Thailand’s state-run Electricity Generating Authority of Thailand (Egat) faces competition in bids to operate large power plants
21 November 2019
Egat‘s Khanom power plant in Nakhon Sri Thammarat. A tentative plan aims to deregulate power generation in Thailand.
Thailand‘s power-generating capacity will be deregulated in the near future, meaning the state-run Electricity Generating Authority of Thailand (Egat) must compete with private firms at auctions for new large power plants, according to the tentative national power development plan (PDP).
The latest version of the PDP is envisioned as the long-term development plan for the power industry over the next two decades.
Public hearings on the revised PDP were held by energy policymakers last week in Chiang Mai, Khon Kaen, Surat Thani and Chon Buri.
The plan has been updated every few years, in 2010, 2012 and 2014, in line with economic and technological trends.
A source familiar with the matter said the new PDP will set targets along the same lines as the energy reform plan finalised in October. The goal is to let private firms compete with Egat in power generation.
But the business model of enhanced single buyer (ESB) has yet to change, and Egat remains the single buyer from all power-generating plants and distributes to end-users by itself.
“A change to the ESB model is not in the reform plan, so the policymakers don‘t have a clear-cut policy to deregulate this model after the public hearings,” the source said.
Small power producers (SPPs), on the other hand, can sell their power directly to end-users, in compliance with the law.
In the coming years, policymakers will open up auctions to independent power producers (IPPs). Egat will no longer receive priority as the first bidder considered, but rather the state enterprise will take part in auctions alongside private IPPs.
Egat has enjoyed priority in the last 30 years in being granted most IPP licences and dominating the auctions.
In 2007, policymakers set a quota for Egat of 50% of total power-generating capacity in the country, but the figure has since fallen to 37%.
The PDP allows for IPP auctions at a combined capacity of 23,200 megawatts over the next two decades, with power-purchase cost among the top factors to be considered.
In terms of resources for power generation, the PDP aims for coal-fired power to contribute 12% of total capacity in the new version, down from 23% before.
Natural gas remains the workhorse at 53%, while renewable fuels‘ share of 10% will increase to 20%. The remainder will be imported power from neighbouring countries.
Nuclear power is no longer part of the PDP. The previous plan put nuclear‘s share at 5%.
Two planned coal-fired power plants in the South remain on the back burner amid local pushback. In the meantime, policymakers will used two gas-fired power generators at Egat‘s Surat Thani operations to compensate for the shortage of power capacity in the region.
The two coal-fired plants would have a combined capacity of 2,800MW. Operations are likely to be delayed until 2023 and 2024 at the earliest.
The replacement capacity from Surat Thani is 1,400MW.
According to the Energy Policy and Planning Office (Eppo), the two coal-fired power plants have to finish a strategic environmental assessment, which may take some time, so the South needs reserve power capacity in the interim.
Meanwhile, the public has paid close attention to developments in the solar rooftop programme, which lets households sell back their surplus power output to state utilities.
A combined capacity of 10,000MW through 2037 is expected to go on stream under the Solar Prachachon programme, representing 20% of total power capacity.
The source said the revised PDP drafted by Eppo is nearly ready for the final stage of public hearings, with the office finalising some details before mandating the new PDP in early 2019.
Policymakers will launch the solar scheme at 100MW a year until 2023, increasing to 1,100MW-2,000MW until the end of the master plan.