Watershed
March 1, 2002

A public debate on the future of electricity in Thailand demands more accountability and vision from the country’s power monopolies.

For more than 30 years, the Electricity Generating Authority of Thailand (EGAT) has monopolized all aspects of electricity supply in Thailand. Since 1986, EGAT and the National Energy Policy Office (NEPO) have issued warnings of “black-outs” if their plans for electricity-generating projects faced public opposition. Watershed reports on two public seminars in which the Thai public outline their demands for EGAT and NEPO to become more accountable for their past mistakes and to change their vision for the future of the Thai electricity system.

Academics, artists, and activists are joining hands with village people in Thailand to question and challenge the conventional wisdom of the policymakers and planners who design and run the Thai electricity system.

Thailand’s electricity system has been one of the major causes of social and environmental problems in the country. Thousands of village people have been uprooted or lost their livelihoods to hydroelectric dams, massive coal-fired power plants, pipelines for the transportation of natural gas and other energy-related projects.

Meanwhile, excessive and often unnecessary investment in new power plants is posing a huge economic burden for the Thai government, taxpayers and consumers of electricity.

In the last few years, the Thai public is increasingly raising questions about the decisions made by the Thai government over energy use and demand as well as viable alternatives to conventional energy sources. Every week, newspapers, television and radio cover stories that challenge the status quo: from the resistance of village people to projects; to senate inquiries over the contracts signed in secret between private developers of power plants and government energy agencies; to requests from groups of academics or artists for the government to respect the rights of village people.

In March 2002, the nongovernmental organization (NGO) Sustainable Energy Network Thailand (SENT) organized the forum Thai Energy System: People’s Perspectives for a public debate on electricity. Anan Pongpattanasakun, a local leader opposed to the proposed coal-fired power plant at the village of Bo Nok in the southern Thai province of Prachuab Khiri Khan opened the seminar. Anan stated that the lack of policy on clean energy is “because no politicians are involved in the clean energy industry.”

“A Seven-Eleven can pop up anywhere in Thailand but small businesses or communities cannot build small clean energy plants because the government monopolises the energy sector,” said Anan.

The seminar this year was a follow-up to the International Conference on Energy Sector in Transition: Asian Perspective for Sustainable Energy Development organizedd by the Thai-Danish Cooperation on Sustainable Energy Project. Held in Ubon Ratchathani province of northeastern Thailand in October 2000, the conference opened with the warning by Charnchai Limpiyakorn, one of the organizers, that, “Among the prime factors affecting the opening up of the country to the world market and open competition, are energy and natural resources . . . ignorance on the part of the government results in confrontation and conflict between the government and the people, which is not easy to resolve.”

The analysis at the 2000 conference of Dr. Niran Pitakwatchara, a Senator representing Ubon Ratchathani province, remains as true today as then: “The concept of energy development has evolved to serve capitalism and a materialistic economic system by focusing on technology, industry and urban communities, based in turn on the destruction of natural resources and the environment during periods of both prosperity or recession.”

According to Senator Niran, out of the centralisation of state power and control over both natural resources and the mediation of conflict there arise “a number of problems regarding private property, the quality of individual life, public property, society, culture, the way of life of the community and, finally, crises for the needy, poor and marginalised communities in society.”

Public electricity but no public power

For more than 30 years, the Electricity Generating Authority of Thailand (EGAT) has monopolised all aspects of electricity supply in Thailand. Until 1986, there was no formal entity to directly regulate EGAT, which had been given significant independence by the government to plan, invest, build and operate power generation facilities. After the National Energy Policy Office (NEPO) was established in 1986, the two agencies have together expanded their control, issuing warnings of “black-outs” if their plans for power projects faced public opposition. The Power Development Plan that “guides” EGAT’s investments is based on spurious “forecasting” conducted by a committee comprising EGAT, NEPO and the two agencies responsible for electricity distribution.

