Post by : Rameen Ariff

Thailand is experiencing a sharp decline in electricity demand in 2025, government data shows, driven by unusually mild weather and a slowing economy. The Southeast Asian nation, one of the top LNG importers in the region, is now on track for its steepest annual drop in power consumption and liquefied natural gas (LNG) imports in more than a decade.

Official statistics reveal that electricity generated and imported for domestic use fell by 5.4% in the first seven months of the year compared to 2024. This is nearly double the 2.8% decline seen during January–July 2020, when COVID-19 lockdowns had reduced electricity usage. Analysts say such a yearly drop is rare, with only three previous annual declines recorded in the last four decades.

Weather and Residential Demand Drive the Decline

Experts attribute the record drop primarily to mild temperatures and heavy rainfall, which reduced the need for air conditioning. Raksit Pattanapitoon, an energy analyst at Rystad Energy, said weather was "by far the most significant driver" of electricity consumption in Thailand this year.

Residential power demand, which represents 31% of the country’s total electricity usage, fell by over 7% during the seven-month period, marking the steepest decline ever. Industrial and commercial demand, which make up the remaining two-thirds, fell by 2.8%.

Economic Slowdown Adds Pressure

Thailand’s economy has also contributed to the drop in electricity consumption. The World Bank forecasts economic growth to slow to 1.8% in 2025 and 1.7% in 2026 due to weaker exports, a slowdown in tourism, and political uncertainty affecting public investments. Analysts note that 2025 will be the first year since 2020 that Thailand will not record a new peak in electricity demand, breaking the average growth rate of 6.2% seen from 2021 to 2024.

Impact on Gas-Fired Power and LNG Imports

Natural gas accounts for 56% of Thailand’s electricity generation. Gas-fired power output has fallen 12% through July 2025, signaling the steepest decline in LNG use and the first drop in annual LNG imports since 2014. Data from Kpler, an analytics firm, showed that LNG shipments to Thailand dropped 15.3% year-on-year to 7.2 million metric tons in the first eight months of the year.

In response, Thailand increased electricity production from coal-fired power plants, and hydropower output rose thanks to heavy rainfall. Imports from neighboring Laos also increased. Coal use additionally grew as Western sanctions reduced piped gas supplies from Myanmar. Analysts expect LNG demand to recover in 2026 as new contracts with Oman and the U.S. ensure stable supply.

Future Outlook for Electricity Demand

While mild weather and slower economic activity have reduced demand this year, analysts predict electricity consumption will rise in 2026 due to transport electrification, data center growth, and continued economic recovery. Thailand’s energy sector is expected to balance between coal, hydropower, and LNG to meet future needs while adjusting to changing demand patterns.