Big businesses, hotels gear for April shortfall

Economy February 20, 2013 00:00


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Major retailers, hotels and other businesses are planning strategies to cope with a possible electricity crisis in April, preparing to reduce power consumption to prevent blackouts and huge losses in revenue.

The supply of natural gas from Myanmar will be disrupted from April 4-12 as two drilling rigs in the Andaman Sea are shut down for repairs. Other fuel sources may not be enough to keep power-generating plants going at full capacity.

Viboon Kromadit, Amata Corporation chief marketing officer, said an electricity shortage during the hottest time of the year would affect industrial plants heavily, including those at Amata’s two industrial estates. About 60-70 per cent of its nearly 900 plants would be affected if there were a blackout, he said.

Ratchaburi Electricity Generating Holding has two power plants in the western province of Ratchaburi, which consume 525 million cubic feet per day of natural gas from Myanmar and have total capacity of 3,645 megawatts. When the supply from that country’s Yadana field is stopped in April, the two plants will be powered by diesel and bunker oil, said Noppol Milinthanggoon, Ratch’s chief executive officer,

Some generating units are already prepared for the fuel switch. Ratch has stockpiled 63 million litres of bunker oil and 23 million litres of diesel, sufficient for six or seven days’ operation.

Teerayuth Chirathivat, CEO of Centara Hotels and Resorts, said it was closely monitoring the energy authorities’ updates on what areas might be affected and for how long. He said all the company’s hotels could cope for a while with a cut in power supply, as all had their own generators. However, if a cut persists for long, it could be a problem.

“We may need to rely more on alternative power. At present, all our hotels use solar power for partial water heating, but this could not satisfy demand for other purposes,” he said.

He noted that electricity costs now amounted to 6-7 per cent of revenue for all Centara’s properties in Thailand. Of the total, air-conditioning accounted for 60-70 per cent.

“If the government wants our help, we’re ready to help. We have been complying with the requirements, like keeping the conference rooms’ temperature at 23-23 degrees without making clients uncomfortable.”

Kamonwan Wipulakorn, president of The Erawan Group, which operates 16 properties, said it was ready to reduce air-conditioning and turn off lights in unused areas, as long as clients’ convenience is not affected. With their own generators, the hotels should not be affected in the short term by power brownouts or blackouts. However, she is concerned that the crisis may take place during the high season.

So far this year, the group has witnessed a larger number of clients, reporting an occupancy rate of 85 per cent. In the first quarter, the average occupancy rate should be 82 per cent, against 79 per cent last year, which translates to higher power consumption.

The group has undertaken annual reviews on energy consumption, as its cost is second only to staff wages. The operating system is now designed to reduce energy consumption, while clients are urged to take part in the energy-saving campaign.

Saying that her group was also ready to help, Lisa Thomas, director of corporate social responsibility for Onyx Hospitality Group, said this was in line with this year’s policy for all of its properties to reduce carbon emissions by 10 per cent. New technology is being acquired while old properties are renovated. Amari Watergate last year installed new technology costing about Bt110 million aimed at reducing energy consumption by 15 per cent.

A source in the Energy Ministry said shopping malls and large-scale supermarkets might be urged to reduce air-conditioning from April 4-12 to lower their electricity consumption. Moving up the temperature by 1 degree Celsius would reduce power usage by 300 megawatts.

He said commercial complexes might be asked to raise the temperature on alternate hours from 9am to 8pm. This should reduce the use of diesel fuel and bunker oil for electricity generation, and the savings could be split among the complexes as incentives.

The Mall Group announced that it would control temperature and turn off lights in all offices during lunch break, with the aim of saving around five to ten per cent of overall energy consumption.

Meanwhile, large buildings will also be urged to cut power usage. He noted that industrial plants had so far avoided using power during peak hours.

“However, this initiative needs the government’s endorsement. If we win support, the initiative could be employed every summer,” he said.

Kobchai Chirathivat, president of Central Pattana, said that for three years, under a campaign to cut down energy consumption at all its buildings, the company had turned up the air-conditioning temperature by 1 degree during summer and adjusted building designs for more natural light.

Sarawut Saetiao, president of the Chiang Mai Tourism Business Association, said he hoped the government had a practical solution to minimise the impact of a power shortfall. The association is not too worried about it yet, and there is no serious talk among operators.

“Wait and see,” he said.

Tanongsak Somwong, president of the Tourism Association of Koh Samui, said last year’s blackout on the island had taught operators to prepare for the worst. Samui now has generators that can produce half of power demand in an emergency.