Areepong Bhoocha-oom, Chairman, Electricity Generating Authority of Thailand (EGAT): Interview

Interview: Areepong Bhoocha-oom

What changes must be made to Thailand’s power generation infrastructure to accommodate anticipated rises in demand?

AREEPONG BHOOCHA-OOM: Demand for power in Thailand has traditionally risen in line with GDP growth, with a 1% increase in national GDP correlating with 1% growth in electricity use. However, when you take case studies of more advanced economies this ratio is significantly different, as many have inculcated the practice of energy efficiency. Efficiency is also the goal for Thailand. It can be achieved through one of two main avenues: using less electricity in a more efficient way or maintaining electricity use but introducing more value-added products.

The Thailand Power Development Plan 2015-36 has used economic growth forecasts to anticipate the level of future power demand. Long-term projections in 20-year cycles are necessary in the power generation sector due to the fact that investments in expanding capacity take time to actualise, with a single plant taking between four and five years to come on-line and hydro plant projects up to 10 years.

Stability of supply is not an issue in Thailand, and we are currently building up capacity for the coming 10-year period. Thailand employs a single-buyer system with EGAT serving as the buyer, and developments are built either by EGAT or independent power producers. This ensures that we can predict and manage the supply in a way that is entirely in line with demand, unlike other systems such as power pooling, which have inherent market-based risks. Still, efficiency remains a focus, and to that end complementary initiatives, such as the Energy Efficiency Development Plan, are necessary.

How will regional power grid initiatives help ensure energy security for all stakeholders?

AREEPONG: The idea of regional power grid integration has been around for a long time but there has been no better time to achieve it than now. Thailand has engaged in power trading with neighbours, most notably Laos, for several decades, but the current situation is that many of Thailand’s neighbouring emerging markets are achieving high levels of economic growth and drawing a large amount of investments, which cause power demand to skyrocket. This has been the case in Myanmar, for example, as the economic opening of the nation has resulted in an influx of activity. As such, demand can simply rise faster than what is possible in terms of increasing supply. Grid integration allows us to look at energy policy in a regional context rather than a domestic one. The region is essentially a jigsaw in this regard, and we are seeking to utilise the assets present in each nation in the most efficient way.

We envision modelling power trading in the region considering the European example, which allows various nations options in terms of purchasing power from several producers and several sources, as well as giving producers options in terms of doing business. The Laos, Thailand and Malaysia Power Integration Project is a pilot scheme to show that this type of multilateral power trading is feasible in ASEAN. The three necessary components are integration in terms of technical compliance, the legal framework and commercial contracts, and once all aspects are synchronised the various players can back one another up and make the attainment of energy security for the whole region much easier.

To what extent can alternative capital-raising methods help serve the development needs of the energy and utilities sectors?

AREEPONG: As a growing economy there are large investment needs in the power generation industry and other sectors. Energy and utilities in particular lend themselves well to using business models to enhance supply, especially given the fact that they provide critical infrastructure for manufacturers and other investors. The North Bangkok Power Plant Block 1 Infrastructure Fund was a great example of this potential, and it is something can easily be replicated in the future.