Installation of new oil pipelines feature in Pongsak's 2013 policies

Energy Minister Pongsak Ruktapongpisal has outlined his 2013 policies, including the plan to install oil pipelines in the North and Northeast at a cost of Bt20 billion.

In an interview with The Nation, he said he had instructed the Energy Business Department to conduct a feasibility study on using the Energy Conservation Fund to finance the pipeline construction.

The government would return the money to the fund by collecting fees from the companies using the new pipelines, while a state entity would be set up to manage the pipelines.

"The investment in this project would save Bt2.5 billion per year in the cost of oil transport by vehicles. This would mean people in upcountry areas would be able to pay the same retail oil price as Bangkok residents," he said.

The planned pipelines would be connected to the one operated by Thai Petroleum Pipeline (Thappline) in Saraburi.

The government will also issue guidelines within the next two months on a policy to promote the generation of electricity from Napier grass.

Napier grass, originally from Africa, is also known as Uganda grass or elephant grass, as it a favourite food of pachyderms.

The government will guarantee the grass price at Bt300 per tonne to help farmers boost their income. The policy will require a total plantation area of 10 million rai (1.6 million hectares) and will encourage power-plant operators to enter joint ventures with growers on a contract-farming basis.

The ministry will provide a "feed-in tariff" subsidy of about Bt4.20 per kilowatt-hour unit for a period of 25 years to power plants that use as feedstock Napier grass supplied by local communities. The grass can be grown in many parts of Thailand, especially in areas currently used as sugar-cane and tapioca plantations in the Northeast and Central regions, provided they are situated not too far from the power grid.

The minister added that the project would spark investment of more than Bt1 trillion over the next 10 years.

ENERGY SECURITY

Pongsak said the country needed to invest heavily to ensure its long-term energy security. "We have to carry out the national energy-security policy in the areas of petroleum and natural gas to ensure the stability of electricity generation, which heavily relies on natural gas. If we don't do anything, this will affect the investment sector. If there is a blackout or an energy crisis, this will severely hit the country's production sector," he said.

The Energy Ministry is prepared to impose regulations this year requiring an increase in the statutory oil reserve from the present 36 days of consumption to 45 days, before later rising to 90 days.

"Our electricity production capacity now is 32,200 megawatts, against consumption of 26,000MW. That means we've only got a [small] reserve. Of total production, 67 per cent is contributed by natural gas. We have to seek a sufficient amount of natural gas as well as other fuels such as coal or alternative energy to cater for the rising demand of electricity in the future," the minister said.

The 2013 Power Development Plan, which will replace the third version of the 2010 plan, will raise the proportion of electricity produced by biogas to 10,000MW within the next 10 years, and this is where Napier grass will play a key role, he said.

The number of clean coal-fired power plants will be increased so that overall capacity rises to 10,000MW from the present 5,400MW over the period. The new plants will be invested in by both the Electricity Generating Authority of Thailand and the private sector. Pongsak gave an assurance that the new coal-fired plants would meet the international standard of operations for such facilities.

He also said the ministry would delay the plan to construct nuclear-power plants. The original schedule was for the plants to begin to supply power to the system in 2019, but this has now been put back to 2026.