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    Thailand Power SWOT


    June 2, 2022 - Fitch Solutions Sector Intelligence

     

      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Thailand Power SWOT

      • 02 Jun 2022
      • Thailand
      • Power
      SWOT Analysis

      Strengths

      • The government offers subsidies for renewable energy in the form of a feed-in tariff programme, applicable to biomass, waste, wind and solar power technologies.
      • Transmission losses are significantly lower than in other markets in the region, which is beneficial for renewable electricity generation.
      • Thailand’s wider infrastructure sector is benefitting from heavy investment from other Association of Southeast Asian Nations markets as well as Japan and Mainland China.

      Weaknesses

      • Substantial investment is required to fund the increase in additional capacity and infrastructure required for the government's power development plan.
      • Thailand's political scene remains volatile, given the entrenched political divide between the rural poor and the urban middle class.

      Opportunities

      • Thailand is looking to reduce its dependency on expensive gas imports and diversify its electricity mix, primarily through the expansion of renewable technology.
      • While the Electricity Generating Authority of Thailand still dominates the power market, the government has introduced some attempts at privatisation, with various schemes for smaller private power producers, and support for them to connect directly to the national grid.
      • Thailand’s Board of Investment offers tax incentives of corporate tax exemptions (up to 8 years), exemption of import duties, and non-tax incentives of land ownership, expatriate and remittance permits for corporations that invest in Thailand’s Bio-Circular-Green Economy Model.
      • The Thai government is looking to increase electricity imports from Laos over the coming years, which indicates that the domestic power production is still lacking, spelling opportunities for new plants.

      Threats

      • Hydropower and coal facilities are facing growing environmental and social opposition domestically and regionally, hindering project development.
      • Weak external demand risks are weighing on household consumption and resulting in softer growth in business investment. This is likely to negatively impact electricity consumption in the country.
      • The potential for the government to lose its majority remains elevated and policymaking could stall under rising disunity within the coalition.
      • Natural gas imports from Myanmar have been decreasing due to the coup situation, exposing gas power plant operators to more expensive natural gas imports from the international market and threatening the profitability of operations.
      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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