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Energy in Thailand

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Energy in Thailand refers to energy and electricity production, consumption, import and export in Thailand. According to the Ministry of Energy, the country's primary energy consumption was 75.2 Mtoe (million tonnes of oil equivalent) in 2013, an increase of 2.6% over the previous year.[1] According to British Petroleum, energy consumption was 115.6 Mtoe in 2013.[2]

75% of Thailand's electrical generation is powered by natural gas in 2014.[3]

Overview

Thailand produces roughly one-third of the oil it consumes. It is the second largest importer of oil in SE Asia. Thailand is a large producer of natural gas, with reserves of at least 10 trillion cubic feet. After Indonesia, it is the largest coal producer in SE Asia, but must import additional coal to meet domestic demand.

Electricity production

Ninety percent of Thai electrical generating capacity is conventional thermal. Oil-fired plants have been replaced by natural gas, which as of 2014 powers 75% of electrical generation. Coal-fired plants produce an additional 20%, with the remainder from biomass, hydro, and biogas.[3]

Thailand has no nuclear power plants. Plans to produce 5 gigawatts of electricity by 2025 using nuclear technology have been scaled back to 2 GW in the aftermath of the Fukushima disaster.[3]

Energy Consumption by Fuel, 2013 (Mtoe)[2]
Oil Natural Gas Coal Nuclear Hydro Renewables Total
50.4 47.0 16.0 0 1.3 1.0 115.6

Oil

  • Production: Thailand first began producing oil[4] in 1981, when it started producing 2,000 barrels (42 US gallons) per day. By 2013, daily production had increased to 459,000 barrels. Proved oil reserves are estimated at 0.4 thousand million barrels.[2]
  • Consumption: Consumption in 2013 was 1.2 million barrels per day, a 2% increase over the previous year.[2]

Thailand's Power Development Plan, 2015-2036

According to Thailand's Power Development Plan for 2015-2036,[5][6] the country intends to build 20 additional gas-powered electrical generating stations (17,728 MWe), nine "clean coal" power stations (7,390 MWe), and 14,206 MW of renewable energy, including hydro, a large proportion of which will be imported from Laos or Myanmar. Up to two nuclear plants are also in the plans.[7]

Critics charge that power needs are overstated. Thailand plans for a reserve margin—the amount of energy available over that used at peak demand—of 15%. However, the plan identifies reserve margins as high as 39% in some years. The root cause is that Thailand regularly overestimates its economic growth, assuming it to be over 4% when it is historically around 3%.[7]

The role of imported hydro is also at issue. In 2015, hydro accounts for approximately 7% of the Thailand's power output. Under the plan, it will rise to 15-20% by 2036, and additional hydro will be imported from the Xayaburi Dam on the Mekong River and from the Hat Gyi and Mong Ton dams in Myanmar. While these sources may look clean on Thailand's balance sheets, the devastating environmental impacts to locals are simply outsourced.[7]

Many have asked why Thailand pursues a few very large coal power plants when it could be adopting safer, possibly cheaper routes, such as biomass reactors, like the 40 MWe plant operated by Double A in Prachinburi using wood and offcuts. The answer may lie in the fact that large, centralised mega-projects benefit the centralised system of project approval. With a public sector corruption rate of 25%, according to the Thai Chamber of Commerce,[8] they can be very beneficial for unscrupulous officials.[7]

History of the electricity sector

Anand Panyarachun government

The government of Anand Panyarachun began the process of energy industry liberalization. Its reforms included:

  • Allowing private companies, independent power producers (IPPs), to build and operate power generation plants, selling all of their output to the Electricity Generating Authority of Thailand (EGAT)
  • Allowing smaller private companies, SPPs or small power producers, to build and operate small power generation plants (mostly co-generation plants), selling a portion of their output to EGAT
  • Delegating to the National Energy Policy Organization (NEPO) the task of developing a master plan for the privatization of EGAT. Piyasawat Amranand, head of NEPO, designed a plan which would closely replicate the English power pool, break EGAT up into several smaller companies, and privatize the smaller companies.

