Dr, Sivavong Changkasiri, Chairman of the Board of DIrectors, Electricity Generating Authority of Thailand

Since the unexpected financial crisis in 1997, many countries in Asia have experienced the contraction of their economic growth. The impact of the current economic downturn varies widely among countries in Asia. This economic downturn has in turn slowed growth in energy demand, creating the delay or cancellation of power investment projects.

In spite of the slowdown in electricity demand in the past years, there are strong indications that the region will be on the rebound soon, reflecting the improving economic conditions. This anticipated financial recovery of Asia will naturally trigger the acceleration of economic activity.

With a forecast for a dramatic upsurge in energy demand, the first anticipated challenge will be energy security issues. A power shortfall could occur in the system due to inadequate expansion capabilities.

With regard to future sources of electric power generation, gas is forecasted to have greater importance as a fuel source. Coal, nuclear and renewable energy – predominantly hydro – will retain their percentage of fuel sourcing while oil will decline in importance, although its absolute level will remain roughly constant. A significant proportion of the fuel development trends in Asia is based on the local availability of fuel sources.

Power generation from fossil fuels brings pollution and environmental problems. Various possible mechanisms must be considered in order to combat environmental degradation through sustainable energy development. This has been widely recognised by the global electricity industry as the most appropriate way to sustain socio-economic development while maintaining the ecological balance and the quality of the environment. Both energy conservation and improvements in the end-use energy have consequently become important considerations in many Asian countries.

In terms of coordinating infrastructure investment in Asia, the sharing of energy resources will be the best way forward for energy management. The most productive method of exploiting the rich energy resources in the region is to extend cooperation with neighbouring countries through interconnected grid systems. The development and accomplishment of the Asian Interconnection Projects will be a breakthrough, in terms of the regional energy benefits, as well as strengthening cooperation in the region.

Due to the capital-intensive investment needs of power generation and transmission development projects, the governments of many Asian countries could ease their burdens by welcoming more private sector involvement in the electricity supply industry. Privatization of the power generation industry and the restructuring process would require either the sale of power plants, or the initiation of power production business projects, which would foster transaction opportunities for power developers. Through this power sector reform, the financial problems, which are the major hindrance to the success of the power generation industry, could be overcome.

The potential for private involvement in the region’s power sector is quite clear. Countries in Asia are still the place where favourable economic aspects could be derived by power developers. Thailand, with its advantageous geographical location in the sub-region of Asia, could play a vital role as the power co-operation centre. It could be the gateway for power transfer between Indochina and the rest of the Asian countries – to intensify and co-operate for the mutual benefit of all concerned.