Rethinking “energy security” and power
sector planning:
a case study of Thailand
18-19 January 2012
Chuenchom Sangarasri Greacen
Palang Thai
"Know Your Power“ International Conference
Towards a Participatory Approach
for Sustainable Power Development in the Mekong Region
Brief history of Thai power sector
• 1960s: decentralized coops in close competition with
centralized utilities as the model to electrify
Thailand.
• Centralized model chosen not by technical superiority but
rather by Cold War politics
• 1960s-90s: rapid expansion of power system by
state-owned utilities
• World Bank and aid agencies had major roles
• 1990s: neoliberal reforms
• Partial divestiture of EGAT’s generation assets (EGCO, RATCH)
• Small and Independent Power Producers (SPPs/IPPs)
• Role of private foreign capital
Brief history of Thai power sector (2)
• 2000s-present:
• Plan to create Power Pool abandoned
• Attempt to partially privatize (equitize) monopoly EGAT in
the stock market thwarted by civil society’s lawsuit
• But increasing financialization of electricity in the stock
market continued via EGAT’s subsidiaries, other Thai
energy companies and their joint ventures with foreign
capital
• Increasing roles of Thai listed non-energy companies (e.g.
construction) in power project investment
• Mushrooming power projects, domestic & trans-boundary
ISSUES AND TRENDS IN POWER SECTOR
PLANNING AND DEVELOPMENT
Changing role of electricity
• Electricity as public service  profitable
commodity
• Commons like rivers  trans-boundary
commodities
Changing role of policy makers:
Serving public or corporations?
Performance of high-level energy officials in
serving the government vs. PTT Plc. (Thai
gas/oil utility, the largest list company in Thailand)
Attendance of PTT
board meetings*
Attendance of
Automatic Tariff (Ft)
mechanism mtgs**
Permanent
Secretary
13/13
4/6
Director of
EPPO
8/9
100%
90%
5/6
*จากรายงานประจาปี บมจ. ปตท. ปี 2546
**ตั้งแต่มีการปรับองค์ประกอบคณะอนุกรรมการ Ft โดยแต่งตั้งให้นายเชิดพงษ์เป็ นประธาน และนายเมตตาเป็ นรองประธาน (ปลายปี 46)
67%
83%
Hybrid identity, conflict of interest
Source: www.ratch.co.th
Power projects and policies driven by
companies
• Power Development Plan (PDP) used to be the
master plan for capacity expansion
• Determines how many of which kind of plants get
built when
• But now some projects were on “fast track”
even before being listed in the PDP, e.g.
• 1,260 MW Xayaburi dam
• 4,000 MW coal-fired plants in Dawei
Energy policy and plans become tools to drive the
stock market and churn profits
• The coup-installed government announced its policy on
energy investment opportunities on 3 Oct 2006
• Energy policy, PDP approval and IPP bidding resulted in
significant windfall benefits for selected companies
• 1 year later, the share prices of companies benefiting from
the PDP jumped 66% (other companies had a 8.7% rise)
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22,126
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Investment disconnected actual need
for electricity
• Criteria for determining generation
requirement:
• Reserve margin (capacity in excess of peak demand) ≥ 15%
• Yet Thailand’s PDP2010 adds generation:
•
•
•
•
•
920 MW Nam Theun 2 when reserve margin > 28%
597 MW Nam Ngum 2 when reserve margin > 27%
660 MW Gheco1 when reserve margin > 27%
1600 MW SiamEnergy when reserve margin > 25%
and many more….
