Thailand's small power players 'to remain under pressure'

SMALL power producers (SPPs) in Thailand with high exposure to industrial customers may continue to face pressure from high-energy fuel sources, even as the country's Energy Regulatory Commission (ERC) plans to implement a new system to mitigate rising power tariffs caused by nationwide gas shortages.

This is because SPPs' electricity sales to industrial customers are charged at grid tariff with no direct fuel price pass-through, said UOB Kay Hian (UOBKH) in a report on Monday (Apr 18).

To recap, ERC is considering the implementation of a new Energy Pool Price (EPP) formula from as early as May 2022. This is to encourage Thai power operators to produce more diesel- and fuel-generated electricity at a much cheaper rate than imported spot Liquefied Natural Gas (LNG).