Thailand's Nuclear Power Development: A New Attempt at Southeast Asia's Energy Transition
In 2024, the Chinese government accelerated the construction of nuclear power plants and related clean energy bases, a move that surprised many with its speed. Simultaneously, the world witnessed a shift towards clean energy. Among them, Thailand made a notable decision in 2024: it officially launched a development plan for Small Modular Reactors (SMRs), marking a significant strategic shift in the Southeast Asian country's energy policy.
A Sixty-Year Journey of Thailand's Nuclear Power Plan
Thailand's journey toward nuclear power can be traced back to 1961, during the government of Sarit Thanarat, when the Atomic Energy for Peace Act was enacted, initiating nuclear energy research. In 1966, the Electricity Generating Authority of Thailand (EGAT) proposed constructing nuclear power plants, but the ambitious plan did not materialize at the time. Over the next few decades, nuclear power construction proposals reappeared in Thailand’s Power Development Plans (PDP). The 2007 and 2015 plans included nuclear power as a key option. However, the 2011 Fukushima nuclear disaster led to the suspension of these plans. The 2018 PDP even removed nuclear energy, shifting its focus to natural gas and renewable energy.
A turning point came in 2024, when Thailand's Energy Regulatory Commission (ERC) announced plans to sign a memorandum of understanding (MoU) with the Office of Atoms for Peace (OAP) to officially begin preparatory work for nuclear power projects. This time, Thailand took a more pragmatic approach — developing Small Modular Reactors (SMRs). These reactors have a generation capacity of 70-300 megawatts each, featuring a smaller footprint, enhanced safety, and lower upfront investment, making them more suitable for Thailand's mid-scale electricity market.
On November 12, a significant milestone was achieved when the shipment ceremony for Thailand's micro-reactor system and equipment took place in China. This marked a new stage in China-Thailand nuclear energy cooperation. The micro-reactor will be installed at Suranaree University of Technology in Thailand, aimed at training local talent and accumulating experience for future nuclear power development.
Investment Opportunities Arising from Nuclear Power Development
The global landscape of the nuclear power industry has been shaped by key events since 2010, involving technological breakthroughs, policy evolution, and shifts in international cooperation models. Thailand’s nuclear strategy is intertwined with this evolving context. The advancement of Thailand's nuclear power strategy will have a profound impact on Chinese enterprises operating in Thailand, creating new commercial opportunities.
Energy Dilemma and Strategic Choice
Thailand’s decision to shift to nuclear power was driven by multiple pressures. The first is energy security. Thailand's electricity generation heavily relies on natural gas, which accounts for over 65% of total power generation. However, the country's domestic natural gas reserves are depleting, and its reliance on imports is increasing. Disputes with Cambodia over the overlapping claims area (OCA) for offshore natural gas exploration have further intensified the energy security issue. Another factor is the rising electricity demand. The Electricity Generating Authority of Thailand (EGAT) forecasts that by 2037, the country's electricity demand will reach 55,000 MW, far exceeding the current capacity of 45,000 MW, creating a significant supply gap of 10,000 MW. Bridging this gap is a pressing challenge for energy policymakers. Finally, Thailand is driven by its commitment to carbon neutrality. Thailand has committed to achieving carbon neutrality by 2065, requiring a sharp increase in clean energy use. The government aims to raise the share of clean energy in electricity generation from 36% to 51% by 2037, with nuclear power playing a vital role in this transition.
Direct Beneficiaries of the Nuclear Power Industry Chain
Chinese nuclear equipment manufacturers and engineering enterprises are set to benefit directly. China's State Nuclear Power Technology Corporation (SNPTC) and other nuclear equipment manufacturers have demonstrated strong technical capabilities. Estimates suggest that the investment for one SMR ranges from $500 million to $1 billion, with equipment procurement accounting for 20%-30% of the cost, creating lucrative opportunities for Chinese nuclear equipment suppliers. Chinese construction and engineering companies will also benefit. The civil construction of nuclear power plants accounts for 30%-40% of total investment, opening opportunities for China Railway Construction Corporation (CRCC) and China State Construction Engineering Corporation (CSCEC). China's experience in building nuclear power plants gives it a competitive edge in Thailand's market.
Opportunities for Energy-Intensive Industries
The most significant impact for Chinese enterprises operating in Thailand is the potential reduction in electricity prices. It is predicted that the introduction of nuclear power could reduce electricity rates from 4 baht/kWh to 2 baht/kWh. This cost reduction will benefit energy-intensive industries such as data centers and manufacturing. Data centers, like those operated by Alibaba and Tencent, which have established data centers in Thailand, will benefit from lower operating costs, enhancing competitiveness. For manufacturers, Chinese firms in the EV (electric vehicle) supply chain will gain a cost advantage from reduced electricity bills, supporting the production of EV batteries and vehicles at a lower cost and with a lower carbon footprint.
Green Transformation and Synergies
Nuclear power, as a stable baseload power source, can support the development of renewable energy. Chinese solar companies such as LONGi and Jinko Solar, which are expanding in Thailand, may benefit from an improved market environment driven by nuclear-backed grid stability. Additionally, China's expertise in smart grids, power transmission, and distribution could be leveraged for Thailand's nuclear power project-related infrastructure development.
Opportunities and Challenges for China's EV Industry in Thailand
China’s EV industry has seen remarkable growth in Thailand. BYD is building a factory in Thailand's Eastern Economic Corridor (EEC) with an annual capacity of 150,000 EVs, while Great Wall Motors has partnered with Thai conglomerate Charoen Pokphand Group. CATL, a leading Chinese battery manufacturer, is also setting up a production base in Thailand. Nuclear power development will reduce production costs for EV manufacturers, enabling them to offer more competitive prices in the global market. Moreover, using clean electricity to produce EVs will provide a significant green branding advantage, especially as international markets place greater emphasis on product carbon footprints.
Risks and Challenges
Despite the opportunities, Chinese enterprises operating in Thailand must be aware of the potential risks associated with nuclear power development. The first is policy risk. Nuclear power projects are subject to complex regulations at every stage, from site selection to operations. Stricter regulatory oversight will increase operating costs, and public opposition may result in project delays. Market competition will also intensify. Lower electricity costs will attract more international investment, intensifying market competition. Chinese firms in electronics, textiles, and automotive sectors may face tougher competition from local and international companies.
Environmental responsibilities will bring new challenges. Companies operating near nuclear power sites may face more stringent environmental standards, requiring additional investment in risk management and operational compliance. The shift in the energy structure will affect the supply chain, as traditional energy supply chains will need to be restructured. Companies reliant on fossil fuel-related supply chains will face pressure to transition, and building new supply chains requires substantial investment and time.
Investment risk is another significant challenge. Nuclear power projects require significant upfront capital. Chinese investors in energy projects in Thailand may face higher taxes, fees, and extended payback periods. Supply chain risks also arise, as changes in the energy structure may lead to restructuring supply chains, creating additional financial and operational risks.
Thailand’s nuclear power development strategy reflects the broader challenge of energy transition facing Southeast Asia. For Chinese enterprises, this presents both an opportunity and a challenge. Opportunities lie in participating in nuclear infrastructure projects, lowering production costs, and enhancing green competitiveness. However, companies must also navigate policy risks, market competition, and supply chain adjustments. As the Belt and Road Initiative (BRI) deepens China-ASEAN cooperation, nuclear energy could become a new bridge for collaboration. Chinese firms must remain vigilant, seize the moment to innovate, and prepare for potential risks. Only by adapting to the ever-evolving landscape can they position themselves for sustainable growth amid Southeast Asia's energy transition.