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Governance and Power Development Planning in Thailand. www.14iacc.org www.iacconference.org www.twitter.com/14iacc. Suphakit Nuntavorakarn Healthy Public Policy Foundation and National Independent Commission on Environment and Health (Provisional) 13 November 2010.

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14iacc iacconference twitter/14iacc

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  1. Governance andPower Development Planningin Thailand www.14iacc.org www.iacconference.org www.twitter.com/14iacc Suphakit NuntavorakarnHealthy Public Policy Foundation and National Independent Commission on Environment and Health (Provisional) 13 November 2010

  2. Power Development Plan (PDP)and its importance • PDP is the long-term strategic plan of the Thai power sector (15-20 years timeframe) • PDP determines the future investment - how many and which types of power plant? • For example, total investment of PDP2010 120 billion USD • PDP also determines the future impacts of the power sector, including environmental, economic, social, and health impacts

  3. Electricity Governance in Thailand, 2nd Assessment (2006-2008) • Aim toward constructive engagement to encourage good governance • Develop and communicate the concept and assessment direction to the stakeholders since the beginning period • Participate and observe the relevant meetings and forums, as well as arrange the public forum on Power Planning for local communities and energy networks • Through the multi-stakeholders Advisory Committee, develop the indicators as well as review the draft report

  4. Electricity Governance Assessment (2nd Assessment)The part on Power Development Planning2007 • Apply the indicators from EGT and review the draft report by multi-stakeholders advisory committee • Comprise of four parts, 14 indicators • Transparency and access to information • Participation • Capacity • Accountability and redress mechanism

  5. Electricity Governance Assessment on PDP2007 • Many governance problems in the PDP2007, reflecting from many indicators in all four parts • Leading to questions for the approval of the PDP2007 and then, problems in the implementation, for example • much higher fuel price than the assumptions in the PDP • conflicts and protests in all four IPP projects and none can proceed to construction until the present

  6. The key recommendation from EGT on PDP

  7. The policy forPower Development Planning 2010 • On 7th October 2009, Ministry of Energy announced the ‘Green PDP’ policy for PDP2010 • Systematic public participation process • Reduce GHG emission from PDP2007 • Introducing ‘End-Use’ approach for demand forecast • Following the targets in the Renewable Energy DevelopmentPlan 2007-2022 by Ministry of Energy • Open for different PDP options and performing Impact Assessment to compare these options

  8. Governance problems of the recentPower Development Plan 2010-2030 • MoE made the first draft of PDP2010 since January 2010 without any public inputs or participation • MoE made decision not to use the ‘End-Use Approach’ study, commissioned by themselves

  9. Governance problems of the recentPower Development Plan 2010-2030 • The first public hearing on draft PDP2010 on 17th Feb., while the ‘Long-term GDP Growth’ study, commissioned by MoE is not finished yet. • The second public hearing on 8th Mar. on draft PDP2010, only four days after a technical hearing on the ‘Long-term GDP Growth’ study

  10. Governance problems of the recentPower Development Plan 2010-2030 • The Senate Sub-Committee on PDP arranged two public forums on 4th and 11th March, with representative of MoE said that ‘they will postpone the submission for approval’ due to the ‘Red Shirt’ protest and demonstration • The National Energy Policy Council approved PDP2010 on 12th March and the government approved on 23rd March, during severe political conflicts in the society

  11. Installed Capacity at the end of 2030 PDP2010GDP Base case กำลังผลิตไฟฟ้า Installed Capacity at the end of 2009 29,213 New Installed Capacity 54,005 Decommission - 17,671 Installed Capacityat the end of 2030 65,547 New power plants 2010-2030 • - Nuclear 1000 MW 5,000(5โรง) • - CCGT16,670(19โรง) • - Imported coal8,400(13โรง) • SPP Co-Gen. 6,919 • Renewables (VSPP, EGAT) 5,348 • - Import from neighboring countries 11,669 Unit : MW

  12. PDP2010 (GDP Base case)Installed Capacity by fuel type เมกะวัตต์ 7% 7% 7% 8% 7% 18% 18% 8% 8% 18% 8% 18% 17% 8% 7% 17% 16% 7% 7% 15% 7% 6% 15% 6% 15% 5% 5% 14% 13% 12% 11% 5% 6% 10% 8% 6% 42% 43% 43% 7% 44% 7% 45% 45% 47% 49% 51% 51% 54% 57% 64% 67% 68% 65% 64% 63% 61% 66% 60% 17% 15% 15% 13% 13% 11% 11% 12% 9% 9% 8% 4% 8% 7% 7% 4% 5% 4% 7% 7% 5% 7% 7% 7% 7% 5% 8% 8% 8% 7% 8% 7% 5% 4% 5% 5% 6% 4% 4% 7% 5% 6% 5% 5% 7% 6% ปี 9% 8% 8% 8% 9% 9% 7% 7% 7% 6% 9% 7% 6% 6% 11% 10% 10% 9% 9% 9% 8% PDP2010 : (GDP กรณีฐาน) Renewables Import Gas Imported coal Nuclear

