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Governance issues in the Thai Electricity Sector WRI/TEI Workshop on Electricity Governance in Asia. Chuenchom & Chris Greacen Palang Thai: www.palangthai.org 3 December 2003. Outline. Brief history of Thai electricity sector
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Governance issues in the Thai Electricity SectorWRI/TEIWorkshop on Electricity Governance in Asia Chuenchom & Chris Greacen Palang Thai: www.palangthai.org 3 December 2003
Outline • Brief history of Thai electricity sector • Story #1: Bo Nok & Hin Krud: NGOs, strategic alliances, and two coal fired power plants • Story #2: “National Champion” model • Structure • Governance issues • Story #3: Access to the grid for small renewable energy generators: law vs. practice
Brief history of Thai electricity sector • 1950-1990: Centralized, state-owned utilities • Metropolitan Electricity Authority (MEA) • Provincial Electricity Authority (PEA) • Electricity Generating Authority of Thailand (EGAT) • 1990-2000: Private capital and market based reform • Giving “concessions” to private power producers (IPPs, SPPs) to generate & sell power • Sale of EGAT’s assets: EGCO, Ratchaburi • Plan to create “Power Pool” • Break up / privatize the 3 utilities • Bidding & Market clearing price for electricity
Access to info Participation Access to justice Capacity building Story #1: Successful opposition toBo Nok & Hin Krud • Bo Nok, Hin Krud = planned large coal IPPs • First case NGO challenge government energy policy on technical basis: • reliability criteria • demand projection • investment planning • 3-hour televised debate NGO vs. Government • NGO: “Project not needed because of supply glut, canceling would be cheaper” • Ultimate success: Coal projects cancelled
Access to info Participation Access to justice Capacity building Bo Nok & Hin Krud Governance issues • Success due in part to uneasy strategic alliance with EGAT & PTT • NGO capacity building • Technical analytical capacity • However, access to information remains limited/unsustainable
Access to info Participation Access to justice Capacity building Story #2: “National champion” • “National Champion” = large partially privatized, self-regulated Thai monopoly with capital to invest abroad in competition w/ other transnationals • EGAT to be the regional hub of ASEAN Grid • Privatization timeline kept – EGAT listed and partially (<30%) sold in Stock Exchange of Thailand by March 2004. MEA, PEA will follow • EGAT market capitalization: 500 billion baht (US$12.5 billion)
Access to info Participation Access to justice Capacity building “National Champion”: governance issues • No independent regulatory body • Ability to assume both private & public identity as convenient • Ability to pass on cost & risk to captive consumers • If like PTT, then rapid sell-out of stock followed by commodity price rise. • PTT “public offering” = shares for 2000 people (0.003% of Thai population) • Limited public hearing process • Listing in stock market said to lead to “good governance” but applies only to narrow accounting criteria & financial management
Access to info Participation Access to justice Capacity building Story #3: Access to the grid for small renewable energy generators law vs. practice • 2002 Cabinet approved VSPP laws passed allowing grid interconnection of renewable energy <1 MW. • English & Thai regulationas available at: www.vspp.org • After they were approved… PEA removed one key page • Page specified that expensive “block reclose” device NOT necessary • No technical/engineering reason offered
Key preliminary governance challenge Needed: Independent, empowered regulator Access to info Participation Access to justice Capacity building