homes without house registration documents.

These users, who currently have to pay higher temporary electricity rates, will be allowed to use the same tariff as ordinary residential users.

The move is expected to ease costs for tenants, particularly students and workers.

Direct PPA expanded to clean-energy industries

The NEPC also agreed to unlock direct renewable-energy power purchases under Direct PPA arrangements through Third Party Access (TPA) to the electricity grid.

The measure will cover both data centre operators and other industries that need clean electricity.

It will allow these operators to buy clean power directly from producers, helping them meet international trade standards that increasingly prioritise clean energy.

The policy is intended to open the clean electricity market and move Thailand towards freer competition.

Special tariff for data centres

The meeting approved a separate electricity tariff for data centres so that their power charges reflect the real cost of electricity supply and grid investment.

These costs include imported liquefied natural gas, or LNG, as well as investment in upgrading power networks to provide the high level of security required by data centres.

The measure is designed to prevent these additional costs from being passed on to general electricity users.

The headline measure indicates that while households using up to 200 units will pay 3 baht per unit, data centres will face a higher tariff, expected at around 5-6 baht per unit.

Large data centres must place grid-use bonds

For large data centre users, the NEPC approved a requirement to place a bond for use of the electricity transmission system.

This is intended to confirm their readiness and genuine investment commitment before the state invests in expanding the power system to support them.

Data centres will also be required to submit water management plans because they use large volumes of water for cooling systems.

The measure is intended to prevent unnecessary overinvestment in electricity infrastructure, which could create costs for ordinary power users, while also preventing competition for water resources with the public and agricultural sector.

Adder reform to tackle expensive long-term contracts

To address the problem of expensive long-term power purchase contracts, the NEPC approved proposals from the committee tasked with resolving problems arising from private power purchases.

The committee is chaired by Deputy Prime Minister Pakorn Nilprapunt.

Its proposals include:

• Setting clear contract end dates for all SPP and VSPP non-firm power producers with automatically renewable contracts.
• Adjusting electricity purchase rates to reflect actual costs, such as setting the solar power purchase rate at 2.1579 baht per unit.
• Assigning the three electricity authorities to negotiate contract amendments.

Community solar farm project to move ahead

The NEPC approved the continuation of the Community-based Solar Farm Generation Project, with revised criteria to ensure fairness for all parties.

The project will involve ground-mounted solar farms of no more than 10 megawatts per project.

The total power purchase target will not exceed 1,500 megawatts.

The Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA) will purchase electricity from the projects under a Feed-in Tariff (FiT) rate of 2.1679 baht per unit, with non-firm contracts lasting 25 years.

The project will follow the principle of one subdistrict, one project, so that benefits are spread across many areas rather than concentrated in only a few locations.

Ekanat said the reform would allow benefits from price differences to be used equally to reduce electricity bills for all users.

The selection of private project developers will also be changed from a first-come, first-served basis to competitive scoring based on project quality.

Each developer will be allowed to win projects totalling no more than 30 megawatts, preventing concentration among a small number of operators.

The community solar farm scheme is expected to improve end-of-line electricity efficiency through clean energy generation, helping reduce costs for electricity distribution authorities.