Following the general election on 8 Feb 2023 GMT+7, the Thai public has witnessed emerging signs of political parties preparing to form a new coalition government, which is projected to officially take office in June this year according to anticipated timelines.
The year 2026 is a critical juncture for Thailand's energy transition, occurring amid global volatility affecting geopolitical security, the world economy, and environmental pressures linked to the Net Zero 2050 target, among others.
These factors inevitably influence the Ministry of Energy's policy formulation, which must be actionable and beneficial to citizens across all levels.
Although the Ministry of Energy is a relatively small economic ministry with an annual budget of 3,000–4,000 million baht, it is effectively a Grade A ministry, controlling vast energy concession resources of immense value—surpassing even the legendary Phetchaburi gemstone reserves—making it a coveted asset for politicians from all parties seeking to manage these valuable resources.
Therefore, the difficult challenge for the new Minister of Energy is to revitalize the ministry's flagship policies, driving initiatives under the concept of a "balanced energy transition," which comprises four key policies:
1. Increasing domestic energy procurement this year. Beyond diversifying fuel sources to mitigate risks from global volatility, the ministry prioritizes expanding domestic energy through accelerating the 26th round of petroleum exploration and production in the Andaman Sea, alongside pushing for Cabinet approval of winners from the 25th onshore exploration round. Additionally, expanding cooperation in the joint development area with Malaysia aims to establish a stable, flexible, and systematically managed energy base for Thailand, both in the short and long term.
2. Announcing a new Power Development Plan (PDP). The ministry is progressing on a new PDP aligned with rapidly changing global contexts. This plan integrates critical factors affecting national electricity production and consumption, including new energy technologies, accommodating data centers, growth of electric vehicles (EVs), appropriate electricity pricing to maintain competitiveness, and increasing the share of clean energy to accelerate Net Zero targets by over 15 years. The new PDP will serve as a foundational mechanism for the country’s power system and long-term economic growth.
3. Revising energy regulations to support the energy transition. A core element is enabling all sectors to participate flexibly and fairly in producing and consuming clean energy. This year, the ministry is developing legal frameworks for direct electricity purchase agreements (Direct PPAs) to meet demand for clean energy with clearly identifiable sources.
“This aspect is a key to attracting new domestic investments and establishing a clear competitive advantage for the country,” the ministry noted.
4. Accelerating allocation of the Energy Conservation Promotion Fund for 2026. Energy investments are crucial for an effective, tangible energy transition. The ministry must allocate this fund as a primary mechanism supporting all sectors—government, private, and public—in the transition, serving as a channel for national adaptation to new global environmental targets.
Overall, these represent the significant responsibilities that the new Minister of Energy must undertake for the benefit of all Thai people.
Meanwhile, the Ministry of Industry, perceived as a Grade C ministry by political parties, faces urgent priorities that allow no time for onboarding, as the new Minister of Industry must swiftly restart the country's systemic competitiveness through key strategies such as:
1. Rapidly reviving the Manufacturing Production Index (MPI) and industrial capacity utilization rate (CapU) to restore their roles as economic engines, since MPI has been below Thailand's production potential for several years.
Meanwhile, CapU remains below breakeven levels in many industries; factories have orders but hesitate to invest in capacity expansion due to volatile production costs influenced by exchange rate issues, U.S. import tariffs, and geopolitical uncertainties.
Urgent measures may include segmenting industries by recovery speed or risk of decline, applying targeted policies accordingly; using Super Tax Deduction incentives to stimulate production line upgrades; and attracting government procurement orders (local content) to Thai factories to boost short-term CapU.
Further, coordination with the Board of Investment, the Office of Industrial Economics, and the Department of Industrial Promotion aims to stimulate new investments, which would increase industrial capacity utilization, generate new employment, and thus invigorate the economic cycle.
2. Unlocking SMEs to enable Thai SME products to compete against low-priced imports, particularly by facilitating easier access to financing.
3. Establishing measures to address the influx of cheap imported goods that undermine Thai producers, a significant issue as products from China and other countries flood the market, causing price undercutting, damaging domestic production structures, leading to factory closures and job losses.
4. Restructuring industries towards New S-Curve and Green Industry models. This new challenge reflects global demand shifts from merely low-cost products to clean, technologically advanced goods with traceable origins. The mission includes accelerating target industries such as electric vehicles, batteries, semiconductors, high-end electronics, supporting factories to become Green Factories and achieve net zero emissions, and establishing an Industrial Transformation Fund to provide loans for upgrading older factories.
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