Govt lays out energy supply plan

Govt lays out energy supply plan

Purchasing contracts 'problematic'

Sompop: Long-term contract
Sompop: Long-term contract

Thailand is unlikely to face the shortages of electricity being experienced in Vietnam and Sri Lanka, the Energy Ministry said on Saturday in an attempt to allay fears that the problem could spread to Thailand as well.

State-run Vietnam Electricity warned recently of electricity shortages due to tight coal supplies. Meanwhile, Sri Lanka announced 13-hour daily power cuts starting on Thursday after the South Asian nation said it had run out of hydroelectricity amid fuel supply shortages.

Citing the results of a check with the Electricity Generating Authority of Thailand (Egat), Sompop Pattanariyankool, spokesman for the Energy Ministry, said Thailand has secured a long-term coal purchasing contract to guarantee coal supplies.

The spokesman did not elaborate on the contract and who will supply the coal to Thailand. However, Indonesia, Australia and Russia exported the largest amounts of coal to Thailand in 2019, according to Greenpeace.

In addition, he said the public is being encouraged to use energy sparingly as prices for imports, such as natural gas, are rising steadily. The ministry hopes this will help ration energy stocks.

"Thailand still has high energy security," Mr Sompop said.

Witoon Permpongsacharoen, director of the Mekong Energy Ecology Network, said Thailand may be spared due to how it purchases and reserves power.

He said Vietnam and Sri Lanka have adopted the "Entrance Centre Buyer" energy management system, which can be used in countries with a good economy.

However, it will pose problems for others as the model lacks the flexibility required for dealing with a changing energy situation.

"Egat relies 5%-6% on hydropower energy, 10%-18% on lignite energy and more than 60% natural gas," he said. "And because [our] hydropower energy is imported from Laos, drought won't affect our hydropower supplies.

"Our problem will instead be overwhelming debt [incurred from long-term energy purchasing contracts] that we will be dealing with a long time from now," he said. "Despite [Thailand's] already huge debt, we haven't stopped making new contracts."

In reality, Thailand has energy problems, but the country's economic system is still capable of coping, he said, adding Egat has shifted the burden of energy costs to consumers.

Unlike Thailand, Sri Lanka doesn't have sufficient foreign reserves to buy natural gas and generate electricity when encountering hydropower generation problems, Mr Witoon said.

Sri Lanka has also become debt-strapped after it borrowed funds from China under the Belt and Road Initiative, he said.

Egat has signed energy purchasing contracts lasting no less than 20 years, and it is hindering efforts to push the country to switch to renewable energy, he said.

Thailand has in advance purchased substantial energy supplies from private parties for its energy reserves, and half of those supplies have not yet been produced, he said.

"A shortage of electricity won't happen but an oversupply will," Mr Witoon said. "And we have stranded costs to pay."

Unlike Vietnam, Thailand relies far less on electricity generated by coal, he said.

The neighbouring country has over the past decade built a large number of coal-fired power plants in what appears to be over-planning to facilitate economic growth, he said.

Initially, Vietnam aimed to equally rely on nuclear and coal-fired power plants, but as the country couldn't continue with its nuclear plans, it turned toward fully supporting coal-powered plants.

Vietnam used to be a coal-exporting country but now it has resorted to importing coal to supply its many power plants, he said. This is an indication of how much the country has become dependent on coal-fired energy, he said.

Meanwhile, Khomgrich Tantravanich, secretary-general of the Energy Regulatory Commission (ERC), said a new power tariff will take the price of electricity to an average of 4 baht per kilowatt-hour from May to August, it is expected to hit an average of 4.4 baht from September to December.

The move stems from huge decreases of natural gas off the Gulf of Thailand, causing the kingdom to import expensive liquefied natural gas (LNG), and the expiry of a gas production concession at the Erawan gas field causing a delay in new gas exploration and production, he said.

Thailand plans to import 4.5 million tonnes of LNG this year, about 15% of the country's total gas supply, according to the National Energy Policy Council.

Higher LNG gas prices followed a rise in global oil prices, which began last year when many countries eased Covid-19 lockdown measures and resumed economic activities. LNG prices in the spot market are about two times higher than prices of gas in the Gulf of Thailand.

The ERC is working to prevent an electricity shortage in the kingdom by using cheaper fuels to produce electricity to offset the increase in fuel tariff, Mr Khomgrich said.

One measure is to buy 400 megawatts of electricity from biomass power plants, he said.

"Saving energy and using it more efficiently will be the best solution," Mr Khomgrich said.

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