Coal Units Restarted to Curb Electricity Costs

Why It Matters

Restarting coal capacity provides immediate price relief amid volatile LNG markets, protecting consumer bills and limiting fiscal pressure on Thailand’s power utility.

Key Takeaways

• ERC orders 600 MW coal restart at Mae Moh.
• LNG spot prices hit $24‑25/MMBtu, double last year.
• Tariff held at 3.88 baht/unit May‑August.
• Egat faces 36 billion baht loss from subsidies.
• Government adds spot LNG shipments, urges conservation.

Pulse Analysis

Thailand’s power mix is heavily weighted toward imported liquefied natural gas, which now accounts for about 60% of generation. Spot LNG prices in Asia have surged to $24‑25 per MMBtu, driven by Middle‑East supply disruptions and tighter global demand. Coal, despite its environmental drawbacks, remains markedly cheaper on a per‑megawatt basis, prompting the Energy Regulatory Commission to reactivate two 300‑MW units at Mae Moh. This short‑term shift helps the regulator anchor tariffs at 3.88 baht per kilowatt‑hour, shielding households and businesses from abrupt cost spikes.

For Egat, the operational pivot carries a double‑edged financial impact. While the additional 600 MW eases the immediate need for costly LNG imports, the utility is already grappling with a 36 billion baht loss tied to previous subsidy schemes. Restarting older coal units entails higher maintenance overhead and potential carbon‑related penalties, which could strain Egat’s balance sheet if subsidies are extended. Investors are watching closely to see whether the government will provide fiscal support or expect the utility to absorb the cost, a decision that will influence future capital allocation and debt servicing.

Beyond the coal‑LNG balancing act, Thailand is pursuing a broader energy resilience strategy. The ERC has secured three extra spot LNG shipments for early 2026 and is urging domestic shippers to negotiate better terms, while the caretaker energy minister promotes nationwide conservation measures. Diversifying the generation portfolio—through renewables, nuclear discussions, and demand‑side management—remains critical as regional geopolitics keep fossil‑fuel markets unpredictable. For businesses, the key takeaway is that short‑term price stability may come at the expense of longer‑term sustainability goals, underscoring the need for adaptive risk management in energy procurement.