Understanding Electricity Costs in Thailand: Factors, Pricing, and how to calculate them

why electricity so expensive
  • The base electricity cost includes the construction cost of power plants, transmission systems, and distribution systems, as well as fuel costs, electricity purchase costs, and expenses according to various policies. It calculates the amount of electricity that should be provided to meet the electricity needs of the Thai population.
  • The variable electricity cost, or Ft cost, is the variable expense derived from the base electricity cost. It is adjusted every 4 months and supervised by the Energy Regulatory Commission (ERC). It is calculated based on fuel costs, electricity purchases from private and foreign sources, and expenses according to government policies. The variability of this cost depends on the fluctuating prices in the global energy market and the additional amount of electricity we need to import. The recent increase in electricity prices is due to this Ft cost.
  • Value Added Tax (VAT) is calculated at a rate of 7% of the base electricity cost and Ft cost combined.

For those wondering where the electricity we use every day comes from, the answer is as follows:

The primary fuel sources in the country are natural gas, accounting for over 57.8%, with major energy sources located in the Gulf of Thailand. Currently, PTT Public Company Limited is responsible for production and management. In addition, electricity is generated from crude oil and coal. However, the share of renewable energy in the country is relatively low, such as hydropower and solar energy.

Imported fuels come from Malaysia, Laos, and additional gas imports from Myanmar, accounting for 14% of total gas in Thailand. Liquefied Natural Gas (LNG) is imported from Qatar, Indonesia, and Australia. LNG has a higher price compared to other types of gas due to the need for liquefaction for long-distance transportation.

Now, let’s answer the question everyone is curious about. Why is electricity expensive?

The answer lies in two main factors within the country: the gas crisis in the Gulf of Thailand, which has decreased the proportion of Thai electricity production relying on natural gas and increased reliance on LNG. The cost of natural gas in the Gulf of Thailand is around 2-3 baht per unit, while diesel fuel costs around 6 baht per unit, and LNG production costs up to 10 baht per unit. Therefore, as the proportion of electricity production shifts towards increased reliance on imported gas, especially LNG, the cost of energy production also increases, resulting in higher electricity costs. In summary, even with the same level of electricity consumption, the price increases due to higher production costs. Additionally, there is the issue of excessive electricity reserves. Normally, electricity reserves in the system should be more than the maximum electricity demand by approximately 15%. However, it has been found that Thailand’s electricity reserves reached 45%, which is more than necessary. This excess reserve requires the government to purchase electricity from private companies as a backup, even if it is not used, resulting in additional expenses included in the electricity cost.

How to Calculate Electricity Costs for Electrical Appliances

“Electricity Calculation Guide 2566: How to Calculate Electricity Costs for Electrical Appliances

Electricity Unit: Divide Power in Watts by 1,000 and Multiply by Usage Hours (1 kWh = 1 unit)

Time of Use (TOU) Electricity Rates

For Voltage Range 12-24 kilovolts, during On Peak hours, the rate per unit is 5.1135 Baht, while during Off Peak hours, it is 2.6037 Baht per unit.

For Voltage Lower Than 12 kilovolts, during On Peak hours, the rate per unit is 5.7982 Baht, while during Off Peak hours, it is 2.6369 Baht per unit.

(Note: On Peak hours are from 09:00 to 22:00 on Monday to Friday, while Off Peak hours are from 22:00 to 09:00 on Monday to Friday and 00:00 to 24:00 on Saturday, Sunday, National Labor Day, and public holidays.)

Calculation Method for Residential Electricity Costs

Let’s take an example of calculating electricity costs for a residential household using 100 units. We divide the calculation into three main parts:

Part 1: Base Electricity Cost

  • The first 15 units (units 1-15) at a rate of 2.3488 Baht per unit, which amounts to 15 x 2.3488 = 35.23 Baht.
  • The next 10 units (units 16-25) at a rate of 2.9882 Baht per unit, which amounts to 10 x 2.9882 = 29.88 Baht.
  • The next 10 units (units 26-35) at a rate of 3.2405 Baht per unit, which amounts to 10 x 3.2405 = 32.41 Baht.
  • The following 65 units (units 36-100) at a rate of 3.6237 Baht per unit, which amounts to 65 x 3.6237 = 235.54 Baht.

Total = 333.06 Baht.

There’s an additional service charge of 8.19 Baht.

Therefore, the total base electricity cost (energy cost + service charge) is 341.25 Baht.

Value Added Tax (VAT) of 7%

The VAT of 7% is calculated as [(base electricity cost + FT charge) x (7/100)] = 23.08 Baht.

Then, the value from Part 2 is added to the VAT, resulting in the actual electricity cost that needs to be paid, which is 329.65 + 23.08 = 352.73 Baht.
(Note: This amount does not include the 3% discount as per the government’s policy. It is an estimated price.) Alternatively, for an easier calculation, you can use the online electricity cost calculator provided by the Metropolitan Electricity Authority and the Regional Electricity Authority.”

Please note that the translation provided is a general translation and may not be an exact representation of the original text.

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