The Federation of Thai Industries (FTI) has agreed with the plan to develop a coal-fired power plant in Krabi, saying the delay or cancellation of the project would lead to insufficient power supply that could cut the gross regional product (GRP) in the South by at least 1%.
Energy policymakers will make a final decision Friday about whether the government will proceed with the plan to build a 800-megawatt coal-fired power plant in Krabi.
The project has been delayed for about two years because of strong opposition from local residents and non-governmental organisations worried about the plant's potential adverse effect on the environment, which could damage the tourism industry, which accounts for some 17% of the country's GDP.
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Power supply also plays a crucial role in other sectors, including industry.
Chen Namchaisiri, FTI chairman, said the FTI agreed with the plan as it would generate sufficient power supply for the region, where power demand grows at an average of 5% a year.
"Although we understand the concerns about the environment and tourism, we still believe a coal-fired power plant is the right answer for the current situation as the region needs more power at an appropriate price," said Mr Chen.
"We want the plant to have good governance so it is run with minimal effect to the country's environment."
Delays have pushed the commercial operation date from December 2019 to some time in 2021.
He said further delays in plant construction could mean power shortages, disrupting processes in the industrial sector and hurting the tourism industry, which generates the major proportion of regional revenue.
"A possible blackout or brownout in the region would mean disruptions in production industries, insufficient power for hotels, falling competitiveness and a fragile economy," said Thanarak Phongphatra, vice-chairman of the FTI.
He said a power shortage would lead to a drop of at least 1% of the GRP, which is 1.13 trillion baht, or 8.6% of the country's GDP.
Rubber processors, food processors and agricultural processors in the region have limited choices for power supply at a reasonable cost in order to retain their competitive advantage, said Mr Thanarak.
Mr Chen said the choice consists of buying more power from Malaysia at cost of 12-15 baht per kilowatt hour, or firms generating their own power from a diesel-power generator that would cost 9-12 baht per unit. The current power cost from the Electricity Generating Authority of Thailand is four baht per unit.
Some businesses plan to develop their own biomass power plants, but this requires a huge investment and the South has limited agricultural waste to power such plants, he said.
Power demand in the South peaked on April 18 last year at 2,630MW, while total supply from regional power plants was 2,225MW. The gap of around 400MW had to be transmitted from the central region or bought from Malaysia.