Planned new investments are so excessive
despite exaggerated “needs”
Used to justify NT2
5,800 MW
The year NT2 came online
Over-investment = unnecessary impacts,
burden on consumers
and economy
Thai power sector suffered from
“over-capacity worth 400 billion
Baht” (from total assets of 700 billion
Baht and annual turnover of 240
billion Baht)
– PM Thaksin Shinwatra, 2004
Wasteful inefficiency
changing energy intensity over 20-yr period
Data source: Energy Information Administration 2008
Extreme inequality
Structural violence in the name of “energy security”
Siam Paragon
Electricity production
and consumption
(GWh)
Impacts of Pak
Mun Dam alone
123
MBK
Loss of livelihood
for >6200 families
Loss of 116
fish species (44%)
Fishery yield
down 80%
Pak Mun
81
Dams
Central World
Malls
Mae
75
Hon
65
g
Son
g
Province
Source: MEA, EGAT, Searin, Graphic: Green World Foundation
1700 families
relocated
TIME TO RETHINK
“ENERGY SECURITY” &
POWER SECTOR PLANNING
What is “energy security”?
A.
B.
C.
D.
The more, the better
Resource adequacy (availability)
Resource adequacy & affordability.
Resource adequacy & affordability &
efficiency
E. Resource adequacy & affordability &
efficiency & environmental quality
Source: Brown, Marilyn A., 2011
What is “energy security”?
A.
B.
C.
D.
The more, the better
Resource adequacy
Resource adequacy & affordability.
Resource adequacy & affordability &
efficiency
E. Resource adequacy & affordability &
efficiency & environmental quality
Government Policy Framework
according to Energy Industry Act 2007
4 dimensions of
energy security
Energy Industry Act 2007
Indicators
Availability
- Resource Adequacy
- Min. dependency on imports
- Diversification (supply disruption)
- Reserve margin ≥15%
- % energy imports
- Concentration (plant)
Affordability
- Affordable cost of service
- Min. exposure to price volatility
- Electricity cost (B/mo.)
- % exposure to oil price
Efficiency
- Energy & economic efficiency
- Energy intensity
(GWh/GDP)
Environment
- Min. environmental impacts
- GHG emissions
- SO2 emissions
Need to make “energy security”
and PDP accountable to
government policy framework
Framework for
evaluating PDPs
MAKING NEW & IMPROVED
POWER DEVELOPMENT PLANS
PDP 2010
70,000
nuclear
EE/DSM
60,000
Others
Oil/gas
50,000
RE DEDE
Cogen
Hydro imports
40,000
Hydro
Gas
30,000
Coal
New generation includes:
11,669 MW of imports
8,400 MW of coal plants
16,670 MW of gas plants
5,000 MW of nuclear
20,000
10,000
0
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2000
Past actual averages:
830 MW/yr (25 yrs)
813 MW/yr (15 yrs)
772 MW/yr (10 yrs)
407 MW/yr ( 5 yrs)
Avg forecast increase
1,491 MW/yr in PDP 2010
1500
1000
Avg forecast increase
830 MW/yr in PDP2012
500
Actual
-500
Forecast
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0
New & improved PDPs
• New PDP based on more realistic demand
forecast = “PDP2012”
• Improved PDP based on PDP2010 forecast =
“PDP2010v2”
Methodology
– Maintain 15% minimum reserve margin
– Prioritize investment in energy efficiency (EE)/ demandside management (DSM) as a resource option
– Consider life extension (delayed retirement) of power
plants as a resource option
• Additional investment might be required but only done in cases
that are economic compared to building a new power plant.
– When additional capacity is needed, prioritize (highefficiency) cogeneration over (inefficient) centralized
generation
– New generation not already under construction may be
removed if not needed to maintain 15% reserve margin
EE/DSM cumulative savings in
PDP2012 and PDP2010v2
EE/DSM cumulative savings in PDP2012 or PDP2010v2 (MW)
10500
EE savings (PDP2010)
9000
7500
Additional EE savings
consistent with the
government's 20-yr EE
Plan (PDP2012)
6000
4500
3000
1500
0
2010
2013
2016
2019
2022
2025
2028
DSM/EE are the cheapest options to meet growing
demand (but not yet considered an option in Thailand)
Real Levelized Cost (Cents/kWh - 2000$)
12
Cost comparison for different supply
options in Pacific Northwest, USA.
10
EE
8
Renewables
Coal
6
Gas turbines
Combined cycle
4
2
0
245
514
1598
2202
2560
3444
4934
6735
Cumulative Resource Potential (Average Megawatts)
Resource potential for generic coal, gas & wind resources shown for typical unit size.