Chuan Leekpai government

The subsequent government of Chuan Leekpai continued Anand's policies, with Sawit Bhodivihok taking a leading role in industry reform. The reforms were fiercely attacked by members of the EGAT, Metropolitan Energy Authority (MEA), and Provincial Electricity Authority (PEA) unions. As a result, no significant changes in industry structure or ownership occurred during the government of Chuan Leekpai's term.

Thaksin Shinawatra government

Refining and pipelines

In September 2001, the National Energy Policy Office approved the partial listing of PTT, the state-owned oil and gas company.[9]

PTT swiftly became the largest company by market capitalization upon listing in the Stock Exchange of Thailand (SET). PTT greatly profited from the global increase in worldwide oil prices following the 2003 invasion of Iraq, and the rise in its stock price helped propel the SET to a boom. However, anti-Thaksin critics have claimed that PTT's bull run was due to manipulation by Thaksin.[10]

Electricity generation and transmission

Like Chuan, Thaksin Shinawatra has repeatedly attempted to privatize the Electricity Generating Authority of Thailand (EGAT). One of the goals of the privatization was to raise 42 billion baht from an IPO and use the funds to invest in three new natural-gas powered power plants.

In early 2004, massive employee protests forced the EGAT governor to resign, thus delaying the planned privatization of the state enterprise. Governor Kraisri Karnasuta worked with employees to address their concerns about the privatization, and by December 2004, it was claimed that approximately 80% of employees supported privatization.[11] Permanent protest stages and tents at the EGAT headquarters were taken down as the state enterprise returned to normal. After the Mahachon Party (the only party that was officially against privatization of state enterprises) won only two seats in the February 2005 parliamentary elections, the process of EGAT's privatization was restarted. The agency was corporatized in June 2005, transforming it from the Electricity Generating Authority of Thailand to EGAT PLC. However, EGAT's privatization was abruptly delayed when some NGOs and some union members filed a petition with the Supreme Court a few days before the scheduled listing on the Stock Exchange of Thailand (SET).[12]

On 23 March 2006, the Supreme Administrative Court ruled against the privatization of EGAT PLC, citing conflicts of interest, public hearing irregularities, and the continued right of expropriating public land.[13][14] The court said that Olarn Chaipravat, a board member of PTT and Shin Corporation[15] (both business partners of EGAT), was on a committee involved in the legal preparation for Egat's privatisation. The court questioned the neutrality of Parinya Nutalai, chair of the public hearing panel on the EGAT listing, because he was Vice Minister of Natural Resources and the Environment.

It also ruled that insufficient opportunities were given to EGAT employees to make themselves heard: there was only one public hearing for employees, which only 1,057 attended. Lastly, EGAT PLC continued to have the right to expropriate public land to build power plants and transmission lines, a right reserved for the state. Two decrees were nullified: one ordering the dissolution of the status of EGAT as a state enterprise, and the other serving as a new charter for EGAT PLC.

Union leaders and anti-Thaksin protesters cheered the ruling, and called for the renationalization of other privatized state enterprises,[16] such as PTT Exploration and Production (PTTEP) and Thai Airways International (both privatized in 1992),[17][18] PTT PCL, TOT PCL, MCOT PCL, Thailand Post Co Ltd, and CAT Telecom PCL.[19] Like EGAT, PTT also retained land expropriation rights after it was privatized. However, this was one of the grounds for the nullification of the EGAT privatization. Caretaker Finance Minister Thanong Bidaya has noted that the delisting and renationalization of PTT could force the government to borrow massively from foreign institutions.[20]

Some criticized that the listing of PTT on the SET on the grounds that it represented a massive transfer of public assets for the benefit of few people. Though the government initially accepted over 100,000 first-time investors, there were reports that the majority of the shares for sale to retail investors had been reserved for politicians, the banks' preferred clients and journalists, leaving many retail investors, who stood in long lines to wait, returning home empty-handed. A nephew of Suriya Juengrungruangkit, the minister of Industry overseeing PTT and TRT Party secretary general, for example, was reported to have acquired 22 times the maximum number of PTT shares distributed to retail investors.[21]

