Thailand Targets Lower Electricity Prices, Renewable Energy Expansion to Attract Data Center Investments

Thailand’s government plans to expand the use of renewable energy, particularly solar power, and lower electricity prices to attract investment from high-tech industries such as data centers, according to former Prime Minister Thaksin Shinawatra.

Speaking at a business forum in Bangkok, Thaksin, the de facto leader of the ruling Pheu Thai Party, announced that the government aims to reduce electricity costs to 2.5 baht per kilowatt-hour (kWh) (approximately 0.074 USD). The move is expected to enhance Thailand’s competitiveness while supporting economic growth and carbon reduction goals.

Electricity Price Reduction to Boost Investment

Thailand currently faces high electricity prices, with commercial and residential rates standing at 4.15 baht per kWh (about 0.12 USD). Thaksin stated that the government plans to gradually decrease these costs, targeting a nearly 40% reduction by next year.

“Energy costs remain a significant barrier to investment in key sectors such as data centers, artificial intelligence, and cloud systems,” Thaksin said. He emphasized that maintaining electricity prices below 2.5 baht per kWh is both achievable and necessary for competitiveness.

Thailand’s electricity sector remains heavily reliant on fossil fuels and imported natural gas, which contribute to rising energy prices. Thaksin underscored the need for greater reliance on renewable energy sources, particularly solar power, suggesting that further advancements could eventually bring electricity costs below 1 baht per kWh (about 0.03 USD). However, he did not provide specific details on how renewable energy expansion would achieve these lower costs.

Regarding nuclear power, Thaksin noted that the high investment costs would yield limited benefits for Thailand’s current electricity needs, making nuclear energy an unlikely option in the near future.

Thailand’s Data Center Industry Poised for Growth

Thaksin, who remains an influential figure in government policy despite not holding a senior cabinet position, also outlined a vision for turning Bangkok into a global hub for data centers and artificial intelligence.

Major technology companies, including Amazon, Google, TikTok, and Alibaba, have already committed significant investments in Thailand’s data center and cloud service sectors. The country’s data center industry is projected to grow substantially, with market research firm Research and Markets estimating its value at 1.56 billion USD in 2024, with expectations to reach 3.19 billion USD by 2030, reflecting a compound annual growth rate of 12.66%.

Thailand’s data center construction costs are currently estimated at 8 million to 9 million USD per megawatt, lower than in other Southeast Asian countries such as Singapore, Indonesia, and Malaysia. This cost advantage is expected to drive further investment and expansion in the sector.

The government’s push for lower electricity costs and renewable energy development aligns with its broader economic strategy to attract global technology firms and position Thailand as a leading hub for digital infrastructure in the region.