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Better Power for Health: Healthy Public Policy and Sustainable Energy in Thai Power Sector

Better Power for Health: Healthy Public Policy and Sustainable Energy in Thai Power Sector. Dr. Decharut Sukkumnoed Faculty of Economics, Kasetsart University Healthy Public Policy Foundation. The Inspiration of the Study.

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Better Power for Health: Healthy Public Policy and Sustainable Energy in Thai Power Sector

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  1. Better Power for Health:Healthy Public Policy and Sustainable Energy in Thai Power Sector Dr. Decharut SukkumnoedFaculty of Economics, Kasetsart UniversityHealthy Public Policy Foundation

  2. The Inspiration of the Study Note: The study period is from September 2003 to September 2006 and submitted in April 2007

  3. Growing Conflicts from Power Plant Projects

  4. Growing Concerns on Health Impacts from Power Generation Direct health impacts from air pollution Loss of livelihood and food security

  5. Healthier choices are available Source: Extern-E Project, Hunt 2004

  6. HIA Development in Thailand 2000-2007 Draft of National Health Act People’s Need Learning Practices Policy actions Academic Papers

  7. HIA Institutionalization in ThailandOur Firm Ground Now • The 10th National Economic and Social Development Plan (2007-2011) • The National Health Act 2007 • People have rights to ask for HIA and participate in HIA process of any public policies • The New Constitution 2007 • Section 67 Any projects And activities that may cuase severe impacts on environment, human health, and quality of life cannot be done without conducting environmental and health impact assessment

  8. Introduction • Many impacts from power plant projects, and not determine by each stand-alone decision-making process • Power Development Plan • Master Plan of 12-15 years for all new power plants according to long-term power demand forecast • Energy options: fuel, technology, capacity, construction area • Lignite mining, gas pipeline, transmission expansion, etc.

  9. Power Development Plan (PDP) as a Policy Options • Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines • Installed capacity required for Thai power system • Power technologies will be invested • Fuel-mix for power generation • Market access for IPPs and SPPs • The PDP for the study is PDP2004 (2004-2015) which promote more natural gas in the fuel-mix

  10. The problems of the PDP process • No participation in planning and decision-making process - the parliament, senate, independent org., consumer groups, mass media • Limited goal of energy security and utilities’ least cost • Always too high power demand forecast • Limited to large-scale conventional power plant - coal, gas, dam. • Many dead-lock social conflicts at project level

  11. Power Development Planning in Thailand: PDP2007 by Ministry of Energy • Demand forecast for the next 15 years • Fuel options • Gas, coal, nuclear, renewables, etc. • Least-cost planning • Public hearing • Decision-making

  12. Systematic Over-estimation of Demand

  13. Problematic Assumption Trend of Jan 2007 Forecast Historic trend Past period (actual data) Jan 07 forecast period ที่มา: ชื่นชม สง่าราศรี กรีเซน, 2550

  14. Energy Options:The assumptions on fuel prices of PDP 2007 Imported coal: Increase 4% Oil&Nuclear: Same price in the next 15 year Gas: increase 3.6% in 15 year Lignite: Increase 47% Notes : (1–3) PTT31 Jan. 07 (55 USD/BBL) : ( 4)Electricity Generating Authority of Thailand : ( 5) Australian Bureau of Agri. and Res. Economics + Transportation cost 15 USD/Ton : (6) Ux Consulting Company January 2007

  15. Energy Options: Increase of the fuel cost Reference: Energy Report of Thailand, Dept. of Alt. Energy Dev. and Energy Conservation

  16. Fast Growing in Renewable Energy Development

  17. Energy Options: Costs of each option Advertisements by Ministry of Energy, Feb.-Apr. 2007

  18. Key Concerns on the nine PDP Options • But why all renewables are fixed at only 1,700 MW in all options? • Why include nuclear of 4,000 MW in all options? • Who set these options and what are the impacts of each option? L = Low Growth B = Base Forecast H = High Growth 1=“Least-Cost” 2=“Feasible Coal Projects” 3=“LNG + More import”

