Power Sector Planning and Development: Lessons from Thailand’s and international experience Chuenchom Sangarasri Greacen 9 March 2013 WORKSHOP ON “ELECTRIC POWER DEVELOPMENT & CHALLENGES IN MYANMAR: SHARING EXPERIENCES OF THE MEKONG REGION” Tonga Puri Hotel, Nay Pyi Taw, Myanmar
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Power Sector Planning and Development: Lessons from Thailand’s and international experience Chuenchom Sangarasri Greacen 9 March 2013 WORKSHOP ON “ELECTRIC.
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Power Sector Planning and Development:Lessons from Thailand’s and international
experience
Chuenchom Sangarasri Greacen9 March 2013
WORKSHOP ON “ELECTRIC POWER DEVELOPMENT & CHALLENGES IN MYANMAR: SHARING EXPERIENCES OF THE MEKONG REGION”
Tonga Puri Hotel, Nay Pyi Taw, Myanmar
The engine of sustainable economic & social development
Environment
People(peace,
democracy, justice) Improved
living standards &economic opportunity:- Wealth generation- Access to electricity
– Main assumptions: • GDP growth• Energy elasticity (electricity growth/GDP growth)• Population growth• Econometric model with some end-use data (e.g. floor
space for offices or appliance ownership and efficiency for residential sector) if available
Source: Energy for Environment Foundation, Study Project for Load Forecast – Executive Summary.
Source : EIA,DOE, BP Statistic Review of World Energy, EGAT
Energy Elasticity = ∆t Energy Consumption/ ∆t GDP
Ave. Energy Elasticity
1.4 : 1.0
New Target1 : 1
or lower
Thailand
The government used to assume a constant Energy Elasticity of 1.4 but the assumption did not hold.
Choice of supply options considered in the PDP by EGAT
700 MW Coal-fired power plant
700 MW gas-fired combined cycle plant
230 MW gas-fired open cycle plant
1,000 MW nuclear plant
Hydro imports are politically negotiated outside of PDP processDSM/EE, RE, Distributed generation not integrated in the optimization process
• EGAT (also MEA & PEA) became “Poster-child” of World Bank, other foreign aid institutions– Access to soft loans, technical assistance, etc.– Rapid growth of sector and electrification rates– Rapid economic growth and industrial development
Outcome of Thai top-down, centralized, monopoly model
Thailand’s Fuel Mix for Power Generation
Many successes but there are also lessons learned…
• Over-projection of GDP and demand forecasts leading to cycle of over-investments
• Abandonment and discrimination of community-scale, decentralized energy systems
• High dependency on imports• Impacts and conflicts• Inequality• Inefficiency• Uncompetitive and debt-ridden economy
• A World Bank funded project completed in 1994• Run-of-river 126 MW hydroelectric dam on a main tributary of
Mekong River• Source of on-going conflicts due to impacts on fish migration
and livelihood of people
Photo: http://en.wikipedia.org/wiki/Pak_Mun_dam
Electricity productionand consumption(GWh)
1700 families relocated
Loss of livelihood for >6200 families
Loss of 116 fish species (44%)
Fishery yield down 80%
65MaeHongSong
Sou
rce: M
EA
, EG
AT, S
earin
, Gra
ph
ic: Gre
en
World
Fou
nd
atio
n
Dams Shopping Malls
Pak
Mun
Dam
Impacts of Pak Mun Dam alone
MBK
123
81
75
Siam Paragon
Central World
Changing energy intensity over 20-yr period
Data source: Energy Information Administration 2008
Office of the National Economic and Social Development Board
O F F I C E O F T H E P R I M E M I N I S T E R
Low Quality
EducationLow Quality labour
Insufficient in
R&D Investm
ent
Slow Technology Development
Low
Qua
lity
for R
aw-m
ater
ial,
mac
hine
ry a
nd e
quip
men
t
(Low margin/return)
Low B
asic
infra
struc
ture
and L
ogisti
c
deve
lopm
ent
Enabling factors:MACROECONOMICMANAGEMENT
No
imm
unity
/ H
igh
vola
tility
Fi
nanc
ial S
yste
m Lack of Saving
Lack of regulation on
industrial product’s
quality control
LowValue Creation
High Import
Contents & Sheer
size of export to GDP
High Energy Intensity& Low Efficiency& Unsustainable
structure
Macroeconomic Analysis
Thailand’s power sector: sustainable economic development?
• Evident economic, material development…• …but not sustainable
– Needs to rely on ever-increasing energy imports– Vulnerability to supply disruptions due to high level
of centralization• Unproductive, inefficient consumption only made
possible by borrowing from the past (plundering resources) and the future (debt to be repaid)– Government debt now >40% of GDP – Household debt at 20-23% of income, to rise to 40%
Thailand’s economic, power sector growth
Sustainable or quality economic, social
development
Energy obesity from unhealthy consumption habits that are financed
by debt
≠
Is there a better way?
Yes!
(Full report available for download at
www.palangthai.org)
Not all energy demand/GDP $$$ are equal: some industries have high energy, environmental costs but
Conservation New Hydro UltrasupercriticalCoal (ID)
Woody Residue NV CSP > S. ID
Lev
eliz
ed L
ife-c
ycle
Co
st ($
2006
/MW
hr)
Emissions
Transmission & Losses
Integration
Plant Cost
Source Northwest Power and Conservation Council, 6th Plan.
Northwest Power and ConservationCouncil
slide 41
6th Plan Resource Portfolio*
0
1000
2000
3000
4000
5000
6000
7000
8000
2010 2015 2020 2025
Cum
ula
tive
Res
ourc
e (
Ave
rage
Meg
awat
ts)
SCCT
CCCT
Geothermal
New Wind
RPS Wind
EnergyEfficiency
*Expected Value Build Out. Actual build out schedule depends on future conditions
Source Northwest Power and Conservation Council, 6th Plan.
Xayaburi dam vs. RE or EE investment
Economic Multiplier Effect
Source: US Department of Energy, The Jobs Connection: Energy Use and Local Economic Development, http://www.localenergy.org/pdfs/Document%20Library/The%20Jobs%20Connection.pdf Accessed March 8, 2013.
The economic multiplier, also known as the multiplier effect, is a measure of how much economic activity can be generated in a community by different combinations of purchasing and investment.
• Planning for domestic electricity demand (electrification) = Power Development Plan (PDP) process
• Planning for hydropower export should be treated separately, with consideration of other ways of generating income (e.g. tourism, agriculture, industrial development) as alternatives
Power sector development strategy
• Energy security– Ability to meet demand through sustainable and
efficient utilization of resources at reasonable cost• Alternative energy development• Energy prices and safety• Conservation and efficiency• Environmental protection
Thailand’s experience
• Emphasis of top-down centralized model• Treating demand as given• Emphasis on expansion and unsustainable
centralized technology options• Lack of meaningful participation
Strategy
• Efficient, sustainable utilization of resources– Self-reliance
• Self-reliance
– Efficiency (production and consumption)– Sustainable utilization of natural resources– Value to economy– Leveraging external resources– Role of private sector– Myanmar being “the last frontier”