Thailand's energy transition is on the agenda, but in the most expensive way possible. On May 9, the government published an emergency decree authorising the Ministry of Finance to borrow up to 400 billion baht, of which half is for energy crisis relief and the other half (200 billion baht) for what Santitarn Sathirathai, assistant to the finance minister, has branded the "Jump Start" plan.
Mr Santitarn's four pillars -- building new clean energy supply, modernising the grid, greening transport and logistics, and developing the workforce and innovation ecosystem -- seem like the right diagnosis, and the call to be judged by its impact on Thailand's long-run productive potential is correct in principle.
However, I also agree with 135 opposition lawmakers led by the People's Party, who argue that the 200 billion baht for the energy transition may not constitute an "emergency" and should instead be processed through the normal fiscal 2027 budget review. My contention is that almost every element of a genuine just energy transition can be initiated now, in 2026, through structural reforms and the redirection of existing fiscal and tariff flows. No new sovereign debt is necessary.
So, instead of Mr Santitarn's four pillars in the government's "Jump Start" plan, I would like to propose four alternative pillars to a genuine, just energy transition that the government can initiate today without borrowing an additional 200 billion baht: smart grid investments, unlocking peer-to-peer electricity trading, reforming fossil fuel subsidies, and renegotiating overcapacity and inefficient long-term PPAs.
Consider the grid first, where the case for capital expenditure is strongest. The three state-owned utilities, Electricity Generating Authority of Thailand (Egat), Metropolitan Electricity Authority (MEA), and Provincial Electricity Authority (PEA), already operate under the Thailand Smart Grid Master Plan 2015–2036, and Egat's current transmission program carries a 33.5-billion-baht budget through 2037, on top of a previous 242.6-billion-baht 10-year upgrade plan launched in 2021. Yet both are dwarfed by what a renewables-ready system requires. Ember estimates Thailand's smart grid needs at 14–39 billion baht over the next decade, while the full implementation of the draft PDP 2024 is priced at roughly 5.5 trillion baht through 2037, and IEEFA identifies Asean as among the most underinvested sub-regions globally in transmission. Against these figures, a one-off 200-billion-baht sovereign loan is a drop in the ocean.
The most direct solution is to allow Egat, MEA, and PEA to recover prudent grid modernisation capex through the regulated tariff base, as they already do. The Energy Regulatory Commission (ERC), a national and independent regulator, has the authority to approve such capex; what is missing is a binding requirement that a rolling ten-year smart grid investment plan with transparent cost-benefit analysis and explicit prioritisation of inter-regional transmission. The Northeast's solar capacity is projected to triple by 2037 while demand only doubles; the Central region faces the opposite imbalance. Inter-regional transmission is therefore the single highest-return grid investment Thailand can make, and one that the utilities can finance from their own balance sheets and tariff revenues.
The second pillar, peer-to-peer electricity trading, is less a question of money than of regulation. The binding constraint on rooftop solar adoption in Thailand has never been a shortage of capital. It has been the unfavourable net billing scheme, the absence of third-party access to the grid, and the continued dominance of the Enhanced Single Buyer structure under which Egat and long-term PPAs crowd out distributed generation. None of these constraints will be relaxed by borrowing 200 billion baht -- only by amending the relevant regulations and, where necessary, the Energy Industry Act itself.
Where capital is genuinely needed at the household level to finance rooftop solar, battery storage, and efficiency retrofits, there is a well-tested instrument that requires no sovereign borrowing: on-bill financing. A utility or partner institution provides upfront capital, and the customer repays through a monthly bill charge set below the resulting savings. MEA and PEA already have the billing infrastructure to administer this; what is missing is a tariff order from the ERC authorising it. This is a policy decision, not a budget item.
The third pillar, fossil fuel subsidy reform, is where the fiscal arithmetic becomes most striking. Between 2022 and 2024, energy price subsidies cost the state 178.1 billion baht in foregone excise revenue and pushed the Oil Fuel Fund into a deficit that peaked at over 130 billion baht, requiring a 150-billion-baht state-guaranteed loan to bridge the shortfall. As of mid-March, the Fund was again in a 12.6 billion baht deficit and burning 2.4 billion baht per day to cap diesel prices. These are universal subsidies that accrue disproportionately to wealthier households and do nothing to address structural import dependence. A gradual, sequenced phase-down, replacing universal price caps with targeted, means-tested support for low-income households, public transport users, and farmers facing fertiliser shocks, would free up tens of billions of baht annually. Those resources could capitalise a dedicated Renewable Energy Transition Fund, underwrite green guarantees to de-risk private investment, and finance the reskilling that both a genuine Mae Moh transition and a 30@30 automotive transition require.
The fourth pillar (and also the elephant in the room) is the existing stock of long-term Power Purchase Agreements (PPAs) that lock Thai consumers into availability payments for gas and coal plants whose continued operation is both economically and strategically irrational. Spanish experience has shown that PPAs can be renegotiated where the public interest is sufficiently grave. Thailand's own NDC 3.0 identifies early coal phase-out as six times cheaper than offshore CCS and 20 times cheaper than hydrogen co-firing. Renegotiating overcapacity contracts would deliver fiscal savings that dwarf anything the 200-billion-baht Jump Start tranche can finance. Signing yet more long-dated gas PPAs while borrowing to subsidise the consequences of fossil dependency, by contrast, is precisely the trap Thailand should be exiting.
None of this is to argue that there is no role for targeted, time-bound public spending on the transition. Support for SMEs, low-income households, and high-carbon-sector workers is a defensible use within Mr Santitarn's framework. But these are the icing, not the cake. The cake is made of regulatory reform, tariff reform, subsidy reform, PPA renegotiation, smart grid capex recovered through the utility tariff base, and on-bill financing of distributed generation, each of which is available to the government today at no incremental cost to the public balance sheet.
The signals for a genuine just energy transition have never been louder, and the tools have never been more available. The real question is whether the government will use this crisis to do the hard structural work of dismantling Thailand's fossil lock-in, or use 200 billion baht of emergency sovereign debt to paper over structural problems for one more electoral cycle. It is the Thai populace that will pay the ultimate price for the choice that is made.
Sarinee Achavanuntakul is Head of Research at Fair Finance Thailand and Director of Climate Finance Network Thailand (CFNT).