  19. The Public Hearings on PDP2007 • The Ministry of Energy arranged the Public Hearing on 19 Feb. 2007 at a hotel in Bangkok • The potentially-affected local people turned up of around 400 persons and the Minister cancel the Hearing • MoE arranged another Public Hearing on 2 April 2007 in the Thai Army Club with armed soldiers ‘for security reason’! • NGOs, academics, and the local people boycotted the Hearing

  20. No Consideration on CO2 emission in PDP2007 Reference: Energy Report of Thailand, Dept. of Alt. Energy Dev. and Energy Conservation

  21. No consideration of externalities and total cost หมายเหตุ 1. ใช้สมมติฐานว่าต้นทุนร้อยละ 12.4 ของค่าไฟฟ้ามาจากธุรกิจสายส่ง 2. ใช้สมมติฐานว่าต้นทุนร้อยละ 14.5 ของค่าไฟฟ้ามาจากธุรกิจจำหน่าย 3. ค่า CO2 ที่ 10 ยูโร/ตัน 4. ค่า Externality ตามการศึกษา Extern E ของสหภาพยุโรป และนำมาปรับลดตามค่า GDP ต่อหัวของไทย 5. การศึกษาของ World Bank 2005 6. ตามระเบียบ SPP 7. ที่มา : กฟผ. 8. Cost of liability protection, Journal “Regulation” 2002 – 2003

  22. Introduction • Many impacts from power plant projects, and not determine by each stand-alone decision-making process • Power Development Plan • Master Plan of 12-15 years for all new power plants according to long-term power demand forecast • Energy options: fuel, technology, capacity, construction area • Lignite mining, gas pipeline, transmission expansion, etc.

  23. Power Development Plan (PDP) as a Policy Options • Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines • Installed capacity required for Thai power system • Power technologies will be invested • Fuel-mix for power generation • Market access for IPPs and SPPs • The PDP for the study is PDP2004 (2004-2015) which promote more natural gas in the fuel-mix

  24. The strategic HIA • The Strategic Impact Assessment • Public discussions, Social learning process, Policy implications, Policy influence

  25. Environment Social Health Economic Concepts of the strategic HIA • Broad perspective HIA • Bio-medical VS. Socio-economic model of health • Changes of the health determinants • The Ecosystem Health Approach (IDRC)

  26. Impact Indicators Social - no. new conv. proj. - concentration ratio - decentralization ratio - renewable energy share Environment - GHG emission - SO2, NO2 - TSP - External cost Health Economic - investment - fuel cost - total cost - BOP burden

  27. Policy Options Planning Criteria PDP Options Coefficients of impact indicators Strategic Impacts Overall Comparison The methodology

  28. The potentials and reference cases of RE

  29. PDP-Renewables combines three types of alternatives • Cheaper Solutions • Revising demand forecasting with realistic assumption • DSM = 2,400 MW (from 3,000 MW potential) • Competitive Solutions • Biomass energy = 2,700 MW (from 7,000 MW potential) • Biogas = 470 MW (from 900 MW potential) • Micro-hydro = 300 MW (from 700 MW potential) • Industrial CHP 2,500 MW + re-powering of 2,800 MW • Expensive Solutions • Solar PV = 470 MW (from 5,000 MW potential) • Wind = 260 MW (from 1,600 MW potential) • Scaling down Mae-Moh Lignite power plan by 50%

  30. Comparison of Three Policy Options (Power Development Plan: PDP)

  31. Methodology for Strategic Impact Assessment Emission factors from life cycle assessment of different power technologies for Greenhouse gas, SO2, NOX, TSP, Mercury, and Non-methane VOC Environmental Impacts • Three PDP Options with the differences in • Demand forecasting • Power technologies • Fuel Mixes Co-efficient for healthy years of life loss (DALYs) from power plant emission The Eco-indicator approach Physical Health Impacts Co-efficient for mortality and morbidity (cases) from different power technologies The Extern-E approach • Distribution of GDP contribution and import burden • Plus Externality Costs Generation cost =Investment + O&M + fuel costs Economic Impacts

