Egat says cost cuts keep FT from rising
The Electricity Generating Authority of Thailand (Egat) has confirmed that the fuel tariff (FT) for the four-month period starting from October will not be raised, as measures are in place to reduce fuel costs by Bt4 billion.
Norkhun Sitthiphong, deputy energy permanent secretary and Egat chairman, said yesterday after the board meeting that if it were not for the three measures the FT would probably have been increased to 12 satang per unit during the period.The three measures put in place to reduce fuel costs include the purchase of power from BLCP Power Co's coal-fired power plant six weeks ahead of schedule. The first lot of energy from the plant will be streamed by mid-August and the second lot in October. The purchase price is fixed at Bt1.30 per unit on average. With the power purchase in place, Egat can stop buying bunker oil, estimated at 100 million litres a month, for generating power. That could reduce fuel costs by Bt2.5 billion. The second measure has to do with the speed-up of the shipment of natural gas to the Namphong power plant in Khon Kaen, which should further save bunker-oil consumption by 60 million litres a month, or Bt650 million per month. The third would be to produce more hydropower. Sahas Prataknukul, assistant governor of Egat, said that as a result of these measures there would be a significant drop in power generating costs during October 2006-January 2007. He added that under normal circumstances the tariff would have gone up to 12 satang per unit based on the increase in the natural-gas price from Bt196 per million BTU during the June-September period to Bt214 in the next 4 months. Norkhun added that Egat would find ways to minimise any FT increase. The shipment of natural gas from the third pipeline should help, according to Norkhun. "The electricity price could be further reduced if Egat's return on investment is revised, due to the lower power demand and the resumption of the state enterprise status," he said. The Egat board of directors has also approved Bt8.5 billion to be invested in new power plants that will be fuelled by alternative fuel. The plants, with 140-megawatt capacity, represent 5 per cent of the combined 2,800 megawatts to be produced by Egat's four new power plants. Another investment Egat is planning is on dam construction. That would include spending Bt4.7 billion on a project that can produce 78 megawatts of power a year. It will also invest Bt3.8 billion to purchase 60 megawatts from private generators. The memorandum of understanding with the Royal Irrigation Department will be signed soon, Norkhun said. The generating cost will be Bt2.20 per unit on average, and the power will be ready during 2009-2010. Out of the power purchase from private generators, Egat sets to buy 10 MW of power produced by solar energy, 10 MW from waste and 20 MW from biomass. Egat will also invest in 1 MW of solar power on its own and 1.5 MW from wind power. "The draft bidding document will be completed within three months, and the power from private generators should be streamed by 2008," Norkhun said. He noted that alternative fuels would push up Egat's average generating cost by 0.5 satang per unit. At present, solar power cost is at Bt18-Bt19 per unit, wind power Bt6, waste Bt4.6 and biomass Bt2.6. He also said that at next month's board meeting, Egat would discuss the new power-generating plan to cope with declining demand.
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