Energy workshop for groups working on Burma: Thai and Burmese energy sector

1. Energy workshop for groups working on Burma: Thai and Burmese energy sector

2. topics • Burmese energy sector (compiled by MEE NET) • Structure of Thai power sector • Centralized structure and its problems • Governance issues • Consumption patterns • PDP, load forecast, over-investment • Decentralized generation • Renewable energy (target, VSPP regulations)

3. Burma Power Sector Infographic about Burma’s Power sector Links Decision Making Structure Actors Generation mix

4. Decision Making Structure The electricity system is centralized and under the control and management of the government and state enterprises. Ministry of Electricity Power 2 Gas-fired Thermal power plant Transmission & Distribution System Link to See Structure Ministry of Electricity Power 1 Hydropower & Coal Fired power plants Link to See Structure Dpt. Of Electric Power Dpt. of Hydropower Planning Dpt. of Hydropower Implementation Hydropower Generation Enterprise Myanmar Electricity Power Enterprise Generation,Transmission & Distribution System Electric Supply Enterprise Yangon City Electricity Supply Board (YESB) Ministry of Electricity Power established in 1997 and in 2006 was restructured and separated into 2 ministries: Ministry of Electricity power 1(MOEP-1) takes responsibilities for: - Planning and Development of new hydropower plants and also operation and maintenance of hydropower stations and coal fired power plants. - Selling electricity to Ministry of Electricity power 2

5. Decision Making Structure (Con’t) • Ministry of Electricity power 2 (MOEP-2) in charge of transmission and distribution of electricity generated by Ministry of Electricity power 1 • Myanmar Electric Power Enterprise (MEPE) is a State own enterprise established in 1997. It is an implementing agency responsible for power generation, transmission and distribution throughout the country. • - Thermal power plants: Operation and maintenance of Gas Turbine Power Stations and Combined Cycle Power Plants • - Construction of Transmission, Distribution and substation Yangon City Electricity Supply Board (YESB) was formed in 2005 and is tasked with approving businesses to supply electricity in areas that cannot be fully supplied. Other ministries and authorities involved with the energy is as follows: • Ministry of Energy and Myanmar Oil and Gas Enterprise (MOGE) in charge of Oil and Gas management • Ministry of Mines in charge of Coal business • Ministry of Forestry is responsible for Biomass and Fuel Wood • Ministry of Science and Technology is responsible for Renewable Energy

6. Actors in the Power Sector MOPE-1 Hydropower, Coal MEPE Gas Turbine, CCPP IPPs Small privates Generation Transmission MEPE & MOEP-2 Small Privates MEPE Distribution Export to India, China Domestic Customer Transmission system is under the control of the MEPE and MOEP-2. They will finance, construct and operate the transmission system. MEPE distributes electricity through the national grid to 5 states and 6 divisions. IPPs cannot own transmission lines. However, about private participation, private sector has been allowed to cooperate with MOEP-1, MOEP-2 and MEPE in generation, distribution, sale and service. IPPs can jointly invest with the ministries. Small generator enterprises can supply power to consumers.

8. Generation Mix Hydropower is the main fuel source in the country. In 2008, electricity generated from hydroelectricity was 60.83% of total generation. Gas and steam power are the second ranked fuel used. Currently, there are the following power projects: -14 Hydropower stations -10 gas turbine and thermal power plants -1 Coal fired power station

9. Source : Myanmar Ministry of Electricity World Bank, World Development Indicators From the figures, it is clear that there is a gap between installed capacity and highest demand for electricity. This can be due to a number of factors including the low efficiency of power plants in generating power. Another possible reason is that power generated is also exported to neighboring countries (peak demand in the graph is only an indicator for domestic demand).

