Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 4
Date : 4 January 2026
### 4) Pillar B — Unbundling to Remove Conflicts of Interest (Without Privatizing the Grid)
Even with a TPA code, monopoly power can persist if the incumbent controls both the network and the retail relationship. The practical solution is **unbundling**—not necessarily ownership separation at the outset, but immediate accounting separation and staged functional separation.
**Stage 1: Accounting separation (Year 1)**
- Separate regulated network costs (capex, opex, depreciation, losses) from competitive retail and service costs.
- Prohibit cross-subsidies and require cost allocation audits.
**Stage 2: Functional separation (Years 2–3)**
- Create independent management, performance metrics, and “Chinese walls” between the network operator and any affiliated retailer.
- Establish compliance obligations and penalties for discrimination.
This approach maintains public ownership while removing the incentive and ability to self-preference. It also makes tariff reform and investment planning more credible to both customers and investors.
### 5) Pillar C — Retail Competition (Phased Contestability That Protects Households)
Retail competition should be introduced in phases, because the capability requirements (metering, settlement, consumer protection) expand dramatically when households are included.
**Phase 1: Large customers (Years 1–2)**
- Allow customers above a threshold (e.g., >1 MW or a defined annual consumption) to choose licensed retailers and/or contract via Direct PPA using TPA.
- Focus on industrial zones, data centers, and export-oriented manufacturing where clean-energy procurement and price-risk management are urgent. Thailand’s Direct PPA policy discussion has already highlighted targeted early-use cases, making this phase aligned with current direction.
**Phase 2: SMEs (Years 2–4)**
- Introduce simplified contract templates, standardized disclosure formats, and default service options.
- Encourage retailers to offer bundled services: demand response, energy efficiency, EV fleet charging optimization.
**Phase 3: Households (Years 4–6)**
- Enable switching for households only after:
1) wide smart-meter coverage (or equivalent interval data capability),
2) strong complaint/dispute channels,
3) clear rules against predatory pricing and misleading marketing,
4) a robust “provider of last resort” (POLR) mechanism.
In all phases, MEA/PEA should retain (or a designated entity should retain) a regulated default supply obligation to ensure continuity and social protection.
To be continued——————————————————————————————————————————————————
#DistributionMarketReform #Thaitimes #ManagerOnline #News1Strategic Roadmap for Liberalizing Thailand’s Electricity Distribution Market : Part 4
Date : 4 January 2026
### 4) Pillar B — Unbundling to Remove Conflicts of Interest (Without Privatizing the Grid)
Even with a TPA code, monopoly power can persist if the incumbent controls both the network and the retail relationship. The practical solution is **unbundling**—not necessarily ownership separation at the outset, but immediate accounting separation and staged functional separation.
**Stage 1: Accounting separation (Year 1)**
- Separate regulated network costs (capex, opex, depreciation, losses) from competitive retail and service costs.
- Prohibit cross-subsidies and require cost allocation audits.
**Stage 2: Functional separation (Years 2–3)**
- Create independent management, performance metrics, and “Chinese walls” between the network operator and any affiliated retailer.
- Establish compliance obligations and penalties for discrimination.
This approach maintains public ownership while removing the incentive and ability to self-preference. It also makes tariff reform and investment planning more credible to both customers and investors.
### 5) Pillar C — Retail Competition (Phased Contestability That Protects Households)
Retail competition should be introduced in phases, because the capability requirements (metering, settlement, consumer protection) expand dramatically when households are included.
**Phase 1: Large customers (Years 1–2)**
- Allow customers above a threshold (e.g., >1 MW or a defined annual consumption) to choose licensed retailers and/or contract via Direct PPA using TPA.
- Focus on industrial zones, data centers, and export-oriented manufacturing where clean-energy procurement and price-risk management are urgent. Thailand’s Direct PPA policy discussion has already highlighted targeted early-use cases, making this phase aligned with current direction.
**Phase 2: SMEs (Years 2–4)**
- Introduce simplified contract templates, standardized disclosure formats, and default service options.
- Encourage retailers to offer bundled services: demand response, energy efficiency, EV fleet charging optimization.
**Phase 3: Households (Years 4–6)**
- Enable switching for households only after:
1) wide smart-meter coverage (or equivalent interval data capability),
2) strong complaint/dispute channels,
3) clear rules against predatory pricing and misleading marketing,
4) a robust “provider of last resort” (POLR) mechanism.
In all phases, MEA/PEA should retain (or a designated entity should retain) a regulated default supply obligation to ensure continuity and social protection.
To be continued——————————————————————————————————————————————————
#DistributionMarketReform #Thaitimes #ManagerOnline #News1
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