Additional potential is available at comparable costs.
Source: Northwest Power and Conservation Council
8945
DSM saving potential is under utilized in Thailand
35,000
GWH/year
30,000
Pacific Northwest
USA
PDP 2010 (Thailand)
35000
DSM/EE measures led to savings
of over 30,000 GWH/yr
30000
25,000
25000
20,000
20000
15,000
15000
10,000
10000
5,000
5000
0
1978
1982
BPA and Utility Programs
1986
1990
NEEA Programs
1994
1998
State Codes
2002
2006
Federal Standards
ทีม
่ า: Tom Eckman, Northwest Power and
Conservation Council, 2009.
0.3% saving
in 20 yrs
0
2553 2555 2557 2559 2561 2563 2565 2567 2569 2571 2573
ทีม
่ า: สไลด์แผ่นที1
่ 9, สมมติฐานและภาพรวมร่าง
แผน PDP 2010, 17 กุมภาพันธ์ 2553.
http://www.eppo.go.th/power/pdp/seminar17feb2553/assumptions-PDP2010.pdf
Cogeneration (Combined Heat and Power – CHP)
Cogeneration in PDP 2012
Application
Existing signed PPAs
MW
3790
Program
SPP
Approved but not yet signed PPA
New cooling CHP projects under 10 MW
each -- identified in (Menke et al., 2006)
New VSPP in ceramics, paper, pellet and
other industries
0.9% per year growth in opportunities
over next 18 years
2835
3500
SPP
VSPP
(not
counted)
1700
VSPP
Total
11825
SPP+VSPP
PDP2012 adds 4,800 MW of cogeneration
beyond what was already in the plan
Plant life extension (1)
Power plants to be
decommissioned in PDP2010
EGAT
Nam Pong CC #1้้
Nam Pong CC #2 ้
Bang Pakong TH #1-2
Bang Pakong TH #3
Bang Pakong TH #4
Bang Pakong CC # 3
Bang Pakong CC # 4
South Bangkok CC #1
South Bangkok CC #2
Mae Moh TH # 4
Mae Moh TH # 5-6
Mae Moh TH #7
Mae Moh TH # 8
Mae Moh TH #9
Wang Noi TH #1-3
MW
325
325
1,052
576
576
314
314
316
562
140
280
140
270
270
1,910
Extended life to
Plant life at
delay
decommissioni decommissioning
ng
and construction of
new plants*
25
25
30
30
30
25
25
25
25
40
40
40
40
40
25
30
30
30
30
30
* Plant life extension may require additional investments and time to maintain and upgrade equipment. The time and resources
required to extend plant life are usually significantly less than building a new one. However, more detailed assessment should be
done on a case by case basis to ensure technical and economic feasibility of plant life extension.
Plant life extension (2)
Power plants to be
decommissioned in PDP2010
MW
Extended life to delay
Plant life at
decommissioning and
decommissionin
construction of new
g
plants*
IPPs
Khanom TH #1
Khanom TH #2
Khanom CC #1
Eastern Power
Glow IPP
Independent Power (Thailand)
(IPT)
Tri Energy Co., Ltd
Hauay Ho
Theun Hinboun
Rayong CC #1-4
Ratchaburi TH #1-2
Ratchaburi CC #1-2
Ratchabuti CC # 3
70
70
678
350
713
15
20
20
20
25
700
700
126
214
1,175
1,440
1,360
681
25
20
30
25
20
25
25
25
30
30
30
30
30
30
30
* Plant life extension may require additional investments and time to maintain and upgrade equipment. The time and resources
required to extend plant life are usually significantly less than building a new one. However, more detailed assessment should be
done on a case by case basis to ensure technical and economic feasibility of plant life extension.