11. Trans-Burma dual pipelines construction begin soon

12. Dynamics of Electricity Sector After Burma attained independence in 1948, the government established the Electricity Supply Board in 1951 and thus began the government’s monopoly on utilities (before that, some local business were able to generate electricity). In 1972, Electricity Supply Board was reorganized to become the ‘Electricity Power Corporation (EPC). The Ministry of Energy was also formed in 1985 as was responsible for the oil and gas sectors as well as for electricity generation and distribution. Ultimately, on the 15th of November 1997, under the State Law and Order Restoration Council, the Ministry of Electricity Power was established. The Myanmar Electric Power Enterprise(MEPE) was also formed at this time. MEPE continues to serve as the State utility company while the the Ministry restructured into to two ministries, the Ministry of Electricity Power (1) and (2). See Burma Power Sector Steps towards Privatization In late November 2005, to meet increasing demands from new satellite towns and industrial zones, the government started to allow private agencies to supply electricity.Under the Yangon City Electricity Supply Board Law, small businesses in Yangon can generate and sell power to consumers. However, once implemented the government encountered protests from consumers who faced high costs from small generators fueled by an expensive commodity, oil. In addition, generators and other suppliers also faced higher costs once they had to conform to standards set by the government. Though the government has allowed for private investments, the main generation plants and the entire transmission system are still under the control of Burma’s government.

13. Burma Power Policy Burma’s economic development strategies, especially in its energy sector are driven by centralized government decision-making. The Burmese domestic energy market is influenced both by regional and international investment flows from major regional states looking for energy resources. Burma’s natural resource rich country including an abundance of gas and oil reserves and high hydropower potential are being exploited. Investors from the region including Thailand, China, South Asian Countries, South Korean, and the GMS countries are all involved in extractive industries within the country. In addition to reaping high profits from these trade opportunities, the government is also using the investment ventures as useful tools in its battle with minority ethnic groups who currently occupy large swathes of resource rich lands. In the name of development, the government has been expelling the groups from construction sites and economic development zones. Though the Burmese government claims that energy sector development is vital for meeting the population’s basic needs and overall development strategy, Burma’s electrification rate is very low, even after years of resource exploitation. In 2008, 42.8 Million of Burma’s 58.82 million population lived without electricity. Or, according to UN statistics, only 5% of all Burmese citizens have access to electricity even though the government’s stated goal is to increase electrification rates to 60% by 2020. During 2010-2020, Burma’s energy sector plans to continue oil and gas pipeline construction, oil and gas extraction plans, hydroelectric power development, and transmission line construction both for domestic use and for regional interconnection plans. Links Power Planning Subpage Dynamics of Electricity Sector Subpage

14. Burma Power Planning • In order to achieve its economic and social development plans of 12% annual GDP Growth, Burma’s Fourth Short-Term Five-Year Plan (2006/2007-2010/2011) was formulated to meet this stated target. One of power-related objectives in the five year plan is ‘To develop electric power and energy sector to be in conformity with developing trend industries’. In addition, specific Long-term Policy for the Energy Sector is as follows: • Sustainable use of natural resources to support the economic growth in a sustainable manner; • Efficient utilization of available energy resources; • Smooth and reliable energy supplies for building a modem agro industrial based nation; • A well balanced use of energy resources by the creation of an equal distribution of the share of various primary energy sources for conservation; • Promoting the development and utilization of all available renewable energy resources; • Creating an attractive base for further investment in energy and energy related ventures. Regional policy and cooperation in infrastructure development in order to support investment and trade in the region results in the Government’s plans for near term cross-country cooperation activities as follows: • Linked infrastructure including hydropower power plants, power lines, pipelines and supporting road networks • Shared infrastructure including road s, channels for navigations, bridges and etc. • Shared link or independent infrastructure for import and export of oil, gas petrochemicals and other related products Myanmar Electric Power Enterprise (MEPE), a state-owned enterprise, has been distributing electricity generated by major hydropower and gas turbine stations. The national grid supplies 94 % of the nation’s power needs while another 6% comes from off-grid isolated energy sources. MEPE’s objectives for the country’s development is as follows: • Developing Hydropower for base load and gas turbine for peak load • In order to optimize the use of natural gas by gas turbine, combined cycle power plants are implemented • To expand the national grid • To revive the study of alternative production of electricity by using waste products including rice husks, etc. Using electricity by firing boilers to generate electricity meeting local requirements instead of utilizing the main grid’s power is encouraged • To reduce loss of electricity incurred from transmission and distribution • In remote areas where electricity from hydropower through the national grid cannot be utilized, the generation and distribution of electricity will be performed by diesel generating sets, wind and solar facilitates