EGAT’s development of hydroelectric dams in Thailand has caused serious environmental damage in most of Thailand’s river basins. According to Detcharat Sukkamnoed, who heads SENT, “about one million rai [160,000 hectares] of rain forest has been destroyed by large hydropower plants . . . almost 20,000 local households have been moved from their homelands.”

Detcharat blames the D-A-D (Decide-Announce-Defend) approach of project implementation by EGAT and the Thai government and the absence of effective public participation processes for continuing public opposition to large-scale projects such as the Pak Mun dam and the proposed Thai-Malaysian gas pipeline in southern Thailand and two coal-fired power plants in Prachuab Khiri Khan province.

In June 1991, Chartanga Moreechart, Deputy Governor of Ubon Ratchathani province, told Mun River village people whose lands were to be flooded and whose fisheries were to be destroyed by the Pak Mun dam, “You people should be proud and happy that you have sacrificed your beloved land for the good of the majority.” In May 2000, when excess, unused electricity stood at more than 5,000 megawatts (MW) (and total installed capacity was more than 21,000 MW) the Thai government stubbornly denied the request of local people and refused to open the water gates of the Pak Mun dam. The dam’s installed capacity was only 136 MW. The local communities hoped that their fisheries might recover if the gates of the dam were opened to allow for the migration of fish during the rainy season. The government finally agreed to open the gates but has not decided the long-term future for the dam and the local communities living along the Mun River.

“NEPO focuses on the peak demand forecast, which NEPO forecasts with reasonable accuracy. But the rest of the year, NEPO’s forecasts are way off,” says Prasat Meetam, an academic with the Prince of Songkla University. As the annual peak only lasts a few hours in one day in the year, “If we could reduce the annual peak consumption and the daily afternoon peak, then there is no need to build any more power plants.”

Senator Sopon Supapong, member of the Government Committee on Public Participation, suggests that for the peak hours each year, “What about the government buying electricity from the private businesses (like hotels) that have their own electricity generators in case of blackouts? Even paying them 5 baht [12 US cents] per kWh [kilowatt hour] the country could save enormous amounts of money as there would be no need for new power plants.”

Piyasawasti Amranand, Secretary-General of NEPO and Chairperson of the Programme Steering Committee of the Thai-Danish Cooperation on Sustainable Energy, believes sustainable energy is important for Thailand but that, “Large-scale power plants or EGAT will still be in control.” According to Piyasawasti, failure to increase the development of sustainable energy systems is not due to lack of money: “The main reason is that not enough people are interested in making this come true.”

Contradictions in the energy policy of Thailand are causing conflict. NEPO urges for increased use of imported coal as a fuel type to reduce the dominance of natural gas, currently accounting for 71 per cent of total capacity. Meanwhile, the Thai government plans to open more domestic coal mines in northern Thailand despite unresolved adverse impacts of the existing Mae Moh mine and power plant in Lampang province, northern Thailand. NEPO is also keen for Thailand to increase purchases of electricity from neighbouring or nearby countries.

While NEPO says new coal-fired power projects are “essential” to maintain a “safe” power reserve (amount of electricity in excess of peak demand), renewable projects have been cancelled due to “over-capacity” and the government has cut the budget for demand-side management.

Senator Sopon warns that “the energy policy influenced by politicians and businessmen have caused huge problems for Thai people. There are alternatives, there is no need to build the coal power plants in Prachuab. No new power plants are needed for another five to ten years. Vested interest is the main problem.”

Anan Pongpattanasakun is critical that the government is only interested in the formal sector so that all the government sees for Prachuab Khiri Khan province is large-scale industry fuelled by fossil fuels.

“Many households in Prachuab Khiri Khan make enough money from small-scale shrimp paste to send their children to university. But the government is not interested in this as an economy. . . . The villagers are preparing now to fight to the end. We want to get toether a new vision for the energy sector that the government must listen to.”

Privatization: Will this be the solution?