  13. An Alternative PDP • Needed new capacity- Peak demand 52,890 MW in 2030 - Reserve Margin at 15% would need 60,824 MW in 2030 - Not 65,547 MW in 2030 as determined in PDP2010 - Need better arrangement of all Installed Capacity

  14. DSM in PDP2010 Saving target of T5 high efficiency light bulb program 2010-2019 Save 0.3% ofthe peak demand in 20 years Saving target of DSM program for 2020-2030 14

  15. DSM in PDP2010 DSM inPDP2010 Press meeting by MoE “T5high efficiency light bulbprogram will save around8,708GWh per year or reduce the expenses of 26,124million Baht per year” Average saving of1,170 GWh/year Ref. : EPPO 17th Feb. 2010 http://www.eppo.go.th/power/pdp/page-5.html Ref. : EPPO 29/09/2009. http://www.eppo.go.th/Thaienergynews/Energy_News/showNewsDetail.aspx?NewsOID=4701&GroupOID=7&SubGroupOID=22&ObjectID=3

  16. Save12% in 10 years and29% in20 ปี

  17. DSM&EE Potential inthe Industrial Sector • Financially viable potential, around 42% of total demand in the Industrial Sector (Tira Foran, 2010) • Consider achievable savings and achievable facilities • Market potential in 10 year • Save 10% of total demand in the sector • Around 10,498 GWh , 1,680 MW

  18. An Alternative PDP • Renewable Energy- Follow the High Renewables scenario of the draft PDP2010- Target of 8,581 MW in 2030- Adjust the growth to achieve the goal of 5,608 MW in the Renewable Energy Development Plan 2007-2022 by MoE

  19. Fast Growth of Renewable Energy in Thailand 1994 2009

  20. Numbers of Renewable Energy Projects applying for Investment Promotion

  21. An Alternative PDP • Co-generation and Tri-generation, that have much higher energy efficiency, when compared to conventional power plants- Follow the target in the draft PDP2010 8,631 MW in 2030- But will rebuild the existing projects, which will be retired during 2010-2030 1,798 MW • Repowering, or building new power plant at the site of retired plant • 13,600 MW

  22. An Alternative PDP

  23. Strategic Impact Assessmenton differentPDP options • Impact on energy security • Import burden andGDP contribution • GHG emission • Air pollution and waste • Health impacts • Job creation Should be share and discuss through public deliberation process

  24. DSM/EE is the cheapest energy option, but PDP2010 chose the expensive ones andtry to make them look cheap, like coal and nuclear Comparison of electricity cost from different options in Pacific Northwest, USA. Resource potential for generic coal, gas & wind resources shown for typical unit size. Additional potential is available at comparable costs. Source: Northwest Power and Conservation Council

  25. Investment and fuel costs in PDP 2010 หมายเหตุ โรงไฟฟ้านิวเคลียร์ ราคารวม - Power Plant Equipment - Site Preparation & Civil Work - Raw Water System - Land & Land Right - ระบบเก็บรักษาและกำจัดกากเชื้อเพลิง - อื่นๆ โรงไฟฟ้าถ่านหิน - ใช้เทคโนโลยี Supercritical หรือ Ultra Supercritical - ใช้ถ่านหินนำเข้าประเภท Bituminous - ติดตั้งระบบ FGD

  26. Fuel prices in PDP2010 Prices in the last10 years(US$/MMBTU) ที่มา:http://indexmundi.com/commodities/?commodity=coal-australian&months=300 http://indexmundi.com/commodities/?commodity=crude-oil-dubai&months=300

  27. The problematic regulation and conflicts of interests

  28. ROIC and Investment Efficiency • Using Return on Invested Capital (ROIC) as the main criteria for setting electricity tariff may lead to over investment • since more investment means more profit • Strong regulation on investment plans is needed, but the Regulators still lack of data, knowledge, and human resources to check and balance • The approval of the tariff is still with the National Energy Policy Council 4.8% Result: Over Demand Forecastand prefer high investment options

  29. The cycle of supporting more investment under ‘monopoly’ power OverDemand Forecast Power Planningthat preferhigh investment options 1 Benefits of utilities, energy companies, etc. 2 3 Electricity tariff that allow the pass on of excess costs to consumers