15. Burma Power Planning (Con’t) Power Development Plans and Transmission Interconnection Projects According to its power demand forecast, in 2030, Burma will have a peak demand of 7,334.82 MW (peak demand in 2008 was 1,061.2 MW). During 2010-2020, several projects will be Developed. At present, 19 hydroelectric power projects are under construction. Furthermore, 18 cross border hydropower power projects are currently being planned through investments by companies and/or state owned enterprises from China, Thailand and India. If these projects are completed, their total installed capacity will rise to 19,413 MW. Meanwhile, in 2009 Burma current installed capacity is only 2,255.9 MW. Transmission system To facilitate power transmission, during 2010-2020, the government plans to construct 62 transmission lines throughout Burma in the near future (at present, 129 transmission lines are in operation )

16. Thailand Power Sector Infographic about Thailand’s Power sector Links Decision Making Structure Actors Generation mix

17. Decision Making Structure Thailand has Centralized Electricity Structure. Policy determination and planning including system operation are in hands of the government and the state owned enterprise; the Ministry of Energy and the Electricity Generation Authority of Thailand (EGAT). • EPPO and EGAT are responsible for electricity supply planning. • DEDE is mainly responsible for alternative energy development • ERC was established in 2009, as an independent authority, to regulate and ensure efficiency and transparency of electricity management, review final draft PDP, license to power producers Cabinet National Energy Policy Committee (NEPC) Energy Regulatory Commission (ERC) Ministry of Energy EGAT Energy Policy and Planning Office (EPPO) PTT Public Co., Ltd.(State Enterprise) Dpt. of Alternative Energy Development and Efficiency (DEDE) Bangchak Petroleum Pub Co., Ltd. (State Enterprise) Dpt. of Energy Business Energy Fund Administration Institute(EFAI)(PublicOrganization) Dpt. of Mineral Fuels

18. Actors in Power Sector SPPs IPPs Generation EGAT Power Plants R E G U L A T O R Power Purchaser, System Operation, and Transmission Power Purchase System Operation Transmission Bulk Power Supply EGAT Energy Regulatory Commission (ERC) Distribution/ Retail Supply PEA MEA VSPP End Users End Users Direct Customers Under Thailand ‘Enhanced Single Buyer Structure’, all producers have to sell electricity to EGAT that holds a monopoly over the transmission system. EGAT then sells power to MEA and PEA for distribution to consumers. Only a small amount of consumers directly purchase electricity rom EGAT/ IPPs/ SPPs, most of them are industries. In addition, ERC serves as a regulator in the system.

19. Generation Mix Thailand uses natural gas as its major fuel to generate electricity, 72.5% in 2009. Lignite and coal are used 11% and 8.4% respectively. Installed generating capacity from April until August in 2010 reached 30,160.01 MW. In 2009, the installed capacity was 29,212.01 MW.Share of Power Generation by Fuel Type January to October 2010The accumulated power generation from January to October is 134,978.22 GWh. At the end of 2008, the generation reached 148,231.16. Meanwhile, in 2009, the total generation was 145,214.62 GWh which represents a decrease between 2008 and 2009 of 2.04%. Peak Demand of 2010 happened in May, at 24,009.9 MW whereas in 2008 and 2009 peak demands were 22,045 MW and 22,568.9 MW respectively.

20. OverviewThailand’s power policy is driven by two key factors: continued economic growth driven by the industrial sector and energy sector financiers as well as ambitious plans to be the energy leader in the region. Thailand’s stated goal of being the “Hub of the ASEAN Grid” is at the core of its energy investments. Thailand’s centralized power planning structure emphasizes increasing energy supplies to meet expected demands. These needs can only be met through continued investments in large scale power projects both domestically as well as in neighboring countries. Power planning also includes expectations that the regional transmission network will be realized allowing for both exports and imports of electricity with neighboring countries. International concern about climate change is also playing a role in Thailand’s power development plans. By pledging to reduce greenhouse gas emissions in the energy sector by 30% by 2020, Thailand is planning on increased investments in nuclear power projects, hydropower projects and the promotion of Clean Development Mechanism projects. Meanwhile, renewable energy development, Energy Efficiency and Demand-side management (DSM) are not adequately being promoted by the government.Links Power PlanningHistory of Electricity Reform Thailand Power Policy

