Thailand faces up to its energy future with a smile

I cannot profess to have seen many politicians speaking in person, but I have certainly heard enough of them on the television or on the radio to know that they rarely answer the questions asked, have a tendency to avoid controversial subjects, and consequently tell you only what they want you to know. Therefore, I would not normally associate words such as ‘candid’ or ‘open’ with politicians. However, I recently had the opportunity to listen to a politician, who went against this perception.

The politician was Dr Piyasvaasti Amarand, Thailand’s minister of energy, who gave a keynote at this year’s POWER-GEN Asia event, which took place last month. In his address he talked both openly and frankly on his government’s initiatives to meet the challenge of ensuring that Thailand’s power sector has a sustainable future. He gave an overall investment figure of THB457 billion ($7 billion) between 2007-2011, which would need to almost double between 2012-2016, to even get close to achieving this goal.

Thailand’s electricity demand is currently growing at a rate of five per cent a year. In 2006, consumption was estimated at 134 000 GWh, up from 128 000 GWh in 2005. As part of his keynote, Dr Piyasvaasti presented a power development plan (2011-2021) based on the most likely scenario. It showed that Thailand’s peak demand would increase to 35 250 MW by 2015 and 49 000 MW by 2021. To satisfy this demand, total generation capacity would need to increase to 42 200 MW and 58 300 MW by 2015 and 2021, respectively. This represents close to 32 000 MW of new capacity by 2021. But how would this additional generation capacity be achieved? Dr Piyasvaasti explained that this could be achievable through a combination of new builds, including projects from independent power producers (IPP), and through power purchase agreements with neighbouring countries

In addition to the dominant incumbent, the Electricity Generating Authority of Thailand (EGAT), there are a number of IPP and small IPPs (<10 MW) operating in the country. According to Dr Piyasvaasti, the government wants to encourage greater generation capacity from IPPs, and has set targets of 800 MW of additional generation from IPPs in 2012, doubling to 1600 MW in 2014. Through simplifying the IPP solicitation process, it hopes to encourage more IPP bids.

Thailand already has power purchase agreements with a number of its neighbours, such as the 300 MW power link with Malaysia. Recently, it signed a memorandum of understanding with Laos, where Thailand will buy 5000 MW of hydroelectricity by 2015. In a World Bank Seminar on sustainable hydropower development, which took place a few days after his keynote Dr Piyasvaasti announced that Thailand would buy an additional 2000 MW, which would be ready to enter its national grid between 2016 and 2020.

Dr Piyasvaasti also made it clear that a key objective of the government was to diversify the country’s fuel types. Currently, the country relies heavily on fossil fuels. In 2006, natural gas’ share of the generation mix was 65 per cent, while coal and lignite accounted for 16 per cent. He stressed that this reliance, especially on natural gas, had to be reduced. Currently, renewables accounts for around 5 per cent of generation and its share would increase in the future. However he also took the opportunity to reaffirm his country’s desire to move into nuclear power and build at least four nuclear plants in the next decade. Subsequent to his keynote Dr Piyasvaasti was quoted in the Bangkok Post, as saying, “In the long run, we have to look at something that is sustainable, cost effective and something that doesn’t worsen global warming. The only answer is nuclear. Without nuclear power, you cannot reduce greenhouse gases.” Although cynicism exists regarding the viability of a relatively small country going down the nuclear path, Dr Piyasvaasti clearly sees that having nuclear power makes sense for Thailand, especially in the longer term.

He also did not shy away from controversy in his keynote, levelling criticism at the World Bank and the Asian Development Bank for sometimes hindering rather than helping power projects to get off the ground. Furthermore, as he drew his address to an end, after reinforcing the point that climate change was a global problem, he showed a slide that further emphasized this – when annual carbon dioxide emissions are measured on a per capita basis Singapore far outstripped both the USA and China. This certainly provoked some sharp intakes of breath from the floor.

Best regards,
Heather Johnstone
Senior Editor

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