Since 1992, the Thai government, EGAT and NEPO have initiated a series of policy reforms to restructure the electricity system to open it to private electricity-generation companies.

One such initiative is the ‘power pool,’ designed to encourage competition among private power producers while maximizing the benefit to consumers through the model of the ‘free market.’ The system proposed by NEPO faces opposition from academics, people’s organizations and consumer organizations who question whether the new system would really get rid of the monopoly in the system or just replace the state monopoly with new private monopolists. Similar systems in other countries have had mixed results (see box: Privatization of electricity sector: Experience in the United Kingdom and Canada).

In this, the new system would be no different to the existing situation in which the Power Development Plan is developed with no public input, being exclusive to the technocrats and unaccountable to the public. According to Detcharat, “The Thai government is keen to speed up the process of privatization of the power sector due to high external debt and low liquidity in the financial and fiscal systems. The power pool, which would see private power producers compete in a market to sell electricity on an hourly basis, has been developed with no public participation.”

“Leading international development agencies, like the World Bank and the Asian Development Bank are still promoting the market mechanism as the main way in allocating resources in the energy sector,” says Detcharat, “but they also determine the steps towards privatization and this limits public participation.”

For example, although Denmark is well known for its progressive energy policy and strong civil society, the 1999 government mission team of DANCED, the Danish Cooperation for Environment and Development, to Thailand mainly relied on collaboration with the Thai government agencies rather than with NGOs and local people’s organizations.

Dr. Wutipong Priabjariyawat of the independent Millenium Institute warns that, “The power pool will not break up the monopolies, that is not its purpose. The power pool is to transfer the monopolistic enterprise to independent power producer (IPP) capitalists. There are seven IPPs, but there are 13 million customers of electricity in Thailand. And yet who has the greater bargaining power with the government? The IPPs exploit consumers.”

“In the IPP contracts, the government and the public are at a disadvantage. Who should pay for the risks and for the impacts? Asks Witoon Permpongsacharoen, member of the National Economic and Social Advisory Council. “We want change” says Witoon, “but what do we want? The government says that with many producers there will be competition. But if we listen to the experience in the UK, it was not competition that made it succeed, but the government regulations. The key factor is the guarantee of our rights to benefit from privatization. It is about the strength of civil society, not about technology.”

Public priorities

The energy sector is a threat to human health, especially from pollution from fossil-fuelled power plants. Says Detcharat, “Nobody should have to sacrifice their health for the benefit of another person, for the benefit of economic growth. We need to change the framework of EIAs [environmental impact assessments] as people do not figure in the analysis. Health is life, not illnesses that have to be proven. People can identify what type of health system and society they want. At the moment the system is a risk assessment. For the Thai-Malaysian pipeline the risk assessment says the risk is not much more than driving a car. But what does this mean? This fails to look at and to assess altneratives to the proposed development.

“Where is the room for small projects supervised by a community? Large-scale projects can be attacked on the basis of their negative health impacts as they affect employment and the economy. If you look at the Mae Moh coal-fired power plant, it is a project that generates electricity with the highest impacts on health but the lowest ‘traditional’ economic cost [price for fuel].”

“Mae Moh is possibly the most polluted area in Thailand,” says Mr. Seesakade Saman, a local village person from Mae Moh valley, “Thousands of people suffer from respiratory problems. Agriculture is affected with decreased production and it is dangerous to eat vegetables from the valley because of coal dust and acid rain. People are dying. People are stressed. Everyday village people go to the hospital because of problems from the power plant pollution, especially in winter. EGAT advertises that it has a machine to capture sulphur dioxide and they claim they catch about 98 per cent of it. But this is a lie.”

Public hearings and participation

The Thai constitution of 1997 calls for public hearings to be held for state projects that affect local people. While public hearings have taken place for the two coal-fired power plants proposed for Prachuab Khiri Khan province and for the Thai-Malaysian gas pipeline, there has been little to show that the formal hearings effectively increase public participation. Local people have boycotted the hearings since they were held after the government had approved the projects.