21. Power Planning Sub page The centralized government planning process and the National Economic and Social Development Plan in addition to regional development and power development plans are crucial in Thailand’s power sector planning. The National Economic and Social Development Plan such as Southern and Eastern Seaboard Development Projects, which are focused on heavy industries utilize large amounts of energy consumption and require infrastructure development that includes huge power plants. been Moreover, current ‘Framework of Thailand’s Power Strategies’ have also been devised by the government, Ministry of Energy and state-owned enterprise Electricity Generating Authority of Thailand (EGAT) to include the following: • Maintaining energy stability and security: supplying sufficient energy to meet demand, promoting public participation especially in national power planning process, preparing readiness for gas supplied emergency • Regulating energy businesses • Strengthening energy utilities and authorities • Promoting generation and supply of alternative energy • Reducing energy use and lower greenhouse gas emission Power Development Plan (PDP) Thus far, Thailand electricity sector propelled by PDP 2010 (2010-2030) ลิ้งค์ไปที่ PDP 2010, the latest 20 year PDP approved in early 2010. It has been formulated according to the Ministry of Energy’s framework with specific investment and projects as illustrated In the figure on Installed Capacity classified by Fuel Type for 2010-2030. Combined-cycle gas power plants are main source, followed by power purchase from Laos and coal fired power plants. Importantly, the Ministry of Energy is adamant to construct nuclear power plants Even while opposition exists from local people living around the proposed sites. Renewable energy will be account for 7-8% of the generation during the ext 20 years. throughout 20 years. According to the plan, Thailand’s installed capacity will reach 65,547 MW whereas present installed capacity is 30,160.01 MW PDP 2010 : GDP (Base Case) Diesel Renewable Energy Heavy Fuel Oil Import Natural Gas Imported Coal Lignite Nuclear Hydro 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

22. Power Planning Sub page (Con’t) Arguments made during PDP 2010: • Thailand’s civil society criticized the 2010 PDP approval process due to lack of transparency and genuine public participation. The national plan was approved by National Energy Policy Council during the chaotic political situation that occurred in April in Thailand. • It is the first PDP covering a 20 year period (Previous plans last 5 years and 15 years). Therefore, long-term demand forecast and investment planning will be less accurate and err from the reality. • Notably, even though Thailand’s PDP noted an aspiration to harmonize its renewable energy component with its Link to 15-year Alternative Energy Development Plan (AEDP), for 2008-2022, developed by Department of Alternative Energy Development and Efficiency under Ministry of Energy, this is not reflected in the official PDP. According to the AEDP, generation capacity from AEDP is to reach 5,608 MW, however the official PDP only includes plans to increase generation capacity from renewable energy sources to 4,049.5 MW • Unenthusiastic promotion on renewable energy such as decreasing adders (money support per unit) for solar power and excuse that limitations on the transmission system to support electricity from any renewable energy sources for the national grid • EGAT has tried to preserve major shares in the generation market by determining that EGAT’s proportion in new power plants must be at least 50% Process of PDP development and approval: • EGAT draft and propose to Ministry of Energy and Energy Regulatory Commission to review • Approval process by National Energy Policy Committee (NEPC) comprised of Ministers, representatives from the National Economic and Social Development Board while the Prime Minister serves as Chairman. • PDP will be proposed to the Cabinet as a final step In addition to PDP and AEDP, the government had just conducted a preliminary study of a 20 year energy- saving plan, which aims to review potential of all sectors in reducing energy demand by 25 % by 2030. LINKS Articles

