Year 2009

 April 2009

Relying on LNG the wrong strategy
Laos hydropower talks should be revived intact

Business

By YUTHANA PRAIWAN

Energy policy planners should resume negotiations with hydropower producers in Laos in order to balance Thailand's sources of power in the future, says former energy minister Piyasvasti Amranand.

The revised Power Development Plan (PDP) contains too much reliance on liquefied natural gas (LNG), Dr Piyasvasti said at a discussion held by the Thailand Research Fund yesterday.

He said the country should buy more power from neighbouring countries rather than import huge amounts of LNG to serve power generation plants.

During the first half of last year, due to rising construction costs, the Electricity Generating Authority of Thailand (Egat) decided to delay its talks with all four hydropower producers and a coal-fired plant in Laos. Egat wanted to settle on more appropriate prices for the power it intended to buy.

Dr Piyasvastisaid that overall costs for power plant construction had declined by 30% in line with drops in materials prices in the recession, so better prices were now possible.

He said that the revised 15-year PDP ending in 2021 put too much weight on imported LNG, which was more expensive than natural gas from the Gulf of Thailand. Consumers then would face high power bills.

The cost of power produced from LNG would rise to three baht per kilowatt/hour compared to 2.50 baht for gas from the Gulf of Thailand, he said.

Egat earlier signed memoranda of understanding for purchases with four hydropower developers in Laos: the 278-megawatt Nam Ngiep, 440MW Nam Ngum 3, the 523MW Nam Theun 1 and the Theun-Hinboun expansion phase and Nam Ou totalling 1,393 MW, along with the developers of the 1,473MW Hong Sa lignite coal-fired plant.

Six other power developers are waiting to sign agreements with Egat.

Under the agreement signed by the Thai and Lao governments last year, Thailand would buy 7,000 MW over the next decade.

The country now imports 360 MW from Theun-Hinboun and Houay Ho. Another 1,535 MW from two hydropower plants will enter Thailand's power grid soon: 920 MW from Nam Theun 2 by the end of this year and 615 MW from Nam Ngum 2 next year.

Dr Piyasvasti said that China is another potential buyer for Laos, adding that talks with Beijing were proceeding more quickly than those with Bangkok.

"Buying power from Laos would be a better choice for us compared to Burma and Cambodia, given its lower country risk," he said.

Songsak Chusanapiputt, an engineering lecturer from Mahanakorn Institute of Technology, said Laos had potential to develop 31,200 MW of hydropower, according to the Australian Agency for International Development. He said Vientiane was counting on power as a major export to help its economy.

By Bangkok Post

April 8, 2009

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