Local people also question the accuracy of EIAs, which are conducted by consultant firms hired by project developers. Conflict has been increased by the lack of local consultation and participation. The public has never had an opportunity to comment on energy policies and plans, initiation, assessment and implementation of projects, and decisions on the amount charged for electricity.

Ittaboon Onwongsa, of the Foundation for Consumers, an NGO that monitors the cost of electricity for consumers asserts that, “The smallest of consumers together consume the most electricity in Thailand and are most affected by the cost of electricity. There are 12 million households and 1 million sites in the industrial sector. The government thinks that small consumers do not understand the difficulties in electricity pricing. But the information and decisions belong to the people.”

In finding solutions to the problems created by the Thai energy system, Senator Niran proposes that policies need to be developed that “offer a wider range of alternatives for the people, rather than restricting choices, and which emphasize greater stability in the community, which should not be sacrificed to the stability given to investors, electricity systems or even the economy.”

According to a 1993 World Bank report, Thailand Fuel Option Study, Thailand can potentially save 2,000 to 3,000 MW from the implementation of a demand-side management program. Combined with the installation of new renewable energy power plants and the decommissioning of the power plants with high environmental and social impacts, Detcharat sees demand-side management assisting to build a future with less pollution and less social unrest.

“The technical potential of biomass in agro-industrial factories is as high as 7,000 MW,” says Detcharat. According to a 1998 report for NEPO and DANCED on pricing incentives for renewable energy, 3,000 MW of this is economically feasible. However, today only about 400 MW (as of 2000, this includes small private power plants not connected to the central grid) is generated from biomass “due to the unsuitable pricing system.” According to Detcharat, biogas technology is also “highly possible” in Thailand. Not only does it result in the production of electricity but it can reduce pollution from pig farms and agro-industrial factories. Detcharat estimates the potential for biogas to be 500 gigawatt (1,000 million) hours (Gwh) of electricity every year (approximately 0.5 per cent of total electricity volume in 2001).

But, says Detcharat, “leading international development agencies have much more influence in policy formulation than Thai civil society.” International collaboration in the energy system in Thailand has been based on relationships between governments and the private sector, with no public input. Detcharat asserts that international collaboration has paid attention to the economic aspects of the system while ignoring environmental and social issues; focused on directions set by the heavily industrialized countries; and promoted fossil fuel technologies, which are often considered to be obsolete by societies in the heavily industrialized countries.

Power for the people

Much of the environmental and social problems caused by the Thai electricity system come from the undemocratic and nontransparent energy forecasting system used by NEPO and EGAT. Although NEPO publicly admits its forecasting is often inaccurate, the government continues to approve new electricity-generating projects based on NEPO’s guesswork.

“It is possible to do a back-casting rather than a forecasting,” Detcharat says, “What this involves is that we look at what we want in 20 years time for health and energy and other social systems and then we look back to today to see how we can get there.”

Rather than focussing solely on technical “solutions” to the technical question of future electricity demand and supply, back-casting requires democratic processes that incorporate the social perspective of electricity.

Rather than domination by government and private companies, the diversity of voices that make up Thai civil society should ultimately decide on the future of power projects. As a starting point, the government, at all levels, could properly implement the 1997 constitution and accept that community-based decision-making must guide government decisions. Choice of technology could be based on local resources and knowledge as well as an assessment of the effects on social, economic and environmental aspects of the project. International collaboration could assist with equitable assessments of environmental and social issues.

The future does not have to be more large-scale coal-fired power plants and hydroelectric dams. The future does not have to be one in which the government locks itself into a Decide-Announce-Defend strategy that provokes opposition by local communities to large, dirty, unnecessary electricity-generating projects. Thai society, village people and city-dwellers, cannot allow the future to be more of the same.