23. History of Electricity Reform Subpage Thailand’s initial centralized economic and social planning saw electricity projects as basic investments providing Thai citizen’s with basic infrastructure to improve their livelihoods and to to drive economic growth. Mega projects including generation stations, hydropower, coal fired power projects and transmission system were constructed gradually. State Control The government decided that the most efficient model for managing the power sector was to establish its own state owned enterprise. This led in 1968, to the consolidation of regional state owned generating companies into a central national electricity termed the Electricity Generating Authority of Thailand (EGAT). The distribution networks, Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA) were respectively set up in 1958 and 1960. MEA became responsible for power distribution in Bangkok and neighboring provinces while PEA was responsible for power distribution in the remaining provinces. By the end of the 1960s, the power system was centralized under EGAT and the two distribution companies. Privates allowed to generation In 1992, Independent Private Power Producers (IPPs) were allowed into the system through long term concessions operative power plants in accordance with Power Purchase Agreements (PPAs) with EGAT. EGAT continued to hold sole control over the transmission system operation. At the same time, the Thai government also launched a Small Power Producers (SPPs) program to promote the use of clean efficient energy or the use of renewable energy sources for domestic use. However, the plan was also criticized for the overwhelming preference for large industrial producers (who received SPP licenses) over smaller power producers including rural cooperatives, municipalities, hospitals. The first step of privatization was completed with the relaxation of power tariffs. At that time the National Energy Policy Office (under the Ministry of Energy today) believed that marketizing the power tariff would lead to lower tariffs over time. However, the marketization of power tariffs led to a rapid increase due to rising oil and gas prices at the same time.

24. History of Electricity Reform Subpage (Con’t) ‘Privatization without Extensive Liberalization’ In 2000, the second step of privatization involving the introduction of the power pool model along with the unbundling of the generation, transmission and distribution systems was introduced. These were in preparation for complete market competition in the power market by 2003. However, with such attempt, it was However, the attempt at privatization was not a success. Many arguments were raised by parties including academics and consumers that it was too risky to allow for a market mechanism to control prices, regulatory body, etc. Two other options were proposed introduced, EGAT proposed a Third Party Access Model which allows consumers to independently choose suppliers while Academics proposed Single Buyer Model which allows for public ownership of distribution and even transmission. Later, EGAT proposed a different model moving from ‘private sector participation competition to achieve efficiency’ to one that allows for ‘national efficiency and competitiveness and secure regional leadership” and ‘To build strong national champions in the energy sector’. Within this model, EGAT would need remain a large major player in order to compete against multinational energy companies in the region. ‘National Champion’ and Enhanced Single Buyer (ESB) in the present model Under this proposed model EGAT can be the National Champion and maintain its monopoly position. This model is different from a single buyer in which private entities have to compete with EGAT in generation but EGAT retains a monopoly on the transmission system and a majority of generation. EGAT had plans to reform itself into a private company, listing itself on the stock market to raise capital and expand in the region. However, this plan finally failed in 2006. LINKS Articles

25. Structure and Overview of Thai Power Sector

26. ... Steps involved to deliver electricity to end-users Retail, Meter Reading, Billing & settlement Power Generation Fuel procurement Transmission Distribution

27. Generation (% share) EGAT (100%) SO Transmission Distribution Structure of Thai power sector EGAT (50%) IPPs (41%) Import (2%) VSPPs (<<1%) SPPs (7%) Govt. ERC PEA (67%) MEA (31%) Direct Customers (2%) Users Users Remarks: - Figure of % Share in 2008 - ERC = Energy Regulatory Commission ที่มา: EPPO Aug 2009

28. Import & Others, 3% Hydro,6% Coal & Lignite, 21% Oil,0.1% Natural Gas, 70% Power generation (May 2009) Generation by fuel type Generation by sources IPP 12,151 MW (43%) EGAT,13,615 MW (48%) SPP 2,073 MW (7%) Import & Exchange 640 MW (2%) Total: 28,482 MW ที่มา: EPPO Aug 2009

29. Power Supply Management • Review the Power Development Plan (PDP) every 6 months to be in line with the changing demand situation • Maintain the reserve margin to be no less than 15% • Diversify fuel types in power generation: • Give importance to SPPs and VSPPs using renewable energy as fuel • Study the feasibility of nuclear power generation. • Promote Clean Coal Technology for coal-fired power generation • International cooperation in power development projects: • Power purchase from LPDR, Myanmar, China, Cambodia and Malaysia ที่มา: EPPO Aug 2009

30. Overview of Electricity Generating CapacityPDP 2007 (Revision 2: @ Mar09) • Installed capacity as at Dec 2008 29,140 MW • Total increased capacity (2009-2021) 30,155 MW • 2009 - 2015 12,605 MW • 2016 - 2021 17,550 MW • Decommissioned plants -7,502 MW • Total generating capacity up to 2021 51,792 MW Comparison of New Generating Capacity by Source of Supply (in MW) ที่มา: EPPO Aug 2009

