Powering the country

hailand’s electricity industry is expected to undergo a major overhaul in the future, with the government looking to create a competitive power pool and loosen its control of the sector.
With demand for electricity increasing there will be plenty of openings for foreign investors, although commentators believe it highly unlikely that the government will deregulate the industry by the end of 2003, as originally planned.
A recent report from Bangkok consultants Brooker Group suggests that the Electricity Generating Authority of Thailand (EGAT), which owns 87 per cent
of the country’s 22,000MW of installed capacity, has requested a delay in implementing the power pool until 2007
in order to prepare for the challenge.
When market liberalisation does arrive, the report says that EGAT’s $2.5 billion of power generating assets will be very attractive to foreign investors. Although it would most likely retain its hydroelectric installations, which provide power for irrigation and agriculture, all other plants would be sold off under the plan.

There is already private sector involvement in the generation business

ChaInoi Puankosoom, managing director of Independent Power (Thailand), sees demand rising in Vietnam and Laos

There is already some private-sector involvement in the generation business with a number of foreign players taking a role in the country’s early independent power projects (IPPs).
Independent Power (Thailand) – a joint venture between the local Thai Oil and its US partners, Unocal and Westinghouse – was the country’s very first independent power project.
Chainoi Puankosoom, IPT managing director, believes the demand for power is set to rise again, following the economic crisis, which will create new opportunities for private developers.
He says Thailand can also offer know-how to neighbouring markets experiencing their own growth. “We see an increase in demand for power in neighbouring countries like Vietnam and Laos,” he says. “We think our knowledge of the power business will give a contribution to these countries.”

Randolph Howard, president of Unocal, says that commitment to price stability has aided the development of the sector

The bulk of Thailand’s power generation relies on natural gas sourced from PTT and its foreign suppliers, although there are plans for three new coal-fired generating stations.
US firm Unocal, the first company to produce natural gas in Thailand, has played a crucial role in the development of the country’s power sector in recent years. As well as taking a stake in IPT, it is also one of the leading suppliers of gas for power generation in Thailand.
Randolph Howard, president of Unocal New Ventures, says the company’s commitment to price stability through
long-term contracts has aided the growth of the power sector.

“Consequently, Thailand has been able to build infrastructure such as gas-based combined-cycle power plants and networks that deliver the gas to those plants,” he says.
“With this efficient generation system, the price of electricity in Thailand can become the most competitive in the
Asean region.”
The company is investing heavily in its Thai gas business with plans to inject some $490 million a year over the next
five years to maintain its production levels of one billion cu ft a day.
It has also commenced crude oil production in the Gulf of Thailand and expects to be pumping 18,000 barrels a
day in 2002.