BANGKOK – Thailand is importing more gas and expanding gas infrastructure even as many gas-fired power plants sit idle. In 2025, seven of 11 privately owned gas plants operated below 10% of their capacity. Reserve margins ranged from roughly 25% to more than 40%, far above the 10% to 15% level often used for reliable planning.
That surplus creates more than a climate problem. Through availability payments, EGAT and Thai ratepayers have absorbed about THB 159 billion since 2023, creating an economic burden. Households also remain exposed to LNG price shocks and supply disruptions, weakening Thailand’s energy security.
Yet Thailand still plans to add 6.3 GW of gas capacity by 2037, increasing its dependence on imported fuel as domestic production declines. The costs, reliability risks, and policy choices behind this oversupply explain why Thailand’s gas grid has become a reliability challenge as well as an economic burden. The evidence starts with how the country built more generating capacity than its demand could support.
Key Takeaways
- Thailand’s gas grid has more capacity than electricity demand can justify, with reserve margins far above the 10% to 15% planning range.
- Seven of 11 private gas plants operated below 10% capacity in 2025, yet availability payments still shift their fixed costs to EGAT and ratepayers.
- Those payments reached about THB 159 billion over three years, while liquefied natural gas price spikes exposed households to higher electricity bills.
- The Draft Power Development Plan 2024 still proposes 6.3 GW of new gas capacity by 2037, despite ongoing underuse.
- A lower-gas pathway could reduce electricity generation from gas and cut projected gas use by 1,815 billion cubic feet, according to Ember’s Thailand analysis.
Inside Thailand Gas Oversupply: Why Capacity Exceeds Demand
Thailand’s gas oversupply began with a planning model that expected electricity demand to keep rising. Instead, post-COVID gas demand recovered more slowly, while power purchase agreements continued locking in new supply. By the end of 2024, contracted generating capacity stood at about 56 GW, compared with more than 51 GW in the EGAT system. Reserve margins reached roughly 25% to more than 40%, above the commonly cited adequate range of 15% to 20%.
The problem covers more than gas stored in tanks or pipelines. It includes power plants, imported electricity, fuel contracts, and generation that consumers never use.
Why Thailand Built More Power Capacity Than It Needed
Thailand’s planning system prioritized reliability. Forecasts assumed strong economic growth and rising electricity consumption, so EGAT signed agreements with independent power producers. These contracts helped attract private investment and promised available electricity during periods of high demand.
Imported power also added supply outside Thailand’s domestic fleet. Meanwhile, demand forecasts made before the pandemic supported additional gas projects. When consumption grew more slowly after COVID-19, the contracts remained in place even though the expected demand did not arrive.
Three capacity terms make the oversupply easier to understand:
- Installed capacity is the maximum output of power plants that physically exist.
- Contracted capacity is the generation that EGAT has agreed to buy under power purchase agreements, whether or not the plants run often.
- Dispatched electricity is the power plants actually send to the grid.
A plant can therefore count toward installed and contracted capacity while producing very little electricity. These categories can diverge for years, creating structural risks for the grid and consumers. The International Energy Agency’s Thailand power system study describes how Thailand’s gas fleet must operate within a system with competing supply sources and changing demand.
What Plant Utilization Reveals About the Problem
Low utilization among gas-fired power plants shows the cost of those planning decisions. In 2025, seven of 11 privately owned plants operated below 10% of their available capacity. Some were less than 15 years old, so age alone doesn’t explain their limited use.
A modern plant can still become a financial burden when its fixed costs continue after dispatch falls. Capacity payments compensate owners for keeping facilities ready, covering financing, maintenance, staffing, and other expenses. EGAT and electricity customers pay those costs even when cheaper plants, imported power, or weaker demand keep the facilities offline.
The IEEFA report on Thailand’s gas conundrum also identifies seven plants with more than 11 GW of combined capacity that dispatched below 30% of maximum output since 2023. That gap turns unused capacity into a recurring charge rather than a one-time construction mistake.
LNG Imports Are Rising as Domestic Gas Supplies Decline
Thailand is shifting from domestic and pipeline supplies toward liquefied natural gas (LNG) as domestic gas production falls and Myanmar deliveries become less certain. That shift keeps power plants fueled with imported natural gas and improves energy security options. It also ties electricity costs more closely to global gas markets, shipping rates, and geopolitical disruptions.
The Rayong LNG Terminals and Thailand’s Import Dependence
Thailand’s main LNG import facilities sit around Map Ta Phut in Rayong, the country’s established gas and petrochemical hub. PTT’s Map Ta Phut terminal has about 11.5 million tonnes per year (mtpa) of capacity. The newer Nong Fab terminal, which began operating in 2022, adds about 7.5 mtpa of regasification capacity. Nong Fab’s project details confirm its 2022 commissioning and 7.5 mtpa design capacity.
