Thailand: The politics of power plants

Thailand: The politics of power plants

The decision by Thailand's military government last month to put on hold a
controversial coal-fired power plant in the southern region renewed my
concerns about the trustworthiness of government policy.

Certainly, the Krabi power plant is far from the first energy project to be
delayed because of public protests. But the announcement came just days
after the National Energy Policy Committee (NEPC), chaired by Prime Minister
Prayut Chan-o-cha, gave the green light for the project to go ahead.

The 800-megawatt power plant in the southern province best known for
pristine beaches on the Andaman Sea had been shelved for more than two years
already because of strong opposition from local residents and activists who
fear possible environmental damage. The national Power Development Plan for
2015-36 says the plant is needed to address electricity shortages in the
South.

Gen Prayut said on Feb 17 after the NEPC meeting that the Krabi plant was
"beneficial for the people", adding that it needed to be built despite the
opposition. Energy Minister Anantaporn Kanjanarat raised the spectre of
brownouts and blackouts if no plant was built.

But the following Monday, Gen Prayut stressed the need to restart the
environmental health impact assessment (EHIA) and environmental impact
assessment (EIA) for the project from the beginning, as the protesters had
demanded. The original assessments were conducted quietly and mainly for the
benefit of officials, with minimal involvement from the community at large.

New studies will take two and a half years and the start of operations would
be pushed back to 2024 from the original schedule of 2019.

In my view, the PM's order to scrap the original studies and demand a more
inclusive approach raises questions about the transparency of the original
process and of the agencies charged with preparing such reports. How much do
we know about whether the project is safe, as well as worthwhile for local
companies and the country as a whole?

Of course I agree that Krabi needs to be kept as clean as possible for the
sake of tourism which is an important part of the economy. However, the most
suitable location for a power plant in the South should have been decided at
the very start, and not now when the EHIA and EIA reports have already been
made.

The facts certainly support the need for a new power plant in a region where
electricity demand has grown by an average of 4.2% a year over the past
decade, compared with 2-3% in the central region. As well, Thailand needs to
diversify away from heavy reliance on natural gas to generate electricity.
Coal is currently cheap and new technologies allow it to be burned more
cleanly, though environmentalists remain unconvinced.

Take a look at Thailand's neighbouring countries. Vietnam produces around
20% of its electricity from burning coal. It too was looking to diversify
and was looking at nuclear power. But last November it abandoned plans to
build two multi-billion-dollar nuclear plants, citing lower demand
forecasts, rising costs and safety concerns.

When the Vietnamese government approved plans for the two plants in 2009,
annual power demand growth was projected at 17-20%. But the figures have
since been revised downward to 11% from 2016-20, and 7-8% through 2030.
Meanwhile, the estimated investment cost of the plants has doubled since
2009 to nearly US$18 billion.

Hanoi's decision is a further setback for the nuclear industry as countries
from Germany to Indonesia either pull out of nuclear energy or cancel
development plans in the wake of the Fukushima disaster in Japan in 2011.

But I certainly understand Vietnam's decision in light of lower demand
forecasts and soaring costs. Safety concerns, meanwhile, have also
influenced the decision because the damage would be enormous if something
occurs, including human error.

In the Philippines, which needs an additional 7,000 megawatts of capacity
over the next five years to support its fast-growing economy, 34% of the
electricity is currently generated by coal, with an equal share coming from
oil and gas, and 32% from renewables. With a population of 100 million, the
Philippines aims to double generation capacity by 2030 to avoid a return of
frequent blackouts suffered during the 1990s.

Here in Thailand, additional power capacity is required for the southern
region to avoid supply shortages after 2019. More importantly, uncertainty
about government policies needs to be avoided given that energy projects are
capital-intensive and need a long-term commitment, while energy security is
critical for sustaining the country's economic growth.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1209701/the-politics-of-power-plant
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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com