Renewable Energy
• Same amount as planned in PDP2010
• PDP2010 did acceptable job of including more
RE
• RE projects also have impacts and face
community opposition
• Need to address EIA loophole for projects < 10
MW to address environmental concerns
Summary of different PDPs
2010
Generation by fuel
type
MW
%
Coal
3,527
11%
PDP 2010
PDP 2010 v. 2
PDP 2012
2030
2030
2030
MW
12,669
%
19%
MW
6,269
%
13%
MW
3,087
%
9%
Gas
Hydro – EGAT
Hydro – imports
16,091
3,424
1,260
51%
11%
4%
21,668
3,936
9,827
33%
6%
15%
15,972
3,936
3,827
34%
8%
8%
9,572
3,936
1,737
27%
11%
5%
Cogeneration
Renewables
Oil/gas
Nuclear
Others (fuel oil,
diesel, Malay)
1,878
767
3,784
0
6%
2%
12%
0%
7,024
4,804
0
5,000
11%
7%
0%
8%
11,824
4,804
0
0
25%
10%
0%
0%
11,824
4,804
0
0
33%
14%
0%
0%
619
2%
619
1%
619
1%
619
2%
100%
65,547
100%
47,251
100%
35,579
100%
Total generation 31,350
Additional EE/DSM
savings
Total Resources
31,350
-
13,160
9,923
65,547
60,411
45,502
Comparing PDPs
PDP2012
0,000
PDP2010v2
PDP 2010
70,000
nuclear
0,000
60,000
0,000
50,000
EE/DS
M
Others
Oil/gas
RE
DEDE
Cogen
0,000
40,000
Hydro
imports
Hydro
0,000
30,000
Gas
Coal
0,000
20,000
0,000
10,000
0
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
0
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 20302010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Dependency on electricity/fuel imports
GWH
250,000
200,000
Uranium
(Kazakhstan/Australia)
Power imports
(Laos/Burma/Malay)
Diesel
150,000
100,000
Fuel Oil
Gas imports
(Burma/Middle East)
Coal imports
(Indonesia/Australia)
50,000
0
2010
PDP2010
PDP2010v2
PDP2012
Cost of service (Baht/month)
change in 2030 compared to 2010
6%
Cost of service (Baht/month)
4%
500
3.5%
1.3%
2%
450
0%
400
-2%
350
-4%
PDP2010 PDP2010v2 PDP2012
-6%
300
-8%
250
-10%
200
-12%
150
-14%
-16%
100
50
0
2010
PDP2010
PDP2010v2
PDP2012
-13.2%
Exposure to price volatility risks
change in 2030 compared to 2010
0.00%
PDP2010
PDP2010v2
PDP2012
-5.00%
-10.00%
-15.00%
-20.00%
-18.87%
-20.81%
-25.00%
-30.00%
-35.00%
-29.65%
Energy intensity
change in 2030 compared to 2010
Energy intensity (GWh/GDP billion Baht)
10.0%
5.0%
4.1%
0.0%
PDP2010
PDP2012v2
PDP2012
-16.7%
-16.7%
-5.0%
-10.0%
-15.0%
-20.0%
Emissions of air pollutants
change in 2030 compared to 2010
450%
400%
350%
300%
250%
PDP2010
PDP2010v2
200%
PDP2012
150%
100%
50%
0%
-50%
GHG
Nox
SO2
TSP
Hg
Comparing PDPs against different
elements of energy security
change in 2030 compared to 2010
PDP2010v2
PDP2010
42%
52%
56%
-17%
-13%
-21%
-97%
PDP2012
18%
4%
-15%
1%
-17%
-19%
-97%
Concluding remarks
• Worrying trend of commoditizing electricity
• “Energy security” and PDP process distorted to
generate profits for a few at the expense of
– Affected communities
– Consumers
- Environment
- Economy
• Need framework to hold “energy security” and PDP
accountable to Energy Industry Act & the public
• Need to reform PDP process to prioritize cheaper,
cleaner options to meeting demand
• Proposed PDP2012 better achieves energy security
without the need for new green-field centralized coal/
gas/dam/nuclear.
Thank you
www.palangthai.org
Source: The 5th NW Electric Power and ConservationPlan
Supply options in NW USA
Source: The 5th NW Electric Power and ConservationPlan
Supply options in NW USA