Siri Jirapongphan, Minister of Energy : Interview

Interview : Siri Jirapongphan

Under Energy 4.0, what are the country’s plans for sustainable energy generation systems?

SIRI JIRAPONGPHAN: Energy 4.0, or Thailand 4.0, will prioritise sustainability, bringing smarter living, infrastructure and systems together. Biomass power plants are now cheaper to build and operate due to the availability of smarter systems. Therefore, we will be increasing the number of power plants that use biomass as fuel. Smart distributed generation systems will also enable these plants to be built at locations close to biomass sources and demand centres. The use of locally sourced agricultural residue to fuel these plants will not only lower operational costs, but benefit the social integration of local communities.

What steps are being taken in preparation for the end of the concession periods for the Erawan and Bongkot gas fields in 2022? SIRI: The natural gas supply from the Bongkot and Erawan fields accounts for over 75% of domestic production, and 50% of the country’s natural gas consumption. This is a significant contribution. If we lose these two sources of gas supply, then we will be faced with problems. Therefore, we are working to ensure the continuity of gas supply from the two fields, and we are establishing terms of reference to secure a new operator for each of these fields. Since it has been determined that the “production sharing contract” fiscal regime is more suitable for the management of these fields than the previously used concession contracts regime, the terms of reference will need to be designed specifically for this purpose.

Existing players, which include Chevron for the Erawan gas field and PTT Exploration and Production for the Bongkot field, are eligible to contest for the operating rights under the new contracts. One of the major requirements for the new operator is the commitment to produce a minimum quantity of gas supply, which is 800m standard cu feet per day (scfd) for Erawan field and 700m scfd of the Bongkot field, for the first 10 years of operation, starting in 2022. This total gas production of 1.5bn scfd – much lower than current production rate of 2.1bn scfd – takes into account the natural decline in output of matured fields that have been in production for over 30 years.

How will the use of coal change as the country transitions to a more eco-friendly economy?

SIRI: Thailand is one of very few countries where coal’s contribution to the primary energy mix is relatively low, making up 18% of it, where 4% is domestic lignite and 14% is imported coal. That is a very low percentage compared to neighbouring countries, where coal makes up as much as 40% of total primary energy consumption. Therefore, it is in Thailand’s strategic interest to raise the share of coal in domestic energy production. This is important when we consider the need to keep our electricity costs in check, while ensuring the security of our fuel supply, all without contravening the country’s commitment to the COP21 UN Conference on Climate Change agreement.

That does not mean that we will intentionally increase our consumption of coal, but rather that we will responsibly increase our use of coal in power generation while also increasing the share of electricity produced from renewable energy sources, particularly solar, wind and biomass. However, agreeing on an appropriate site to build a coal-fired power station is currently a truly formidable task.

Therefore, we will be undertaking a range of inclusive strategic environmental assessments to ensure that a number of possible sites are identified as acceptable to local communities prior to undertaking a specific project. It is our plan to increase the contribution of both coal and renewable energy sources in our power generation mix to accommodate for the decline of natural gas supply, from the current level of 65% to an anticipated 30-40%, of the Thai fuel mix.