The new production licence covers an area with proven coal reserves of 178 million tonnes, spread across 3,664 rai.
Egat's deputy governor for fuel, Suttipong Teppitak, yesterday said mining was expected to start in March and supply at least 8 million tonnes of coal per year to its Mae Moh power plant.
The power plant has an annual production capacity of 2,400 megawatts, which accounts for 12 per cent of the country's electricity generation.
Half of the Mae Moh power plant's output serves demand in the North, while 30 per cent is sent to the Central region and 20 per cent to the Northeast.
Egat presently produces 70 per cent of its electricity from natural gas, 18 per cent from coal and 4 per cent from hydropower. The remaining 8 per cent is bought from a private power generator.
It had earlier planned to boost the proportion of coal-powered production to 50 per cent, which would help cut the electricity price because the production cost of coal is lower than that for using natural gas.
However, it faced strong resistance from communities when it wanted to build coal-fired power plants in the past, particularly in the Bo Nok and Hin Krut areas of Prachuap Khiri Khan.
Suttipong said the cost of coal-fired power production is 55 satang per unit, while the cost of natural gas-based production is Bt1.75 per unit.
"We still want to increase the proportion of power production from coal, because the price is more stable than for other types of fuel and it can be mined in the country. However, this will mainly depend on the Cabinet's resolution," he added.
Egat has located a total of 864 million tonnes of coal in the Mae Moh mine, which is expected to keep its power plant supplied until 2035. Of that amount, 284 million tonnes have already been mined.