No more coal power plants needed

Last Thursday, the Electricity Generating Authority of Thailand (Egat) confirmed that it will construct six new coal-fired power plants by 2025. On many levels, building these new power plants seems not to be a well thought-out plan.

At the local level, coal-fired power plants would adversely affect communities in these areas. Where such plants have been constructed in southern Thailand, they have polluted waters, reduced fish stocks, damaged crops, and contributed to a high concentration of respiratory disease. Nonetheless, Egat has yet to conduct comprehensive environmental impact assessments (EIAs) in areas which would be affected by these new plants.

Aside from environmental damage, there are economic and livelihood questions. In particular, the new power plant in Krabi is likely to hurt tourism. "If this power plant happens, southern Thailand will lose a lot," said Krabi resident Akradej Chakjinda. The majority of residents in these areas do not want the projects and a number have voiced their disagreement through protests. If Egat goes ahead with these plants, the agency will do so against the wishes of these residents.

At the national level, Thailand does not necessarily need this additional energy. Despite previous attempts to liberalise and reform the sector, weak regulation, a lack of regulatory oversight, and little domestic competition enable Egat to exert significant power over the country's electricity development. Egat has created a cost-plus tariff system which guarantees that Egat earns revenues based upon the amount of electricity it sells.

Further, legal mechanisms are in place which allow Egat to pass along to consumers the costs of over-investment by raising tariffs. This incentive spurs continual expansion in the system and a penchant to overstate demand, which this agency has done for the past 20 years. For example, in 2012, Thailand's peak power demand was 26,121 megawatts while its total generating capacity was 32,395 megawatts. Civil society groups decry that this incentive scheme promotes the development of large-scale, profitable electricity projects rather than renewable energy investments and energy efficiency policies which would reduce demand. Coal-power plant projects increase both Egat's influence in the electricity sector and its profits and, thus, its commitment to expansion.

At the international level, the Thai government signed the Paris Agreement in April, pledging to cut its climate change emissions by 20% by 2030. In 2011, a number of Thai government leaders blamed the heavy flooding on climate change. At the climate change conference in Paris last December, Prime Minister Prayut Chan-o-cha called for "sustainable growth". If the government is serious about meeting its emission pledges and reducing the threat of climate change, then it would be wise to halt Egat's plan to build additional power plants. These plants would only further Egat's profits while increasing the country's emissions.

Instead, the Thai government could take a number of actions to curb demand for electricity. First, neither the national nor the provincial governments have regulated electricity usage in new buildings, such as how much electricity per square metre shopping malls should use. Witoon Permpongsacharoen, director of the Mekong Energy and Ecology Network, estimates that such regulation would reduce demand by 30%.

Second, the government has not offered sufficient incentives for developers to follow green building codes, nor penalise those who do not comply with the codes. Consequently, as of April 2014, only 30 buildings in Thailand have received green building certifications, in comparison to 1,800 certifications in much-smaller Singapore.

Third, neither the Metropolitan Electricity Authority (MEA) nor the Provincial Electricity Authority (PEA) has created a pricing structure to discourage heavy users from consuming electricity. It is not much more expensive for a shopping mall or a factory to buy electricity per unit than it costs a home resident. Consequently, the price of electricity has had little effect on curbing consumption by affluent consumers and large businesses.

Fourth, all electricity consumers are obliged to buy electricity from both PEA and MEA, agencies that monopolise both distribution and retail. Therefore, these state-owned enterprises have little incentive to improve either demand-side management or their overall performance. This leaves consumers no opportunity to actively participate in either managing the power grid or their own monthly utility bills.

Moving from the demand to the supply side, there are sensible solutions on the table. The World Wildlife Fund (WWF) recently launched a report stating that Thailand could meet all of its energy needs from renewable and sustainable energy sources. While Thailand does have a burgeoning renewable energy sector, the government could do more to expand this production from its current base of roughly 5%. For example, the country could produce more energy from biomass waste derived from the agro-industry: rice husks, wood chips, and livestock waste. Beyond that, the country's offshore wind potential is yet to be fully utilised.

Given the Thai government's assertion that it is trying to save money, instead of recent proposals to cut financial support for the elderly, it would be more beneficial to limit investment in unneeded and costly coal-fired power plants. Instead, the government should invest in curbing demand, improving efficiency, and promoting renewable energy, all of which are more affordable, equitable and better long-term financial policies, would improve the sustainability of Thailand's development, and help demonstrate that Thailand is an ethical global citizen. These are also ways to keep coal where it belongs -- in the ground.

Danny Marks is a PhD Candidate in Human Geography at the University of Sydney.

About the author

Writer: Danny Marks
Position: Dublin City University Assistant Professor