Competition law and sectoral regulation on
Thai energy sector: A review and the
forward development plan
Pornchai Wisuttisak
Admitted as a lecturer in law at Law faculty,
Chiangmai University, Thailand
PhD Candidate and casual tutor, School of Business Law and Taxation,
University of New South Wales, Australia
CUTS International conference on Reviewing the Global
Experience with Economic Regulation: A Forward Looking
Perspective- New Delhi on April 18-20, 2011
Thailand Country: Overview

Region : South East Asia

Population: 66.51 million
Area: 513,115 sq km ( India has territory
at nearly 3.3 million sq km)
GDP per capita: approx US $8.2billion


Synopsis of the presentation

1. Thai energy sectors : Liberalisation and
market reform

2. Problems on Thai Competition law and
Energy sector regulation

3. Plan for reform on competition law and
sectoral regulation: the short and long term
proposal
1. Thai energy sectors: Liberalisation
and market reform
1980s policy on liberalization of utilities,
including energy
 Establishment of National Energy Policy
Office(NEPO)
 NEPO set up the plan on liberalization and
corporatization of government owned utilities
in energy sector


Electricity

Oil and gas
Liberalisation on electricity
sector

Permitting private participant of SPP and IPP

Establishment of two large IPPs are Electricity
Generating Company Limited (EGCO) and
Ratchaburi Electricity Generating Holding
Public Co., Ltd (RATCH)

The two IPPs still under control of Electricity
Generation Authority of Thailand (EGAT) (
SOE)
Master plan electricity
liberalization
I: Reform of Electricity
Supply Industry (ESI)
IV: Competitive
wholesale power pool /
introduction of retail
competition (From
2003 onward)
II: Using EGAT as the
primary power
purchaser (1998-2001)
III: EGAT as the central
supplier of power, with
gradual introduction of
competition. (20012003)
Cancelation of the Master Plan
Taksin’s government tried to liberalise electricity
without a structural change
 The plan created uncompetitive electricity
market and deriving state monopoly market
power to privatised EGAT
 The plan was then challenged by the Federation
of Thai consumers in the Supreme Administrative
court case

Liberalisation on oil and gas
sector

NEPO also proposed plans to liberalise gas by
deregulation of the gas sectors and privatisation
of the Petroleum Authority of Thailand (PTT)

The set framework was mainly focus on the open
and disintegration of gas pipeline and
distribution
Master Plan for Oil and Gas
liberalization
Step 1) Structural
separation
Adopting separation
of transmission and
supply & marketing
businesses
Step 2) Establishment
of Access to essential
facilities
• open the free and fair
access to essential
facilities of gas pipe line
under PTT
Step 3) Privatisation
of PTT
• Listed the PTT in stock
market and open market
for more private
paticipants
Inconsistency of implementation
The government implemented the PTT
corporatisation without, steps 1) and 2)
 Implement only 3) by corporatisation PTT via
IPO in Thai Stock market
 PTT monopoly of gas and oil market after the
corporatisation
 Challenged in the Supreme administrative court
case

Supreme Administrative Court
decisions

EGAT corporatisation case
 Revocation of EGAT corporatisation
 Reasons - there is the possibility on uncompetitive market
condition after the EGAT corporatisation
 Inequality on business competition

PTT corporatisation case
 Not necessary to revoke the Royal decrees on corporatisation
of PTT
 Separation of state assets of land and gas pipelines from PTT
Plc
 Cancel transferring of the state authoritative power to PTT
Plc
Current energy market structure
EGAT –monopoly of
power generator
Monopoly gas supply
PTT–monopoly oil
and gas
Gas is the major sources
of electricity generation
PAE-Provincial
distributor and
retailer
MEAMetropolitan and
suburban
distributors and
retailer
Thai Electricity generation in 2008
Renewable energy
1.4%
Import coal
8.2%
Oil
1.0%
Gas
70.0 %
Lignite
12.6%
Hydro
4.7%
Diesel
Import from
0.2 %
Laos 1.6%
Import from
Malaysia
0.3Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper
presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai language) 2007).
%
13
13
National plan on sources of electricity generation
Million
2%
2%
9%
2%
2%
2%
3%
3%
2%
2%
2%
6%
3%
7%
6%
10%
6%
11%
11%
15%
5%
10%
10%
16%
15%
9%
8%
7%
7%
3%
19%
8%
8%
7%
18%
17%
7%
6%
6%
7%
8%
5%
8%
11%
11%
11%
10%
73%
70%
69%
67%
69%
68%
69%
65%
61%
62%
63%
61%
60%
4%
4%
4%
3%
3%
3%
3%
3%
3%
2%
2%
2%
2%
9%
10%
9%
9%
Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai
language) 2007).
ปี
14
Electricity generators’ market shares
EGAT hold majority
share of two largest
IPP (Ratchaburi Electricity
EGAT
15,021.0 MW 50.3%
SPP
2,079.1 MW
7.0%
Import from
Laos 340
MW
1.1%
IPP
12,151.6 MW
40.7%
Generating Holding PCL and
Electricity Generating Company
Limited )
Source: RATCH (2009) Ratchaburi Electricity Generating Holding Public
Company Limited (RATCH) annual report 2008. RATCH p 60 and
EGCO (2009) Corporate Presentation Quarterly Financial Results Ended
31 March 2009. EGCO p 5
Import from
Malaysia
300 MW
1.0%
Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper
presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai language) 2007).
15
PTT Business chains in oil and Gas
16
2. Problems on Thai Competition
law and Energy sector regulation
 Thai

competition law
Thai Energy sector regulation
Problems on Thai competition law
 Institution problems on Thai
competition law
 Influence from government and business
lobby
 Financial constraint
 Lack of expert
 Lack of coordination with sectoral regulation
Problems on Thai competition law(
cont)
 The Competition law
exemption and limited
role on energy sector
 EGAT, MEA, PEA, and PTT, Pcl
are SOEs
Problems on Thai Energy
regulation
ERC institution
 Energy regulation and the Conflict between
supporting SOEs and promoting market
competition
 Lack of rule for open to access to essential
facilities or third Party access on electricity
infrastructure

Problems on Thai Energy
regulation (cont)

ERC institution



http://www.erc.or.th

ERC structure and research on energy
sector mostly relies on private sector
Lack of regulatory capacity for
monitoring electricity grid
No clear line of authorities in
reviewing and setting tariffs
Face with politically strong SOEs
Problems on Thai Energy
regulation (cont)

Conflict between supporting SOEs and
promoting market competition

section 7(3) of Energy Industry Act states that ERC has to
promote competition in the energy industry and prevent
abusive use of dominance in the energy industry

section 8(5)states that ERC has to support and maintain SOEs
as monopoly enterprises
Problems on Thai Energy
regulation ( cont)
 No access to essential
facilities in the Energy Act
3. Plan for reform on competition
law and sectoral regulation
 Short term plans
 ERC action on market competition
 Build public recognition on competition
law
 Advocacy between competition law and
the sector regulation
 Long term strategy
 Establishment of National Competition
Council
 Reform on Thai Energy sectoral
regulation
 Reform on Thai competition law
 Establish formal and effective work
coordination between competition law
and sectoral
Conclusion

Inappropriate liberalization

Current uncompetitive structure under
SOEs monopoly

Problems on Thai competition law

Problems on Energy regulation

Short- term plan

Long- term plan
धन्यवाद
Thank you
Kob Khun Krub
Pornchai Wisuttisak
Contact No. +61 433 223 618
Email p.wisuttisak@unsw.edu.au