Together, the terminals provide roughly 19.1 to 21.5 mtpa, depending on whether a source counts nominal regasification capacity, peak capability, or another operating measure. That range matters because regasification capacity does not equal gas demand. A terminal can receive more cargoes than the gas system needs, leaving importers with unused capacity or costly supply commitments.
Map Ta Phut’s LNG terminal capacity has expanded Thailand’s ability to replace declining domestic supply. However, current facilities are expected to meet national demand only until around 2028. After that point, Thailand will need more imports, new infrastructure, or lower gas consumption.
The pressure began with declining output from the Erawan field in the Gulf of Thailand. Production dropped sharply before recovering under PTTEP, while Myanmar pipeline gas faces field declines, contract issues, and political instability. These structural risks pushed LNG imports to about 27% of Thailand’s gas supply in 2025. Another calculation puts LNG at roughly 29% of total gas consumption in 2024. These figures use different measurement bases, but both show the same shift.
Why More LNG Capacity Can Create a New Oversupply Risk
PTT plans a capacity expansion that would increase regasification capacity from about 19 mtpa to roughly 30 mtpa by the end of the decade. The Draft Gas Plan 2024 also projects a 73% increase in LNG imports, with LNG supplying about 43% of Thailand’s gas requirements by 2037.
That expansion may replace falling domestic production, but it can also outpace real demand. If power consumption grows more slowly than forecast, Thailand could pay for terminals, storage, shipping arrangements, and long-term LNG contracts that its generators rarely use. The country would then repeat its existing problem, with imported fuel infrastructure adding fixed costs to an already underused gas fleet.
LNG also exposes Thai consumers to global price volatility. During the 2022 energy crisis, rising international gas prices pushed up Thailand’s import bill and electricity rates. A larger import system could improve supply flexibility, but it cannot remove exposure to shipping bottlenecks, major producer disruptions, or sudden geopolitical shocks.
Who Pays When Gas Plants Sit Idle, and Does That Improve Energy Security?
Thailand’s gas oversupply shifts costs across the energy system instead of leaving them with plant owners alone. EGAT, private generators, gas suppliers, and electricity customers each carry part of the burden. Households ultimately face the bill through tariffs and fuel adjustments, even when idle capacity adds little energy security.
How Global Crises Reach Thai Electricity Bills
The Russia-Ukraine war showed how quickly global LNG prices can reach Thai homes. In 2022, tighter international gas markets pushed up Thailand’s LNG import costs. The Energy Regulatory Commission then approved a tariff increase, lifting electricity prices to 4.72 baht per unit from September through December. It was the first time the rate had exceeded 4 baht in 14 years. Contemporary reporting on the tariff decision linked the increase to higher fuel costs.
Thailand pays more directly when it buys spot LNG or replacement cargoes. This is a variable cost tied to the gas a generator actually burns. However, gas supply costs also include fixed expenses that remain when a plant produces little electricity. Financing, staffing, maintenance, and contracted capacity payments continue while the facility waits for dispatch.
The oil fuel fund may cushion some effects from rising diesel prices, but it does not remove LNG-linked electricity costs or availability payments. These costs remain part of the power system, even when other fuel prices receive policy support.
Later tensions involving Iran and the wider Middle East could add another layer of risk. Disruptions may reduce available LNG cargoes, lengthen shipping routes, raise freight and insurance costs, or force buyers to compete for replacement fuel. If LNG becomes harder to secure, Thailand may burn more coal or other available fuels, even while its power system remains heavily dependent on gas.
PTT, EGAT, and Private Power Producers in the Gas System
PTT sits at the center of Thailand’s gas supply chain. It imports LNG, operates key gas infrastructure, manages transmission and distribution assets, and supplies fuel to power producers. This position allows global LNG prices to flow through procurement contracts and into the domestic power system.
EGAT is the state-owned utility, transmission operator, and main electricity buyer. It purchases power from its own plants, private independent power producers (IPPs), small power producers (SPPs), and some foreign suppliers. EGAT then sells electricity to the Metropolitan Electricity Authority and Provincial Electricity Authority, which deliver it to customers.
Private companies own much of Thailand’s newer gas-fired capacity. Gulf Energy Development is a major participant, with large IPP projects and LNG shipping interests. Under long-term power purchase agreements, EGAT may owe an availability payment when a contracted plant remains ready to operate, even if the grid rarely dispatches it.
Take-or-pay gas contracts create a similar obligation. A buyer agrees to pay for a set volume of gas, whether or not it uses every unit. As a result, THB 159 billion (about USD 5.02 billion) in reported availability-related costs since 2023 has fallen on EGAT and ratepayers. Households therefore pay for fuel that generators burn and for parts of a gas system that may sit unused.