  30. Ft : Fuel AdjustmentCharge • EGAT: a part of the electricity tariff that increase or decrease automatically, according to changes in fuel costs and other uncontrol costs • The mechanism to pass on the costs to consumers, which includes • Fuel costs • Electricity price for private producers and import (including profit guarantee, compensation for inflation and exchange rate) • Expenses according to government policies (e.g. Community Development Funds, ‘Adder’ for renewable energy, etc.) • Compensation for lower sale (or over investment)

  31. Power Business PTT MEA 35% EGAT CLP Glow Energy Banpu 35% 30% 45% 14.99% 25.41% 22.42% Gluf Electric บริษัท กัลฟ์ อิเลคทริค จำกัด Thai Oil Plc. บริษัท ไทยออยล์ จำกัด RATCH บริษัท ราชบุรี โฮลดิ้ง จำกัด EGCO บริษัท ผลิตไฟฟ้า จำกัด 50% 15% 50% ราชบุรี อัลลัยแอนซ์ 54.99% 50% 26% Thai Oil Power บริษัท ไทยออยล์ จำกัด 56% 24% 100% 50% 25% 100% 100% 100% 100% ผลิตไฟฟ้า อิสระ 700 MW ผลิตไฟฟ้า และน้ำเย็น ราชบุรี เพาเวอร์ 1,400 MW ผลิตไฟฟ้า ราชบุรี 3,645 MW ไตร เอนเนอยี 700 MW ระยอง 1,232 MW ขนอม 824 MW แก่งคอย 1,468 MW Glow IPP 713 MW บริษัท โกลว์ ไอพีพี จำกัด BLCP 1,468 MW 14.85% 80% 70.3% 15% 100% 100% 100% 100% อมตะ เพาเวอร์ บางปะกง 112 MW อมตะ เอ็กโก เพาเวอร์ 165 MW ทีแอลพี โคเจน 117 MW ร้อยเอ็ด กรีน 9.9 MW กัลฟ์ โคเจนเนอเรชั่น 110 MW หนองแค โคเจนเนอเรชั่น 126 MW สมุทรปราการ โคเจนเนอเรชั่น 126 MW กัลฟ์ ยะลา 23 MW โกลว์ พลังงาน 358 MW โกลว์ เอสพีพี1 124 MW โกลว์เอสพีพี2/ โกลว์เอสพีพี3 514 MW

  32. Conflict of Interests in Ministry of Energy The exception in the National Energy Policy Council Act B.E.2551 (2008) Section 5/1. A Member of the National Energy Policy Council shall: (2) not hold any post in a juristic entity operating a business related to the generation, transmission or distribution of non-renewable energy or electricity, except for the case that the Member of the National Energy Policy Council is a civil servant, who has been assigned by the government or by the Board of a given state-owned enterprise to assume a post of Board Member or any other post in that state-owned enterprise operating an energy-related business or in a juristic entity of which the state-owned enterprise is a shareholder.

  33. Conflict of Interests in Ministry of Energy The exception in the Standard Characteristic for Board and Staff of State-owned Enterprise B.E.2550 (2008) Section 6 Board member in State-owned Enterprise shall: (10) not hold any post in a juristic entity that get the concession, joint venture, or has the link to the State-owned Enterprise, except for the case that has been assigned by the State-owned Enterprise to be Chair of the board, board member, or executive staffs

  34. Examples (Data in 2008)

  35. Example Annual benefits toChair of the Board, PTT in 2008

  36. National Energy Policy Council,Chaired by PM Energy Policy Administrative Committee, Chaired by Energy Minister Sub-committee on EGAT Coordination Sub-committee on Waste-to-Energy Secretary-General orthe Deputy Secretary-Generals isthe chair of the Sub-committees Sub-committee on Energy Eff. Std. Sub-committee on Demand Forecast Sub-committee on Hydropower Sub-committee onPDP Sub-committee on DSM Energy Policy and Planning Office, MoE is secretariat of the Sub-committees Sub-committee on Environment and Energy Sub-committee onan IPP project Sub-committee on Renewable Energy Sub-committee onCommunity Development Funds

  37. Recommendations to improvethe PDP process • Change the ROIC to Performance-based regulation • IntroduceContracted Demand to large electricity users (e.g. more than 10 MW) • Improve the Ft by excluding the compensation for lower sale • DSM should be considered as one investment option for electricity supply • Compare various draft PDPs, according to Government policies and planning objectives • Integrated Resource Planning; IRP • Various forums, dialogue, etc. for public deliberation

  38. Toward Reflexive Governance in the PDP process

  39. Thank you for your attention email: suphakijn@yahoo.com

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