Thailand: Krabi coal plant up in the air

Thailand: Krabi coal plant up in the air

The government's plan to build a coal-fired power plant in the coastal
province of Krabi has once again been put on hold after Prime Minister
Prayut Chan-o-cha scrapped the previous environmental health impact
assessment (EHIA) and ordered the Electricity Generating Authority of
Thailand (Egat) to conduct a new one with greater input from nearby
communities.

According to Egat, it will take 18 months to two years to conduct a new
EHIA, leaving the plan to secure power in Thailand's southern region in
limbo.

However, it is unclear whether the project will be delayed for two years or
indefinitely since opponents of the plant have sworn to continue fighting
even if the new EHIA is approved.

That has raised concerns among investors about possible power shortages,
which would deter new investment in the region. It also leaves policymakers
fewer options in helping secure energy for the South, where power demand has
been rising by 5% a year.

The most likely choice for Thailand is buying more power from Malaysia, or
switching back to relying on gas-fired power plants. Both the options have
been recognised as costly, as they would make Thailand more reliant on
uncontrollable, external factors.

Energy Minister Anantaporn Kanjanarat said the National Council for Peace
and Order is open to suggestions from locals on how to deal with the
region's rising power demand if they did not want the 800-megawatt
coal-fired power plant to be developed in Krabi.

"If the answer is to buy more power from Malaysia via a long-term contract,
it would be clear to us (the government) that people in the region want us
to rely more on a neighbouring country without building a new power plant to
serve rising demand," said Gen Anantaporn.

But he said the arrangement to buy more power must comply with the national
Power Development Plan (2015-36), which limits the proportion of power
bought from neighbouring states to 10-15% of total power consumption in 2026
and 15-20% in 2036. Currently, Thailand buys 6.4% from its neighbours,
mostly from a hydropower plant in Laos.

Purchasing more power from Malaysia on a long-term basis would also require
the neighbouring country to build additional facilities to meet Thailand's
energy needs.

He said the government would finalise the plan on how to secure power by the
end of the year.

Egat deputy governor and spokesman Saharat Boonpotipukdee said a long-term
power purchasing plan should be the last resort to provide more energy
during times of possible power shortages.

"It's not easy to have a long-term contract like the one used to purchase
power from Laos due to Malaysia's regulations," he said.

Thailand has had a contract to purchase power from Malaysia since the 1990s
under the Indonesia-Malaysia-Thailand Growth Triangle Project Development.
That agreement has helped Thailand periodically secure power, particularly
during times of supply disruptions from the gas blocks in Myanmar during
maintenance shutdown periods.

Under that contract, Egat can secure an additional 300MW from Malaysia's
national power utility, Tenaga Nasional Berhad, if needed.

But Thailand does not have a long-term agreement in place that would allow
it to consistently bring in power from Malaysia as it does from Laos.

If the Krabi plant plan is scrapped, Mr Saharat said another way to deal
with possible power shortages would be to upgrade the high-voltage
transmission lines (HVTLs) to 500 kilovolts to help transmit power from the
central region of Thailand to the South. That plan is forecast to help
transmit up to 650MW of power.

He said the HVTL extension from Prachuap Khiri Khan to Phuket is now under
way and is expected to go live in 2020. Another extension line from Phuket
down to Hat Yai, Songkhla, is due to begin construction next year and will
start operations in 2024.

This extension line could further boost capacity by an additional 1,000MW.

But additional power lines are unlikely to solve the power shortage problems
completely, since some power is lost during the transmission process.

According to Egat's report, dependable power-generation capacity in the
South stands at 3,089MW. Peak power demand last year reached 2,713MW on June
28, with demand set to continue rising.

Meanwhile, the Thai government is strongly promoting new industrial
investment in the Eastern Economic Corridor (EEC), which is expected to
attract massive investment in the region. That would mean some power from
the central and eastern regions would be necessary for the development of
the EEC, and not be transmitted down South.

The last plan to help secure power in the South entails switching to a
gas-fired power plant.

Governor Kornsit Pakchotanon said Egat is mulling over four possible
locations to develop a new floating storage regasification unit in the
region to facilitate gas import to feed existing gas-fired power plants,
making Thailand's power-generating system more reliant on gas.

But that could put Thailand's energy security at further risk, since the
country is trying to switch to other power sources, including coal and
renewable sources, to cut its reliance on gas down from 70%.

That switch is being anticipated as Thailand's own natural gas reserves in
the Gulf of Thailand are depleting quickly, forcing the country to import
more liquefied natural gas, whose price is volatile as its moves in line
with global oil prices.

As it stands, the existing gas-fired power plants cannot serve rising power
demand in the South, prompting Egat to consider building a new plant.

Mr Saharat said Egat is conducting a feasibility study to that effect. The
plan would include a project to extend a gas pipeline from the offshore
Malaysia-Thailand Joint Development Area to transport gas to the new power
plant in Thailand.

He said building a pipeline to that end would be more practical than
building a floating unit, which would require more than five years to
develop.

But how the government will ultimately proceed remains unclear.

Meanwhile, Prasitchai Nunual, a coordinator for the network Save Andaman
from Coal, said that whether or not a new EHIA for a coal-powered facility
is given the green light, the group will not waver in its opposition.

"There is no technology or study in the world, even in developed countries
or otherwise meeting international standards, that can curb or control the
risks from coal-fire power plants," he said. "So, if the new EHIA, is
approved, it will have been faked and we will protest against it."

The group, which says it represent hundreds of thousand of villagers in
Krabi and nearby provinces, reiterated it would fight indefinitely to
prevent the development of the plant in order to protect people's health,
marine life, the environment and the tourism industry, which accounts for
around 17% of Thailand's GDP.

Mr Prasitchai has proposed developing a renewable power plant in the region
including biomass, solar farms and wind farms to meet rising demand.

But limited power resources, particularly wood chips, agricultural waste and
a lack of power storage technology to generate energy consistently have thus
far made renewable power impractical.

But as the clock ticks down, the lack of a clear plan to deal with rising
power demand in the South could trammel the regions economic development, as
investors could be deterred from investing in an area lacking in power
security.

Thanarak Phongphatra, vice-chairman of the FTI, said if the coal-fired power
plant is delayed indefinitely or scrapped, it will make investors relocate
their production bases to the upper southern region or another part of
Thailand.

He said a power shortage would lead to a drop of at least 1% of the gross
regional product, which is 1.13 trillion baht.

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Link to Original Article:
http://www.bangkokpost.com/news/security/1237518/krabi-coal-plant-up-in-the-
air

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com