Asia is looking at independent power to supply new capacity
With double-digit growth in electric consumption Asian countries are opening up generation to competitive independent power producers
By Douglas J. Smith,
Independent power plant developers are now actively looking at the Asian electric power market for their future growth. Early this year Power Engineering International sponsored an Independent Power Pro- ducers seminar in Kuala Lumpur, Malaysia. At this conference speakers from Thailand, Indonesia, Philippines and Malaysia discussed the opportunities now available in Asia for independent power producers (Figure 1).
Malaysia has three electric utilities: Tenaga National Berhad (Tenaga), Sarawak Electric Supply Corp. (SESCO) and Sabah Electric Board (SEB). Currently the total installed electric capacity of Malaysia is 7,240 MW with the majority, 6,263 MW, being supplied by Tenaga. Tenaga is responsible for the generation, transmission and distribution of electric power in peninsular Malaysia which is home to 80 percent of the country`s 18 million people. SEB and SESCO supply electricity to the eastern Malaysia states of Sabah and Sarawak on the island of Borneo.
Malaysia plans to double its electricity capacity to 15,000 MW by the year 2000. In addition, if current projections are correct the country`s demand for electricity could reach 25,000 MW to 30,000 MW by 2020. Although Malaysia`s electric utilities will continue to serve the country`s electric needs the government is opening up the generation side of the industry to competition through deregulation. However, the transmission and distribution of electricity in Malaysia will remain a monopoly. To date five independent power producers have received licenses to construct power plants.
In addition to the need to add new capacity, Malaysia is looking at rehabilitation of existing power plants. Priority is being given to upgrading 420 MW to duel oil/gas firing. Equipment for the new power plants and rehabilitation projects will be supplied by overseas companies.
Increasing industrialization in Thailand
Rapid economic expansion in Thailand has drastically increased the demand for electricity. Amorn Phandhu-Fung, Energy Economic Division director, Thailand, a speaker at the Asia Business Forum, said that to sustain the high level of economic development will require Thailand to construct 1,000 MW of new electric capacity per year for the next 10 years. An investment of (US)$2 billion annually.
Total installed electric capacity in Thailand at the end of 1993 was 12,720 MW and peak demand was 9,730 MW. However, Thailand`s peak demand is expected to increase to 13,075 MW by 1996. In 1993 61 percent of the electricity was supplied by thermal plants, 31 percent by combined-cycle, 6.2 percent by hydro and the remainder by gas turbine, diesel and geothermal power plants. Thailand also imported 844.5 GWhr of electricity from the People`s Republic of Laos and Malaysia.
Thailand uses a variety of fuels in the generation of its electricity including natural gas 47.2 percent, fuel oil 30 percent and lignite 21 percent. A small amount of diesel fuel, less than 2 percent, is used for electric generation.
The Electricity Generating Authority of Thailand (EGAT) is the major electric generating utility in the country. Two others–the Metropolitan Electricity Authority (MEA) and the Provincial Electric Authority (PEA), which buys its power from EGAT– supply utilities. MEA distributes and sells power to Bangkok and the provinces of Sumat-prakarn and Nonthaburi while PEA supplies power to the rest of the country.
In cooperation with MEA and PEA, EGAT has the responsibility of preparing Thailand`s “Power Development Plan.” The plan outlines the country`s long term electric energy needs and how they can be accomplished. According to the latest plan, Thailand needs to construct 19,756 MW of new generating capacity. Right now, 1,570 MW is under construction with 8,360 MW awaiting approval (Table 1). The remaining 9,826 MW of new capacity will be constructed between 1997 and 2001. By the year 2006 the total installed electric capacity in Thailand will be nearly 31,000 MW.
Conservation and DSM are important
To reduce energy consumption, and for environmental protection, Thailand is promoting energy conservation. The most important aspect of Thailand`s energy conservation program is its Energy Conservation Act. This act, approved by the government in 1992, gave the Department of Energy Development and Promotion (DEDP) the responsibility of regulating and implementing the country`s energy conservation program. DEDP has the authority to issue ministerial orders on building energy codes and appliance efficiency standards. Under the act DEDP must identify “controlled facilities,” that is, facilities that consume large amounts of energy.
