Govt criticised over fuel policy

Auto & Audio March 15, 2013 00:00

By Kanittha Pantong
The Nation

3,166 Viewed

Environment Foundation chairman Piyasvasti advises govt to promote energy-efficient tech such as hybrids


Being a long-time expert in the energy field, Dr Piyasvasti Amranand creates waves whenever he comes out with comments on the industry, his latest being that the government has failed to deal with the energy problem, including the direction of energy use in the automotive industry.
Piyasvasti, who is chairman of the Energy for Environment Foundation (EforE), told The Nation that his work with the non-profit foundation is beneficial to the country.
The main purpose of the foundation is to support the government’s energy policies, especially increase the scale for alternative fuels that are replacing the use of imported fossil fuels.
He said the Biomass Energy Promotion Centre has been set up by the foundation to help increase the effective – and efficient – use of biomass in the country.
More interestingly, Piyasvasti stated that the government’s warning of a power crisis in April due to the planned repair of gas pipelines from Myanmar isn’t a major crisis. He pointed out that it occurs occasionally and Thailand needs to manage things efficiently, and in this respect, the previous government had done well. Most Thai power plants were able to switch to other types of fuel, and the expected crisis should pass without creating major problems for the public.
“We have known about the repairs for a long time since they had been scheduled and our regulators also know. We learned about it from documents in December 2012 and already collected the increase in FT in January. I don’t understand why this subject has been brought up right now, it is scaring everyone. In the past, energy ministers were able to manage situations like this. Major energy crises happened during the Kriengsak Chamanant and Chartchai Choonhavan governments, but today Thailand is much more prepared and we should be able to handle things more effectively than in the past,” he said.
Presently, more natural gas is being used for electricity production (45 per cent compared to 35 per cent of fossil fuels). Piyasvasti said renewable energy used for electricity production in Thailand began five years ago, but obstacles have been created for smaller producers who produce 2,000 megawatts of power from renewable energy.
“If there are no measures to curb the approval for electrical production and sales, we can increase production by another 1,000 megawatts. Right now a quota is being set up with the appointment of a renewable energy promotion committee and a committee for approving electrical plants, which are major obstacles as this is slowing down various projects, leading to a crisis due to government mismanagement,” Piyasvasti stated.
Piyasvasti said that in the past the foundation took on a large number of roles, including becoming co-investors in renewable energy projects such as solar farms.
“We joined in with the producers and finally Kasikorn Bank gave us a loan. Currently 300 megawatts have been sold to the system and more than 1,000 megawatts is being carried out,” he said.
The cost needed to produce 1 megawatt range from Bt50 million to Bt100 million.
“In the future we aim to reach the 2,000-megawatt level, which is highly probable. When everything is ready, and right now we are in the contract and approval stage, a total of Bt100 billion to Bt200 billion of investment can be expected,” he said.
In fact, this project has been promoted by many governments, but it has also been opposed by many and there has been little interest from the private sector.
“Today, our project is the most advanced in Asean and others are following us. Although Malaysia started off a few years ago, they have many reasons not to continue with a project like this. For example, being an oil exporter means that they don’t really need such a project. In terms of biodiesel and gasohol, we are the leader in this region,” he said.
According to Piyasvasti, renewable energy will have a better future if the Thai government has a clear policy.
“Nuclear power would be problematic after the East Japan earthquake, and there isn’t enough natural gas in the Gulf of Thailand. Surely this affects the cost because large amounts must be imported. Meanwhile, we are not able to develop as many alternative fuels as we want, and coal technology isn’t being developed further,” he pointed out.
“It is true that the larger economy results in more energy consumption, but this is not a surprise. But too much support can result in misuse. The fast-growing ones are CNG, LNG and LPG, which has grown 20-30 per cent per year. The price of diesel may be lower than it should be while benzene is very expensive. Prices at the refinery are similar, but at the fuel stations benzene is much more expensive due to tax collection and different types of support,” he stated.
Piyasvasti said benzene is expensive due to the money that goes into the oil fund.
“If you pull out the money that goes to the fund, benzene could be as much as Bt5 cheaper per litre. Meanwhile, LPG is incredibly cheap. The retail price at the refinery is US$333 per tonne, compared with the imported price of $950 per tonne. That’s a difference of more than $600 per tonne which is equal to Bt10 per kg. The government doesn’t have to maintain that big a gap but should maintain a level that’s fair. The question is consumers may pay more, taxis may pay more, but should the really poor people who ride motorcycles pay for expensive benzene to support LPG?” 
Piyasvasti said that various automotive policies, including emissions and energy come from various ministries – Industry, Energy and Transport.
