Govt monopoly 'retards move' toward clean, safer fuels

The government's monopoly on energy is depriving Thailand of an urgent need to seek out more innovative power sources , leading economists warned yesterday.

Surging oil prices and diminishing reserves, coupled with carbon emission constraints, have prompted many countries to actively pursue a policy of sustainable, clean energy by adopting wind, solar, hydrogen, biomass and biofuel technology.

Thailand, on the other hand - they pointed out- still relies heavily on old energy sources and showed little interest in change because the power sector is largely controlled by a static bureaucracy.

Worsening the situation are legal structures that prevent real competition especially from overseas, said the economists.

"Australia, for instance, has a lot of expertise in alternative energy technologies, but it cannot enter the Thai market because of limitations set by the Foreign Business Act," said Dr Duenden Nikomborirak, chief economist at Thailand Development Research Institute.

"The energy industry is becoming similar to the telecommunication sector in that it needs to move forward with fast changing technology, investment and dynamism. But the country's power sector is moving in the opposite direction," she said.

In fact, it has experienced a regressive trend in the past decade in competition and dispersal of ownership, she added.

The concentration index is higher now than the past 10 years, she said.

"We almost have no private sector involved in the energy sector," she told the annual economics symposium on World Energy Situation and Thai Response, organised by Thammasat University's Faculty of Economics on Wednesday.

The Electricity Generating Authority of Thailand (Egat) and its subsidiary companies control 91 per cent of power generation, said Asst Prof Puree Sirasoontorn, an economics lecturer at Thammasat.

"Despite reform attempts and entries of a few power producers, the sector is still under the control of Egat, which is the single buyer and controller of the electricity transmission system," Puree said.

"Moreover, Egat is a major shareholder of many other power producing companies. This cross ownership adds to the problem."

PTT, in which the Finance Ministry holds the largest stake, is a major shareholder in five of the country's six oil refineries, Duenden said.

On the retail side, it is also rapidly taking over service stations previously operated by Thai and foreign firms.

A lack of vision is also reflected in the current National Power Development Plan 2007-2021.

The 15-year plan still relies on energy production from traditional sources such as natural gas, coal, oil and nuclear plants.

In contrast, renewable sources such as biomass, wind and solar are expected to form less than 2 per cent of the country's future energy sources under the plan.

"Thailand does not seem to be interested about new energy sources despite the great potential for renewable energy for the country," said Dr Chalotorn Kansantisukmongkol of Thammasat University.

Worse, the dependence on fossil fuels at a time when the world is addressing climate change, reflects a lack of awareness, he said.

Thailand has great potential for renewable energy and conservation, said the expert.

From his studies, renewable sources such as biomass, biogas, micro-hydropower, wind and solar have a combined potential of producing 9,000 megawatts.

But the government's current power development plan has set the ceiling at just 1,700 megawatts from such sources.

Piyasvasti Amranand, a former energy minister, said there is room for renewable energy under the plan.

It can be constantly adjusted to fit environmental changes, he said.

"If it were not for support price incentives for producers of renewable energy by the Energy Ministry, there would not be even 1,700 megawatts entered for the plan," he said.

The private sector welcomes a restructuring of the energy sector, especially as regards the single-buyer system.

Jen Namchaisiri from the Industry Council of Thailand said the private sector would benefit from decentralising where the industry is allowed to directly buy power from local energy producers in the provinces.

"There are community-based power producers which cannot sell the surplus electricity they generate," he said.

"We would like to buy from them and are willing to pay the fees to use the transmission grid. This will reduce waste and increase the efficiency of the power genera tion system."