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Building coal-fired and nuclear power plants is normal for most energy companies, but for Thailand's power-generating flagship, the Electricity Generating Authority of Thailand (Egat), this could become mission impossible. Under the national power development plan (PDP), Egat would have to build four more coal-fired plants with a capacity of 2,800 megawatts to serve power demand between 2013 and 2016.
If that is not difficult enough, Egat would be the first company to build four nuclear power-generation units, scheduled to start operation between 2020 and 2021.
Egat governor Sombat Sarntijaree admitted the authority would need to launch a publicity campaign to promote acceptance of the new projects.
Coal has proven controversial in Thailand and three coal-fired plants have been killed: Hin Krut, Bo Nok and lately, the project proposed by IRPC Plc, which had not even selected its construction site. ''No matter how advanced the technology, the public just doesn't want it,'' he said.
Egat is in the process of conducting a nuclear site study, selecting technology and preparing for human resources training.
The preparation process needs to be wrapped up between 2009 and 2011, when it is scheduled to start construction in accordance with the PDP.
The only hope so far is the local community development fund, which would be set up in compliance with the Energy Business Act.
The fund would require power plants to contribute to a fund that would tackle environmental and humanitarian problems near the facilities.''The fund would be like an address by the power business operators, which commit to taking all responsibility for their investments,'' he said.
''It will mitigate the strong protests of local communities led by the environmentalists and non-government organisations.''
He said the failure of coal-fired plants such as Hin Krut and Bo Nok, which were aborted several years ago, were the main catalyst for protests.
He said Thailand must curb its reliance on natural gas in generating power since fuel prices would be increasing in line with oil.
World prices of liquefied natural gas (LNG) are 330-350 baht for one million British Thermal Units (BTU), compared to 220-230 baht for natural gas from the Gulf of Thailand.
However, PTT Plc, the majority state-owned oil and gas company, expects to import LNG in 2012.
Growing gas demand means that reserves from the Gulf of Thailand would be insufficient to serve electricity demand.
However, PTT is facing difficulties closing deals with suppliers, since LNG is the main fuel serving global demand.
The cost of electricity is based on a current price of $60 per tonne of imported high-quality bituminous coal. That would mean coal power would cost about 2.10-2.20 baht per kilowatt/hour (kwh), Thai natural gas 2.06 per kwh, LNG 2.60-2.70 baht and hydropower 1.80-1.90 baht.
LNG is expected to be the main fuel for the independent power producers (IPPs) _ three companies have received IPP licences for a total capacity of 4,400 MW.
He said prices of gas and LNG next year would be higher since fuel-oil prices, which are used as the benchmark to calculate the country's gas price, had reached nearly $80 a barrel in Singapore. The state still uses the existing benchmark price of $60-65 a barrel.
''Normally, we use the fuel-oil price in Singapore as our benchmark to set the natural gas price. The reference price of fuel oil we use now is far below the actual prices, so it must be much higher, in line with its actual costs,'' he said.
Thailand's dependence on natural gas for as much as 70% of its electricity could harm the country's competitiveness, he said.
Diversifying fuel sources would help the country to balance bargaining power among fuel suppliers.
Egat is in the process of securing additional fuel sources from neighbouring countries and joint-venture partners.
Overseas investment is made through its subsidiary, Egat Inter Co, which acts as an investment to distribute electricity back to the parent company.
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