Fears of this being repeated were often cited as the reason why EGAT's privatization was delayed indefinitely. Another key argument for delaying privatization was that privatization preceded the establishment of an independent energy regulatory authority. In international experience, there are no examples of successful monopoly utility privatization without regulatory oversight. Under pressure, Thaksin's government formed an interim electricity regulatory body, but some view that it currently lacks authority to force compliance, levy fines, or punish defaulters.[22] EGAT employee concerns about employment security were also common. Some expressed concern that partial ownership of Thailand's largest electricity producer by foreign shareholders would impact national security and cause conflicts of interest.

Anti-privatization petitioners (including the Confederation of Consumer Organisations, People Living with HIV/Aids, Alternative Energy Project for Sustainability, Free Trade Area Watch, and the Four Region Slum Network[23]) have been harshly criticized by both Thai and international investors, who accuse them of using corrupt tactics in delaying the listing. They also point to the public mandate of the 2005 election, during which the only anti-privatization party suffered a near complete loss. International power sector governance experts from Harvard University, University of Delaware, and the World Resources Institute lauded the successful repeal of EGAT privatization as an important step towards increased accountability and transparency in the Thai energy industry.

See also

References

  1. ^ "Energy in Thailand, Facts & Figures 2013" (PDF). Dept of Alternative Energy Development & Efficiency, Ministry of Energy. Retrieved 5 Sep 2014.
  2. ^ a b c d British Petroleum. "Statistical Review of World Energy 2014". BP. Retrieved 2014-09-11.
  3. ^ a b c "International Index of Energy Security Risk" (PDF). Institute for 21st Century Energy. Institute for 21st Century Energy. 2013. Retrieved 14 Sep 2014.
  4. ^ Includes crude oil, tight oil, oil sands, NGLs (natural gas liquids). Excludes liquid fuels from biomass and coal/NG derivatives.
  5. ^ "National Energy Policy Committee approves Thailand's power development plan (PDP 2015)". Royal Thai Government. Retrieved 27 August 2015.
  6. ^ Pichalai, Chavalit. "Thailand's Power Development Plan Thailand's Power Development Plan 2015 (PDP 2015)" (PDF). Ministry of Energy (Thailand). Retrieved 27 August 2015.
  7. ^ a b c d Draper, John; Kamnuansilpa, Peerasit (2015-08-27). "Thailand's power dilemma amid a climate of fear". The Nation. Retrieved 27 August 2015.
  8. ^ Arunmas, Pusadee (17 Jan 2014). "Corruption 'still plagues Thailand'". Bangkok Post. Retrieved 27 August 2015.
  9. ^ Alexander's Gas & Oil Connections - Thailand's energy office approves PTT's listing scheme
  10. ^ AsiaMedia :: Thailand: PM's cronies big winners, says study
  11. ^ Archived 2014-04-17 at the Wayback Machine
  12. ^ Delayed Egat listing would hit confidence
  13. ^ Court quashes Egat listing
  14. ^ Court ends privatisation of Egat
  15. ^ Archived 2006-03-25 at the Wayback Machine
  16. ^ Cartalucci, Tony (4 December 2013). "Thailand: Who are the Anti-Regime Protesters?". nsnbc International. Retrieved 9 January 2014.
  17. ^ Archived 2006-05-25 at the Wayback Machine
  18. ^ Archived 2006-05-12 at the Wayback Machine
  19. ^ Archived 2006-03-27 at the Wayback Machine Template:En icon
  20. ^ PTT braces itself for legal action
  21. ^ Thailand's Electricity Reforms: Privatization of Benefits and Socialization of Costs and Risks
  22. ^ Archived 2010-02-02 at the Wayback Machine
  23. ^ Archived 2010-02-02 at the Wayback Machine
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