Thailand has established an Energy Conservation Promotion Fund (ECPF). ECPFs are available to the controlled facilities to support energy conservation programs. The funds can also be used for training, promotion of energy conservation, research and demonstration, as well as for technology transfer.
In 1990 Thailand`s National Energy Policy Group requested that EGAT, MEA and PEA prepare demand-side-management (DSM) plans. By the end of 1997 Thailand`s target is to reduce the demand for electricity, through DSM, by 238 MW. This will be accomplished by consumer education, promotion of energy efficient buildings and appliances, and control and monitoring of DSM programs.
Philippines needed immediate relief
As early as 1987 the Philippine government took steps to privatize its electric power sector when it issued Executive Order No. 215. Rules and regulations to implement the order were published in 1989. The privatization program allowed the first private power generation plant to be built–the 210-MW Hopewell power generation plant in Navotas, Rizel. This plant went into operation in 1991.
It was constructed for the Philippine National Power Corp. (NAPOCOR) under the company`s private power and fast track programs. NAPOCOR, with an installed capacity of more than 6,600 MW, is the major generation and transmission utility in the country. Manila Electric Co. is the country`s largest distributor of electricity.
In addition to the Hopewell plant, three diesel generating plants, with a total generating capacity of 363 MW, have been put into service. These diesel plants are in Pinamucan, Batangas, Bauang, La Union and Mindanao. In addition, a 300-MW combined-cycle plant was constructed in Bataan. Prior to construction of these plants the areas were all experiencing severe electric power shortages.
Although the Executive Order has opened up the Philippine electric generation market to private power the rules and regulations issued in 1989 limit the sale of electricity. Under the rules, private power producers can only sell their power to NAPOCOR. However, the Department of Energy has adopted an interim policy that allows the country`s electric distributors to contract directly with private electric power generators.
Consumption grows 14 percent per year
Since 1969 the growth in consumption of electricity in the public sector, served by Indonesia`s State Electricity Corp. (PLN), has grown at an average rate of 14.7 percent per year, said Moeljadi Oetii, Ministry of Mines and Energy director of private power. Electricity supply in Indonesia is primarily met by PLN, 58 percent, and by captive industrial generators who supply 42 percent, mainly for their own use. Captive generators use diesel engines to generate 62 percent of their electricity needs while gas turbines and hydro plants each supply 12 percent. The remainder of their needs are supplied from oil, gas and wood-fired steam plants.
Indonesia has a variety of energy resources but until 1984 most of the electricity was generated by oil-fired power plants. In 1984 fuel oil accounted for 79.4 percent of all the electricity generated. However, by the end of 1989 this had dropped to 46.3 percent and by 1990 to 37.2 percent. Since 1985 the use of coal for electric production has increased 700 percent.
To meet the demand for electricity through 2004 will require the addition of 24,000 MW. An annual growth rate of 16.1 percent is predicted over the next five years. It is estimated that Indonesia has the potential to generate 75,000 MW from the development of hydropower and 10,000 MW to 15,000 MW from geothermal sources. The island of Java alone has about 8,000 MW of geothermal potential.
The Indonesian government has three major objectives for the power generation sector: Reduce the amount of oil used for the generation of electricity; increase the development of private power development; and expand rural electrification programs. Currently only about 30 percent of Indonesian villages have electric power.
Many Asian countries are now privatizing the generation electricity to make it more competitive. However, to meet this challenge independent power plant developers must be prepared to construct efficient state-of-the-art power plants.
Figure 1. Relationship of countries in Southeast Asia.
Table 1. Existing and future capacity additions in Thailand 1994-2002. Source: Department of Energy and Promotion Ministry of Science Technology and Environment, Thailand.