Thailand to replace generating units at major coal plant

Thailand to replace generating units at major coal plant

Electricity Generating Authority of Thailand will successively replace
power-generating units at its lignite-fired plant in Mae Moh, northern
Thailand, in an investment that may top 200 billion yen ($1.9 billion).

The government-owned power company will build new units to replace four of
the 10 existing ones by the end of 2018, and two more around 2022.

The plant is generating electricity from lignite, also known as brown coal,
mined from an adjacent open-pit field for supply mainly to the northern part
of the country. The existing 10 units produce a total of 2.4 million
kilowatts of electricity, making the plant the largest coal-burning power
station in Thailand.

As the mine is forecast to run dry in the middle of the 2030s, the
replacement project will be the last large-scale investment by a plant using
domestic coal.

The oldest units, Nos. 4 through 7, each capable of generating 150,000kW,
will be replaced by the end of 2018. They began commercial operations in the
middle of the 1980s.

EGAT awarded the replacement order to a consortium of Alstom, a leading
French maker of heavy electric machinery, and major Japanese trading house
Marubeni, which has already begun construction of new units. Adopting
technology that enables highly efficient and environmentally friendly power
generation, two new units with a capacity of 300,000kW each will replace the
existing four. The order is valued at around 120 billion yen.

The 300,000kW Units 8 and 9, which began operating around 1990, will be
replaced by one unit with an output capacity of 450,000kW partly because the
production of lignite in the local mine is likely to decrease. An
"integrated gasification combined cycle," or IGCC, system is expected to be
adopted for the work, said an official at the power plant.

The possible adoption of the system may create business opportunities for
Japanese companies that have cutting-edge IGCC technology.

EGAT began operating the Mae Moh power plant in the late 1970s in compliance
with the Thai government's policy of using locally discovered lignite. The
mine is expected to keep producing until around 2035, according to the
plant. EGAT therefore decided to make the large investment in order to
continue operating the facility.

The Mae Moh plant drew public attention in the 1980s and 1990s for causing
air pollution. EGAT has since introduced desulfurization and other pollution
control devices.

Natural gas

In Thailand, natural gas, especially domestically produced gas, is mainly
used for power generation. The continuation of operations at the Mae Moh
plant is indispensable for the government's policy of reducing the country's
reliance on natural gas, which now accounts for more than 60% of electricity
generation.

In 2015, the Ministry of Energy adopted a power development plan through
2036, featuring a cut in the ratio of gas-burning power generation to less
than 40%. The plan also calls for active use of renewable energy sources
such as solar and wind power. In addition, Thailand will increase imports of
hydroelectric power from its neighbor Laos.

The ratio of coal-mining power generation in Thailand stood at 20% in 2015.
It is expected to rise to 27% in 2024, after the renewal of generating units
at the Mae Moh plant, but may fall to 23% in 2036.

According to the new power development plan, Thailand will need a supply
capacity of 70.33 million kilowatts in 2036, up nearly 90% from 37.61
million at the end of 2014.

Thailand needs to work out a proper power mix that will factor in its
expected economic growth and enable the country to play a leading role in
the Association of Southeast Asian Nations.

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Link to Original Article:
http://asia.nikkei.com/Business/Companies/Thailand-to-replace-generating-uni
ts-at-major-coal-plant

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com