  32. A Cleaner Option (1):Lower Greenhouse Gas Emission 20% lower than PDP-Gas 35% lower than PDP-Coal

  33. A Cleaner Option (2):Lower Air Pollution Problem 17% lower than PDP-Gas 33% lower than PDP-Coal

  34. A Healthier Choice (1):An Extern-E Approach 300 lives can be save compared to PDP-Gas and more than 1,000 lives compared to PDP-Coal

  35. A Healthier Choice (2):An Extern-E Approach 23% lower than PDP-Gas 37% lower than PDP-Coal

  36. A Healthier Choice (3):An Eco-Indicator Approach 18% lower than PDP-Gas 40% lower than PDP-Coal

  37. Economic Benefits (1):Generation cost = 5.2% cheaper

  38. Economic Benefits (2):8.7% lower import burden and2.7% higher GDP contribution

  39. Overall Economic Benefit (3):Overall 108.7 billion THB can be saved

  40. Social Benefits from Job Creation17,611 jobs more in 2015

  41. Political Benefit:Achieving government target Government Target 6% renewable power in 2011

  42. Sensitivity Analysis I:VS Cleaner Fossil-Fuelled Technology • Environmental Impacts • PDP-Renewables would be the best option, until 65-70% of emission reduction (except CO2) in all fossil-fuelled technologies • With 20% reduction in biomass and biogas emission, the confirmation level will increase to 75% • Health Impacts • Extern-E approach – PDP-Renewables would yield the best result up to 75% health impact reduction from fossil fuelled-technologies • Eco-indicator approach - PDP-Renewables would be the best option, until 70-75% of emission reduction (except CO2) in all fossil-fuelled technologies

  43. Sensitivity Analysis II:Lower Fuel Cost Risk

  44. Sensitivity III:Higher Demand Growth • Coping Higher Demand Growth • 10% more investment in renewables and DSM • Delaying plan to scaling down lignite power plants • Install 2,100 MW CCGT by 2015 • PDP-Renewables still provides the best outcomes • 19% lower greenhouse gas emission • 14% reduction in chronic mortality • 3.1% lower generation cost • 2.3% higher GDP contribution • PDP-Renewables is a flexible option

  45. Sensitivity Analysis IV:Low Demand Growth • PDP-Gas may decide to lower demand prediction and its future installed capacity • Therefore, PDP-Gas (low) would reduce its negative impacts • However, PDP-Renewables still yield the best results in environmental, health, economic, and social impacts • Confirm that, not only lower demand forecasting, the contribution of renewable energy is very crucial for the healthier solution

  46. Conclusions from Impact Analysis • PDP-Renewables is the cleaner solution • PDP-Renewables is the healthier option • PDP-Renewables is a socially benefit • PDP-Renewables is a economically feasible choice • PDP-Renewables is a more secure and flexible investment option • PDP-Renewables can stabilize and lower negative impacts from power generation and can be a good starting point for more renewable future

  47. Real-life Difficulties (1):Require new investment scheme

  48. Real-life difficulties (2):Unfair pricing regulation • Principle: “the price for renewable power should at least equal to the avoided cost of electricity on the lower voltage grid plus a premium reflecting the renewables’ social and environmental benefits • Practice: 42% of renewable power producers get the lower rate than EGAT avoid cost • Practice: Only 17% get the actual subsidy, but only for the first five years of their operations

  49. Real-life Difficulties (3):Grid Accessing • Principle: All power producers should have equal right in accessing to the grid • Practice: Bottle-neck in the approval process makes delay in renewable investment • Practice: Utilities require unnecessarily expensive interconnection investment • Practice: After 1999, Industrial CHP does not allow to access to the grid, except Utilities’ own subsidiaries.

  50. Real-Life Difficulties (4):Monopoly Governance Structure • Four monopoly utilities control 90% of turnover in power industry. • EGAT and PTT (gas company) set up their own largest IPPs, to play as private sector. • These utilities have their own authorities in approving power purchasing contract and requiring technical improvement. • Thai government has a clear policy for privatization and eager for more profit from these utilities

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