He said if the government does not provide support or slows down development, it would affect the direction of energy consumption by the public as well as manufacturers. For example, the E85 promotion slowed down the promotion of E20, and oil companies didn’t want to sell E85 but did so just because of government support. And though more auto-makers offer E85 models, the number is still very small.
“I purchased an E85-capable car four years ago and the first day was the only day I filled the tank with E85, because there were no E85 stations. This is an example of contradictory policies that are not in harmony with the industry. Now the government has stopped the sale of 91 octane, which stimulates more ethanol use. But the government should also stimulate E20 consumption more than they’re doing. The government must also discuss the E85 issue with auto-makers,” he said.
Piyasvasti stated that if automobiles consume less energy, it would benefit the environment. He said the government should promote technologies that are energy-efficient, such as hybrid technology. However, it must not forget that diesel technology is also highly efficient. These engines are besides more durable than gasoline ones and more effective in reducing greenhouse gases.
“The important thing is Electric Vehicles (EVs), which are gaining attention globally. Although presently the EV project is not economically feasible, it is a very interesting proposal for the future. This is an important issue, considering that there is a high possibility for cost of renewable energy for electricity production to become cheaper. The price has now come down to the same level as production from natural gas, due to the higher technology and popularity of renewable energy. Surely in 5-10 years, solar cells will come with lower production costs that natural gas. So plug-in hybrids and EVs will be highly economical in the next few years. As much as 80 per cent of the energy that Thailand consumes is imported and the government should start preparing today,” he advised.
An interesting career
Piyasvasti Amranand has a highly interesting career, whether socially or politically.
He was president of Thai Airways International and is now an energy specialist having held a large number of political posts relating to energy. He was energy minister during the Surayuth Chulanont government.
Piyasvasti is the eldest son of Poraka Amranand, former deputy foreign minister and Thai ambassador, and MR Pinsai Amranand (former family name Svasdivat).
Piyasvasti was born in 1953 and graduated from Brasenose College, Oxford, in 1975 with a BA (first class honours) in Mathematics. He later obtained an MSc in econometrics and mathematical economics, and a PhD in economics from the London School of Economics.
He first worked at the Office of the National Economic and Social Development Board in 1980. In 1992, he was appointed assistant secretary-general of the Energy Policy and Planning Office and was promoted to secretary-general in 1994, a position he held for six years. Then in 2000 he became permanent secretary of the Prime Minister’s Office. During the same year he also became director-general of the Public Relations Department.
Piyasvasti has been a keen supporter of energy liberalisation and the privatisation of state enterprises. Due to a dispute with Phromin Lertsuryadech – the energy minister during the Thaksin Shinawatra government – over the electricity price structure and the privatisation of PTT and the Provincial Electricity Authority, he resigned in 2002, going on to become president of Kasikorn Asset Management.
He was appointed energy minister during the Surayuth government in 2006.
Piyasvasti joined Thai Airways in October 2009, when the carrier was mired in financial trouble. He continued to implement a turnaround plan and introduced a long-term strategic plan. With the financial position of the company being substantially strengthened, he embarked on the largest aircraft acquisition and retrofit programme ever implemented by Thai Airways, and formed Thai Smile as an initial step to compete with low-cost airlines.
EV: an unanswerable future
Among the major auto-makers in Thailand, Nissan seems to be the clearest about opening up the EV market in this country.
The vehicle manufacturer is busy launching new models such as the Pulsar, and in another two months will start offering a CNG model as well. But the company is also highly interested in its EV project for Thailand.
Nissan Motor (Thailand) president Takayuki Kimura said the company is interested in offering alternative-fuel vehicles and EVs in Thailand.
“We are discussing the matter with related organisations, both state and private, such as the PEA [Provincial Electricity Authority] and MEA [Metropolitan Electricity Authority], concerning electricity-supply projects and charging stations. Most important is the government policy that should offer more support than the present, including a cut in import duty that is still very high right now. Nissan is also negotiating with the Customs Department. In many countries such as Japan and certain Asean countries, governments there provide strong support as they consider it a clean energy that will help curb pollution. So even though we have not abandoned our plan for marketing EVs, we still do not know when we can start since we have to wait for other factors,” he said.
Meanwhile, a source from the Industry Ministry said that the present tax structure has been designed to promote investment and auto production in Thailand, and liberalisation would affect future investments in the auto industry.