31. IPPs:1st IPP Solicitation in 1994 7 Selected IPPs with PPA Signed ที่มา: EPPO Aug 2009

32. IPPs:2nd IPP Solicitation in 2007 4 Selected IPPs with PPA Signed Remarks: 7 Dec 07: NEPC approved the next IPP Solicitation for power procurement during 2016-2018. ที่มา: EPPO Aug 2009

33. Promotion of SPP/VSPP Power Generation Small Power Producer (SPP)/ Very Small Power Producer (VSPP): • A generator of a private entity, state agency, state-owned enterprise, using cogeneration system or renewable energy, agricultural waste or residues, residues from agricultural or industrial production processes to produce electricity. • SPP Sale of electricity to the Electricity Generating Authority of Thailand (EGAT), is >10 MW up to 90 MW. • Firm contract: 20-25 years • Non-firm contract: 5 years and renewed automatically • VSPP Sale of electricity to the Distribution Utility, i.e. Metropolitan Electricity Authority (MEA) and Provincial Electricity Authority (PEA), is no more than 10 MW. ที่มา: EPPO Aug 2009

34. Fuel Diversification in Power Generation Import & Others, 3% Hydro,6% Coal & Lignite, 21% Oil,0.1% Natural Gas, 70% Status of Power Generation from Renewable Energy and Potential & Target in 2011 Share of Power Generation by Fuel Type(@ May 2009) • Currently, Thailand’s power generation depends heavily on natural gas as fuel.- Efforts are being made to boost greater use of renewable energy as fuel. Existing56 MW Target 165 MW Potential 700 MW Existing 1,610 MW Target 2,800 MW Potential 4,400 MW Wind Existing 1 MW Target 115 MW Potential 1,600 MW Hydro Biomass - Sugarcane industry, etc. - Biomass power plants - Community power plants • Mini Hydro and Micro Hydro • Wind farm in southern • Thailand Existing46 MW Target 60 MW Potential190 MW Existing32 MW Target55 MW Potential 50,000 MW Existing5 MW Target 78 MW Potential 400 MW Biogas SolarPV MSW • - Urban areas • Solar homes • His Majesty’s projects • 0.1%of installation areas - Bangkok9,000 tons/day - Municipality6,300 tons/day - Industry1,000 tons/day Biogas from livestock farms and agro, palm industry (Data as at Jan2009) ที่มา: EPPO Aug 2009

35. Power Purchase from Neighboring Countries • Thailand has cooperated in hydropower development with neighboring countries, on a bilateral basis. • MOUs on power purchase have been signed with Laos, China and Myanmar, with a total power purchase of 11,500 MW. • Imported power being supplied to Thailand’s Grid: • LPDR 313 MW • Malaysia 300MW[High Voltage Direct Current (HVDC)] ที่มา: EPPO Aug 2009

36. Power Purchase from LPDR Status as at Jun09. ที่มา: EPPO Aug 2009

37. Power Purchase from Myanmar • 14 Jul 1997: MOU on Power Purchase from Myanmar (~1,500 MW by 2010). • 30 Nov 2005: MOU on Cooperation in the Development of Power Projects on Thanlwin and Tanintharyi Rivers. • Initially, Myanmar has proposed 2 power projects on Thanlwin River: (1) Hutgyi hydropower project, 1,200MW (2) Tasang hydropower project, 7,000 MW Also, Tariff MOU signed for Mai Khot coal-fired power project (369MW) Tasang 7,000 MW (Other potential projects: Upper/Lower Thanlwin , 4,000 +500 MW) Hutgyi 1,200 MW (Tanintharyi 600 MW) ที่มา: EPPO Aug 2009

38. Power Purchase from Cambodia Feasibility study is being conducted on 2 potential projects: • Strung Nam Hydropower Project 120 MW • Koh Kong Coal-fired Power Project 3,660 MW Power Purchase from Malaysia Thailand (EGAT) and Malaysia (TNB) have had power trade between each other since 1980, starting with 80 MW. • Current trade: 300 MW via HVDC (High Voltage Direct Current) system. ที่มา: EPPO Aug 2009

