Power play draws flak from experts

Power play draws flak from experts

Two energy insiders tell 'Spectrum' that the ominous predictions of possible blackouts over Songkran were overblown but sounded their own warnings on what might happen if the country doesn't get its act together

The public was thrown into a panic in February when Energy Minister Pongsak Rattapongpaisal said a power crisis was likely over the Songkran holidays. He attributed this to feeder lines from Myanmar's Yetagun, Yadana, and M9 natural gas fields in the Andaman Sea being closed for maintenance.

BRIGHT LIGHTS, BIG CITY: Many buildings in Bangkok are lit up all night, using a staggering amount of energy.

Mr Pongsak used the occasion to push for ''clean'' coal power plants, and several energy conservation campaigns were introduced. Last week, he told the Senate Energy Committee that the country would narrowly escape crisis with only a few thousand megawatts to spare thanks to cooperation from the public and the industrial sector in saving energy.

However, according to experts contacted by Spectrum, the crisis may have been manufactured from the start as such temporary cuts in natural gas are common and the country currently has a surplus energy-generating capacity. However, they also warned that if the current energy management regime persists a real crisis will strike in the not too distant future.

Witoon Permpongsacharoen, director of the nonprofit Mekong Energy and Ecological Network (Meenet), said he couldn't understand why a temporary stop in natural gas deliveries from Myanmar was made to sound so ominous. As a former member of the National Social and Economic Council, which monitors the country's power production, Mr Witoon has made frequent recommendations on power reform to the government. Before forming Meenet he joined in several demonstrations against the construction of hydropower plants in the country.

After the initial announcement from the energy minister, Mr Witoon went through data provided by the Electricity Generating Authority of Thailand (Egat) and other government agencies. He says the information he found indicates the possibility of a crisis was overblown.

Mr Witoon said that according to Egat's own slides, shown publicly to accompany the unveiling of the Power Development Plan 2010, at least six power plants take natural gas from Myanmar stations that were shut down, which supply a total of 1.2 billion cubic feet of gas per day (see illustration, page 5). However, only one power plant, South Phra Nakhon with a capacity of 670MW, relies solely on natural gas supplied by Myanmar. Two power plants _ North Phra Nakhon and Wang Noi to the north of Bangkok _ use a mixture of energy sources including natural gas from the Gulf of Thailand.

The other three power plants in Ratchaburi province have an agreement with Egat to keep fuel reserves on hand to avoid a power shortage. Therefore, in the worst-case scenario only 670MW of power might be missing from the grid.

Furthermore, said Mr Witoon, the country currently has a power generation capacity of about 33,000MW from all energy sources, and in theory there should be a power reserve of around 15% even during peak periods, usually in April when usage can run as high as 26,000MW.

This means the reserve capacity is about 7,000MW, or almost 25% of the peak load. This should be plenty to cover possible power loss from a temporary shortage of Myanmar natural gas, said Mr Witoon. He believes that the current power reserve is even greater than what is estimated.

THE EASY WAY DOWN: Escalators at shopping malls have been targets of calls for energy conservation.

Mr Witoon said the situation playing out over this Songkran holiday is nothing new. Based on government records, in 2006 the Yetagun field managed to deliver only 50% of the contracted gas to Thailand in the first month of the year, and it shut down completely at the end of 2006. A year later, the Yetagun field again stopped delivery, in December. Gas leaks caused stoppages in 2008, and deliveries from the Yetagun pipeline were also stopped for maintenance last April.

Mr Witoon said the Myanmar natural gas stations have a contract with Egat stipulating that even while under maintenance they will deliver at least 50% of the expected amount. If they fail to deliver that amount, the Petroleum Authority of Thailand (PTT), which also supplies to Egat, makes up the difference. PTT is later able to buy back this same amount of gas at 25% of the price it received for it, and this may then be sold to Egat at full price.

Mr Witoon challenged Egat to explain whether or not the Myanmar gas stations are able to deliver 50% of the expected amount, and if not, if PTT is now profiting on the situation. He also asked if consumers would be expected to make up any Egat losses derived from scaled back gas deliveries by way of fuel adjustment tariff fees on their electricity bills. Such charges are calculated on unpredictable factors such as inflation and money exchange rates as well as possible supply shortages. Mr Witoon said it would not be fair to expect the public to make up any losses incurred, adding that there should be clear explanations as to how such fees are calculated.

Associated professor Nobhorn Leerechanon, head of the Power System Planning and Energy Policy Research Unit of Thammasat University and adviser to the Senate Energy Committee, also told Spectrum he doesn't believe there ever was much possibility of a real crisis. But he added that the government took an unnecessary risk which could have been avoided with better management.

Mr Nobhorn said the maintenance schedule of the gas stations should be adjusted so that shutdowns could come at a less crucial time than the Songkran holidays. He said the winter months would be more appropriate as power usage is consistently lower when temperatures are lower.

The government should develop a better maintenance schedule with cooperation from Myanmar, said Mr Nobhorn. He said a new approach to power management policies is needed, and that new power generation sources must be found. He also said the government should pay more attention to the power demand side instead of focussing only on supply. This can be made possible with fiscal motivators, including higher rate charges to consumers who waste energy and tax deductions for consumers who conserve energy.

He said new property developments are an ideal place to start implementing conservation and clean energy practices. For example, developments that incorporate solar power should be given incentives, and any surplus power they generate can be sold into the system. With promotion and encouragement, the entire power generation landscape of the country could be shifted from mega power projects to small but manageable ''prosumers'' which have the capacity to generate power while consuming it. This would mean reforming the energy grid system to allow such inputs from small-scale producers and also to make it more efficient. He advocated a system under which consumers can check their use of power in real time via technology, including mobile phones.

''These are all things that we can do, but we have not yet started to do them systematically,'' said Mr Nobhorn. He added that Malaysia has made much more progress in implementing progressive energy measures as the government there has demonstrated a strong will to pursue them.

''Often our power management policies [in Thailand] are made out of political considerations,'' he said.

He explained that energy management policies are decided by the National Energy Committee chaired by the prime minister and the country's Power Development Plan is prepared by the Energy Ministry. However, said Mr Nobhorn, considering the information fed into the plan and its final form, the influence of Egat is obvious. Mr Nobhorn said it is necessary for power generation in the country to be privatised to encourage more competition. He also recommended that energy policy be addressed in parliament as it is crucial to the country's development and progress.

Egat, said the professor, is a monopoly as it is the sole body which generates and sells power in the country and sharing in power generation would mean the loss of profits.

He added that power transmission should also fall under a national regulating body to facilitate the flow. Unfortunately, while the Power Development Plan often talks about finding new energy sources, it barely addresses transmission issues which are also a crucial part of the country's power generation costs.

''Simply put, we do not yet have a structure in place where transparency and accountability make effective power management possible,'' said Mr Nobhorn. ''We must restructure, if not reform, the system,'' he said.

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