Grainne Ryder – The Nation

May 12, 1999

DESPITE there being cheaper and less polluting alternatives, two massive coal-fired plants are being built in Prachuap Khiri Khan [Thailand], writes Grainne Ryder.

The Australian coal industry has launched a public relations campaign in Thailand to convince people that black Australian coal is preferable to locally-mined lignite because it is less polluting — as if Thais had a choice. In fact, the decision to import coal and build a string of massive coal plants along the Prachuap Khiri Khan coast was made not by local residents, or even electricity consumers, but by the central government. Even though there is no market for new power supplies, the government has agreed to guarantee the electricity producers’ revenues. It has also agreed to pass on to local residents many of the costs related to coal-burning, such as uncompensated damage to marine life, agriculture and the seaside economy.

With such protection from the real costs and risks associated with giant coal-burning plants, private companies have come up with proposals for grossly oversized power plants that would not otherwise be considered ”bankable”. If Thais had a choice, they would likely opt for cleaner fuels and lower-cost generating technologies.

In most industrialised countries, massive coal-fired power plants simply aren’t being built anymore because they are uncompetitive with the alternatives. Even though coal may be cheap to extract, coal-fired power plants are very expensive, even when citizens don’t demand pollution controls and compensation for damages.

The new super-efficient gas-turbine plants, on the other hand, cost only about half as much to build as coal plants and can be installed in less than a year, compared to five to seven years to build a large coal plant. Gas-fired plants tend to be much smaller, cleaner, and quieter than coal-fired plants; they come in standardised packages which makes it easy to install additional units as needed; and they need no on-site storage of fuel or waste, making them easy to locate where customers can best use them. Even the most advanced coal-fired power plants, equipped with the latest pollution control technology, are not as clean or fuel-efficient as a modern gas-turbine, especially if it is co-generating electricity and heat. Gas-turbine plants produce virtually no smog or acid rain, cut carbon dioxide emissions by 60 per cent, and require little or no water for cooling. A gas turbine coupled with a steam turbine to co-generate electricity and heat can burn fuel with more than 80 per cent efficiency whereas a coal-fired plant converts only about one-third of the fuel burned to electricity. The rest gets discharged as waste heat or ”thermal pollution” in nearby waterways.

In Britain, Europe, and many parts of North and South America, wherever competition in the electricity sector is introduced, power producers are switching from coal to gas and installing gas-turbine plants to take advantage of their many economic and environmental advantages. In Britain, the only new power plants being built today are relatively small combined cycle gas-turbine plants and renewable energy schemes. In the United States, some utilities are converting aging coal plants into gas-fired combined cycle gas-turbine plants for as little as US$350 per kilowatt. In North America and Eastern Europe, studies have recommended converting unfinished nuclear plants into combined cycle plants at less than the cost of finishing them as nuclear plants. Power producers in Chile and Ghana have also expanded their use of combined cycle gas-turbine plants to reduce their dependence on drought-afflicted hydro dams.

State utilities in Thailand, Malaysia, and Indonesia, built very large combined cycle gas-turbine plants in the early 1990s, in anticipation of rapid electricity demand growth. By the early 1990s, the world average size of new combined cycle gas-turbine plants had dropped from 600 MW to 100 MW, according to the industry journal, Gas Turbine World. The era of high-risk investments in large power plants of any kind, for most governments, was over; a new era of private investment in less-risky, smaller-scale power plants, that don’t require government subsidies, had begun.

Even the World Bank, a long-time financier of Egat and large-scale power projects, has advised the Thai government to avoid power plants larger than 300 MW because it would ”result in limited competition and very few bidders”.  In its 1994 report on Thailand’s electricity sector, the World Bank noted that ”recent technological changes have substantially eliminated the traditional cost advantages of very large generating plants”. To its credit, Egat has allowed some of the country’s largest industrial power consumers to invest in and build their own co-generation plants, fuelled with natural gas or biomass fuels made from agricultural waste.

Every industrial estate in the country now has at least one new co-generation plant. And dozens of companies with large electricity and heat requirements, such as sugar factories, rice millers, and manufacturers, have been able to lower their operating costs and supplement their income. Alphatec Electronics, for example, invested in a 210-MW combined cycle plant that supplies electricity and steam to its own factory and nearby housing and commercial facilities, and then sells its surplus to Egat. The plant also includes a gas-fired cooling system to produce chilled bottle water as a by-product.

Egat’s limited introduction of small-scale private power plants has demonstrated the huge potential for further decentralised generation in Thailand. The only catch is that Egat has become so perverse after years of reckless spending, over-expansion and environmental irresponsibility that it sees cleaner, cheaper power as a threat. Egat plans to take on roughly $1 billion in new debt annually to build more oversized power plants that consumers don’t need and can’t afford.  Despite the collapse in electricity demand since 1997, the utility remains committed to buying power from two massive coal-fired plants (700 MW and 1,400 MW) in Prachuap Khiri Khan. To maintain its monopoly supplier status and its overstaffed workforce, Egat is willing to defy public opposition and destroy the livelihoods of fishers, farmers and small business owners in Prachuap Khiri Khan, while forcing higher rates on all consumers, along with polluting coal power. The prudent alternative would be to break Egat’s monopoly, terminate Egat’s large power purchase contracts, and open the electricity sector to competition once and for all.