39. (17 November 2007) NPIEP Milestones for Nuclear Power Program Implementation NPI: Nuclear Power Infrastructure NPIEP: NPI Establishment Plan NPPDO: Nuclear Power Program Development Office NPP: Nuclear Power Plant NRB: Nuclear Regulatory Body 1st Milestone 2nd Milestone 3rd Milestone    GO NUCLEAR    Phase 2:Program ImplementationPhase - implement NPIEP with Milestones - full NRB established - legislation & international protocols enacted - suitable sites for bid selected - technology/qualified suppliers selected - prepare to call bids • Phase 0.1:Preliminary Phase • NPIPC & 7 Sub-committees appointed • Issues & Milestones considered • NPIEP prepared • Phase 3:Construction Phase • - NPIEP fully implemented • - bidding process completed • - design & engineering • - manufacturing • - construction & installation • - test runs & inspection • NPP commissioning license • Phase 4:Operation Phase • - commercial operation • - O&M • - planning for expansion • industrial and technology development plan Phase 1:Pre-project Activity Phase - approve NPIEP - set up NPPDO - infrastructure work started - survey of potential sites - feasibility study completed - public information & participation 3 years 1 year 3 years 6 years 2007 2008 2011 2014 2020 ที่มา: EPPO Aug 2009

40. Centralized structure

41. Centralized structure of electricity • Conflicts are a result of centralized structure of control • Loss of livelihood/health/forests for local people for the benefits of others, mainly urban commercial and industrial interests • Centralized grid: in many cases, makes economic and technical sense, however… • Control of a central grid need not be monopolized by one group • Structure of control determined by Cold War politics, not technical superiority

42. Problems with centralized control (1) • Separation of consumption and production leads to inefficient consumption • “Out of sight, out of mind” • Ratio of Power demand growth to GDP growth = 1.4 • Perverse incentives to exclude customer-owned generation • The more to invest, the more to profit. • Small-scale, renewable generators lack access • Energy conservation measures are viewed as a threat to EGAT’s profits.

43. Centralized & decentralized generation Cogeneration Gasifier

44. Centralized & decentralized generation Cogeneration Gasifier

45. Choice of supply options considered in the PDP by EGAT 700 MW Coal-fired power plant 700 MW gas-fired combined cycle plant 230 MW gas-fired open cycle plant 1,000 MW nuclear plant Hydro imports are politically negotiated outside of PDP process DSM/EE, RE, Distributed generation not considered as supply options

46. Centralized energy is also more costly Decentralized generation brings down costs Ireland – retail costs for new capacity to 2021 Thailand PDP 2007 requires 2 trillion baht to implement, comprising: million B • generation 1,482,000 • transmission 595,000 Transmission adds 40% to generation costs Source: World Alliance for Decentralized Energy, April 2005

47. Total at end of 200728,530.3MW Hydro import 1.2 % Hydro 3,424.2 MW 12.0 % Combined cycle 13,540 MW 47.5 % Import from Malaysia 1.0 % Gas turbines, diesel 971.4 MW 3.4 % Thermal 9,666.6 MW 33.9 % Renewables 288.1 MW 1.0 % Centralized generation wastes a lot of energy (~70% of heat value is lost & adds to climate change problem) Installed capacity by types of generation in 2007

48. Problems with centralized control (2) • Lack of accountability, transparency, participation in centralized planning processes • Political decisions masked in technical language • “Big is beautiful”, fossil fuels dominate • Social and environmental concerns are ignored • “Cost plus” incentive structure • passes risks to consumers • “Overcapacity worth 400 billion Baht” (from total assets of 700 billion Baht and annual turnover of 240 billion Baht) – Prime Minister Thaksin Shinwatra

49. Governance issues

50. Energy policy and its impacts on share prices of energy companies in the stock market • The coup-installed government announced its policy on energy investment opportunities on 3 Oct 2006 • Energy policy, PDP approval and IPP bidding resulted in significant windfall benefits for selected companies • 1 year later, the share prices of companies benefiting from the PDP jumped 66% (other companies had a 8.7% rise)