Published on 23/04/2014
Unreliable power worries investors Reliance on natural gas hitting supplies
Thailand has drawn complaints from investors about rising electricity costs and poor reliability after too much reliance on natural gas for power generation began causing more frequent blackouts and brownouts in recent years, says the Federation of Thai Industries (FTI). Vice-chairman Chen Namchaisiri yesterday said a lack of energy security has reduced Thailand's competitiveness. Thailand depends on gas for as much as 70% of power generation, up from 60% a decade ago, causing a heavy impact when gas supplies from Myanmar, the Gulf of Thailand and the Malaysia-Thailand Joint Development Area (JDA) were disrupted. Myanmar's gas supply was disrupted for a week in April and December last year, while supply from the Gulf of Thailand was disrupted over Songkran. "Businesses have always been asked to shift working hours to avoid blackouts and brownouts in the last two years. This is something we can expect again next year," Mr Chen said, repeating calls to switch from gas to coal and nuclear. Gas from the Gulf of Thailand is expected to deplete within eight years and Thailand will then have to depend on costly liquefied natural gas, he said. If Thailand continues to rely heavily on gas, the FTI forecasts the electricity tariff will rise by 50% within eight years from an average of 3.75 baht a kilowatt-hour now. "Thailand’s attractiveness for investments will be lessened if the electricity tariff surpasses 5 baht per kWh, particularly in sectors that consume a lot of power for production such as steel, glass, ceramics, food processing, textiles and building materials," Mr Chen said. New technology for coal-fired power generation is cleaner than in the past and nuclear-fired generation is much more safe, so the new government should work
hard to provide correct information on these issues to create better understanding among the public, he added. The FTI and the Energy Regulatory Commission (ERC) are working together to push the new government to come up with aggressive policies on energy diversification. A joint committee will be named soon with the aim of bringing gas dependence in power generation below 50%. Numchai Lorwattanatrakul, governor of the Provincial Electricity Authority (PEA), said a disruption to gas supplies from the JDA’s Block A18 in June will cut the supply by 10% of total demand, affecting the operation of the Chana power plant in Songkhla province. The PEA has requested businesses in 19 sectors, particularly in the South, to turn off machinery during the JDA gas disruption to avoid blackouts or brownouts, with a target to cut demand by about 50 MW during peak hours. Small power producers will be asked to generate more power than the amount agreed under their contracts.