Does More Gas Make Thailand More Energy Secure?
Gas can provide dispatchable electricity when solar and wind output changes. That flexibility supports energy security during heat waves or demand spikes. However, adding capacity only improves security when Thailand needs the plants and can afford their fuel. Low utilization rates, high reserve margins, and rising LNG dependence weaken that case.
The Climate Cost of Locking In New Gas Plants
Gas generally produces less carbon dioxide at the power plant than coal for each unit of electricity generated. That advantage matters when gas replaces older, less efficient coal units. Still, a new gas plant can operate for 25 years or longer, creating carbon lock-in and tying future planning to fossil fuel infrastructure.
The Draft Power Development Plan 2024 proposes about 6.3 GW of additional gas capacity by 2037. It also expects gas to supply around 41% of electricity generation that year. This conflicts with Thailand’s goal of carbon neutrality, particularly if plants built in the 2030s need high utilization to recover their costs. Ember’s analysis of Thailand’s 2037 power targets identifies a lower-cost pathway with less new gas and greater reliance on clean power.
Thailand’s 2050 target for net zero emissions makes this conflict more urgent. The country’s nationally determined contribution and broader climate commitments also require a credible plan for operating and retiring new gas assets.
Imported LNG further weakens the case that gas automatically improves energy security. Thailand’s Draft Gas Plan 2024 expects LNG to provide about 43% of gas requirements by 2037. Global prices, shipping routes, and geopolitical events can affect whether those cargoes arrive at an affordable price.
Thailand’s response to recent LNG supply stress shows the limits of gas-based security. Amid Middle East tensions and higher LNG costs, regulators ordered two Mae Moh coal units back into service, adding 600 MW. Gas capacity did not remove fuel-switching risk. It shifted exposure toward imported fuel, then left coal as a fallback when LNG became harder or more expensive to obtain.
What a Better Power Plan Could Prioritize
Thailand faces risks if it builds too little capacity, but oversupply creates its own costs. Idle plants can produce stranded assets, higher tariffs, and long-term payment obligations. Together, these structural risks can slow the energy transition and crowd out investment in efficiency, storage, renewable energy deployment, and transmission.
A stronger planning process led by Thailand’s national energy policy council would:
- Update demand forecasts more often and test them against slower economic growth, efficiency gains, and changing industrial demand.
- Review or renegotiate inflexible power purchase agreements where contracts allow, while protecting legitimate reliability needs.
- Publish plant utilization, availability payments, fuel costs, and system-wide generation data.
- Consider a temporary, clearly time-limited “power plants suspension” for projects that fail updated demand and emissions tests.
- Expand energy efficiency and demand-response programs so customers can reduce consumption during peak periods.
- Build renewable power alongside storage, flexible transmission, and grid upgrades.
Existing gas plants may still provide backup during prolonged periods of low renewable output. New projects should proceed only when Thailand can show that the system needs them, consumers can afford them, and they have a credible operating and retirement pathway.
What Thailand’s Gas Oversupply Means for the Next Decade
Thailand’s next decade will be shaped by a difficult choice. It can keep expanding LNG terminals, pipelines, and gas-fired generation to replace declining domestic gas production, or limit new commitments and manage existing contracts and assets.
The warning signs are already visible. Seven of 11 privately owned gas plants ran below 10% capacity in 2025, while reserve margins remained far above the level needed for reliable service. If gas demand grows more slowly than forecast, additional infrastructure could become uneconomic. Thailand could end up paying for plants that rarely produce electricity.
Thailand Gas Oversupply: Two Paths After 2026
Expanding LNG would give Thailand greater fuel access and energy security, but it would also increase exposure to global markets, shipping disruptions, and geopolitical shocks. The 2022 energy crisis showed how quickly LNG costs can reach household electricity bills. Recent supply tensions have also pushed Thailand to rely on coal when imported natural gas became less secure.
A lower-commitment path would pause unnecessary projects, improve demand forecasts, and seek greater flexibility in existing power purchase agreements. A temporary suspension of power plants could cover projects without a demonstrated customer or reliability need. The oil fuel fund cannot solve the underlying cost of unused generation capacity. Fixed contracts, LNG infrastructure, and underused plants would otherwise create structural risks for consumers.
Thailand’s longer-term climate plans make this decision more pressing. The country has committed to net zero emissions by 2050, yet the Draft Power Development Plan 2024 still includes 6.3 GW of new gas capacity by 2037. A carbon-neutrality pathway for Thailand would require policymakers to test each project against that target, not only against short-term fuel needs.
