Thailand plans to sign electricity accord with Laos and Malaysia

Thailand plans to sign electricity accord with Laos and Malaysia

THAILAND is preparing to sign a tripartite electricity-trading agreement
with two neighbouring countries at the upcoming Asean Ministers of Energy
Meeting.

Energy Ministry permanent secretary Areepong Bhoocha-Oom said the agreement
would pave the way for the Laos-Thailand-Malaysia electricity deal, enabling
the Asean Power Grid to materialise.

"The agreement will be for the sale and purchase of electricity between Laos
and Malaysia, using Thailand's transmission system. We will be the link for
the two neighbours," he said. "The volume of electricity involved is 100
megawatts."

The concept of an Asean Power Grid was first floated at an informal Asean
summit in late 1997. Areepong said this upcoming agreement could make the
grid a reality.

The signing of the historic agreement is set to take place at the Asean
Ministers of Energy Meeting, which will be held in Manila between September
17 and 22.

According to Areepong, Thailand has usually signed bilateral contracts in
terms of electricity deals. But this planned agreement will involve Thailand
and two other nations.

"Laos will generate and sell electricity to Malaysia under the agreement.
Laos will get paid for electricity while Thailand will get paid for its
transmission," he said.

He added that in the future, Malaysia might consider selling to Singapore
some of the electricity it acquired from Laos.

He said he hoped that this power-grid integration by Thailand, Malaysia and
Laos would encourage other Asean nations to head in the same direction.

He said there was a possibility of Thailand becoming an
electricity-transmission hub, because China has invested in many
hydroelectric dams in Laos and Cambodia and has approached Thailand about
transmission services.

"This presents good opportunities for us. Electricity from Laos and Cambodia
can be sold to other nations via our transmission system, if we can connect
transmission lines with Cambodia too. As of now, we have already connected
the lines with Laos," Areepong said.

He said Thailand and Cambodia had planned a collaborative project on
electric and water development. Known as the Stung Nam hydropower project,
it is the first concrete move since the two countries signed a memorandum of
understanding on the deal.

The Electricity Generating Authority of Thailand will invest in this
project, because it will buy power produced via Egat International.

"We believe we can work together in many more projects in the future. We are
now negotiating on building a coal-fired power plant in Koh Kong," a
province in southwestern Cambodia, Areepong said.

He is also optimistic about negotiations with Myanmar on a plan to develop
the Man Tong Dam. "This dam project will benefit both sides. We both need
electricity. So we expect the negotiations to conclude well before the end
of this year," he said.

Thailand plans to invest in three power plants in Myanmar. Of these plans,
the one related to the Man Tong Dam has the brightest prospects. If the
ongoing feasibility review rules in favour of the dam, the hydropower plant
in the Upper Salween River will take off with production capacity of
7,000MW. It is expected to be able to generate electricity for distribution
by either 2028 or 2029.

Areepong disclosed that Thailand had conducted a study on connecting
transmission lines to Myanmar's Dawei Industrial Estate.

"The Energy Ministry has raised this point with Myanmar. If it wants
electricity from Laos, we can facilitate the transmission via Kanchanaburi
province," he said.

Areepong said that although Thailand would likely be unable to construct
more hydroelectric dams of its own, it had a good chance of buying
hydroelectricity from neighbouring nations.

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com