Equity Analysis /
Thailand

Thailand: Utilities - Power price—an inconvenient truth!

  • The time bomb is ticking

  • Jan-Apr power price surge is inevitable

  • What viable mitigation measures are there?

Bualuang Securities
21 November 2022

No one likes paying high electricity bills. But the soaring pooled gas price is inflating EGAT’s burden, so we don’t think the govt can hold (let alone cut) the Ft rate for the Jan-Apr 2023 billing period. Renewable plays will clearly benefit. GUNKUL is our top pick.

The time bomb is ticking

The pooled gas price hit a new high in Sep of Bt649/MM btu, up by 177% YoY and 20% MoM (Figure 1). The JKM LNG price is falling, but remains high. PTT’s forecast 4Q22 mean pooled gas price is little-changed (from its previous forecast) at Bt451/MM btu (up 49% YoY but down 16% QoQ). But its projected mean pooled gas price for the Jan-Apr 2023 billing period is up 13% from its earlier forecast to Bt552/MM btu. EGAT’s gas cost burden has inflated to Bt126bn (from Bt83bn at end-Apr 2022), implying an electricity price of Bt7.37/kWh (in order to clear the burden within four months); it could take years to clean up the mess.