Three Questions Before Approving New Gas Projects
Before signing another contract, policymakers should answer three direct questions:
- Who will use the power? Demand forecasts should identify the factories, households, and industries expected to consume it.
- Who pays if demand falls short? The contract should make clear whether plant owners, EGAT, or ratepayers carry the cost of unused capacity.
- How does the project fit the 2050 net-zero target? A new plant needs a credible operating and retirement plan that does not lock Thailand into decades of imported gas.
Without clear answers, new gas infrastructure could increase Thailand’s energy costs without improving energy security.
Frequently Asked Questions
Thailand’s gas problem involves more than fuel shortages. The country must manage declining domestic production, uncertain pipeline imports, LNG exposure, and power plants that remain available even when the grid rarely needs them.
What does gas oversupply mean in Thailand?
Gas oversupply means Thailand has more combined gas supply commitments, import capacity, and gas-fired generation than current electricity demand can use economically. This includes contracted fuel and power capacity, not only gas physically sitting in pipelines or storage facilities.
As a result, a plant may remain ready to operate while producing very little electricity. The IEEFA report on Thailand’s gas system describes this as underused generation capacity alongside rising gas import dependence. Oversupply also doesn’t mean every part of Thailand has excess physical gas at every moment.
Why is Thailand importing more LNG?
Thailand is importing more LNG because domestic production has declined, especially from the Erawan field in the Gulf of Thailand. Pipeline gas from Myanmar has also become less certain due to falling field output, political instability, and possible supply interruptions.
LNG fills the gap when domestic and pipeline supplies fall short. However, imported LNG links Thai electricity costs to global gas prices, shipping rates, and disruptions along major supply routes. The U.S. Energy Information Administration’s Thailand energy profile tracks the country’s declining natural gas reserves and growing reliance on imports.
Will Thailand stop using gas-fired power?
Thailand is unlikely to stop using gas-fired power in the near term. Gas plants can increase or reduce output relatively quickly. This helps the grid respond when renewable generation changes or electricity demand rises unexpectedly.
The main policy question concerns the size of the future gas fleet. Thailand must decide how much new gas capacity and LNG infrastructure it can justify without adding more idle assets, fixed payments, and fuel-price exposure. Existing plants may provide useful backup, but that does not automatically support building every proposed project.
How can unused gas plants raise electricity costs?
A gas plant can keep creating costs even when it produces little electricity. Financing, staffing, maintenance, capacity payments, and power purchase agreement obligations may continue while the facility remains available to the grid.
Those charges can move through EGAT and into electricity tariffs rather than disappearing when the plant is idle. An oil fuel fund may cushion some fuel-price pressure, but it cannot replace transparent power-contract and capacity-cost reform. The reported THB 0.63 per kilowatt-hour availability charge for the first 2026 tariff cycle illustrates how fixed payments can form a noticeable part of the customer bill.
What is a take-or-pay LNG contract?
A take-or-pay LNG contract requires the buyer to pay for a minimum volume of gas or reserved supply capacity, even when it doesn’t use the full quantity. The arrangement gives sellers confidence and can help buyers secure fuel before a shortage occurs.
The risk appears when electricity demand grows more slowly than expected. Thailand may then pay for LNG cargoes, terminal capacity, or related transport arrangements that generators rarely use. These contracts protect supply, but overly large commitments can transfer forecasting mistakes to EGAT and electricity customers.
Can renewable energy solve Thailand’s gas problem?
Renewable energy can reduce gas consumption and limit the need for new gas plants. Solar and wind projects, batteries, energy efficiency, and demand-response programs can improve energy security when planned alongside enough flexible capacity. Grid upgrades can also move power to areas where demand is highest.
Renewables alone cannot remove every planning challenge. Thailand still needs enough flexible capacity for seasonal demand, extended periods of weak renewable output, and sudden changes in generation. A sound plan should measure those reliability needs before approving new gas infrastructure, rather than treating every potential shortfall as a reason to build another plant.
Conclusion
Thailand is paying for gas power it often does not use. Low plant utilization, high reserve margins, and THB 159 billion in availability-related costs show how demand-based contracts can become a lasting burden for EGAT and households. Rising LNG dependence adds risk, exposing electricity prices to global fuel shocks while declining domestic production weakens supply security.
A larger gas system is not automatically safer or cheaper, and it does not guarantee energy security. An oil fuel fund may ease short-term price pressure, but it cannot fix long-term overcapacity or costly contracts.
Thailand should match power contracts and capacity with realistic demand, protect households from avoidable costs, and reduce exposure to imported LNG price and supply shocks. Transparent planning should publish clear data on plant use, contract costs, fuel needs, and reliability requirements. Evidence-based decisions can help Thailand avoid paying for another generation fleet that remains ready on paper but idle in practice.
