Thailand: ERC mulls backup levies on plants

Thailand: ERC mulls backup levies on plants

The Energy Regulatory Commission (ERC) is mulling a plan to collect a backup
rate from private small power plants and independent power suppliers, who
are mostly fossil-based, as their power-generating capacity is
unsustainable, which leaves the burden of producing backup power with state
utilities.

ERC commissioner Viraphol Jirapraditkul said that while the ERC is allowed
by law to issue such levy collections immediately, the ERC is still
conducting a feasibility study and public hearings to see if people want the
backup rate.

The move is an attempt to help offset the burden on the Electricity
Generating Authority of Thailand (Egat) to generate backup power.

Recently, Egat proposed that the backup rate be collected from renewable
power producers, as renewable power has limited capacity, which creates a
burden on Egat to store backup power to serve demand.

As the proportion of renewable power generation increases, Egat needs to
provide more backup power. However, the proposal was strongly opposed by
private power-generating firms, who said the levy is not fair for them.

Mr Viraphol said Egat needs to generate backup power even for gas-fired and
coal-fired power plants, as most of them are located in industrial estates
that need sustainable power to secure production.

Many of the plants produce unsustainable power and need backup, while some
of them have developed redundant power transmission lines for their own
business, making Egat's investment in those transmission lines redundant.

The redundant transmission lines and unstable power resulted in around 2,000
megawatts of power losses in transmission lines -- backup power Egat needed
to generate.

Mr Viraphol said the feasibility study also paved the way for the country's
policymakers to form regulations in anticipation of the rise in solar
rooftops, which more and more households are expected to have.

"The feasibility study is expected to be completed by the second half of
this year and we expect to start collecting the backup charges by the end of
this year," he said.

Since private firms have been allowed to develop power plants, particularly
in the renewable sector since in 2007, renewable power capacity has jumped
to 7,000MW, while another 2,200MW from several projects are under
construction and are expected to start commercial operations soon.

Wichsinee Wibulpolprasert, a researcher at the Thailand Development Research
Institute, has warned that the ERC should be ready to collect backup charges
for the new power capacity, which is mostly solar power.

With improved technology trimming down the costs of solar panels, she said
the number of solar rooftops is expected to rise substantially over the next
few years and could become a mainstream power resource, mostly in Bangkok.

Suvit Toraninpanich, a deputy secretary-general of the Federation of Thai
Industries, said he expects energy policymakers to deregulate solar rooftops
in the near future as they become more popular and cost less.

He said many factories in industrial estates have already installed solar
rooftops, which are expected to expand into the residential sector very
soon.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1285435/erc-mulls-backup-levies-on-
plants

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com