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A Nam Theun 2 proponent responds to critics

Ian C. Porter
Bangkok Post
March 26, 2005

“Based on in-depth and detailed [World Bank] analyses . . . we are confident that Nam Theun 2 will be a benefit and not a burden to Thai consumers.”

Letter to the Editor

I am writing to correct a number of inaccuracies concerning the
World Bank, which Khun Witoon Permponsacharoen perpetuates in an op-ed
on the proposed Nam Theun 2 project published in your newspaper on
March 15, 2005.

First, with regard to the benefits of the Nam Theun 2 project to Thai consumers, the World Bank has commissioned in-depth financial and economic analyses for the project. The preliminary results of these analyses were publicly disclosed in August 2004. The
final analyses which have undergone intensive review by World Bank experts and which were made public in March 2005, clearly demonstrate that at about 4 US cents per kilowatt hour, beginning in 2010, Nam Thuen 2 power would be the least-cost source of power generation for Thailand. These analyses take account of the potential of both
demand-side management and renewable energy based on a separate study commissioned by the World Bank, which will be posted on our website in the coming days. The next best alternative in Thailand that would compete commercially with Nam Theun 2 is combined cycle gas turbines (CCGT), whose price is subject to oil price volatility.

As for the power demand forecasts on which Egat’s power development plans are
based, Thailand has one of the region’s most comprehensive demand-forecasting systems, overseen by a multi-stakeholder committee.

When Nam Theun 2 is commissioned in 2010, electricity demand in Thailand is expected to be growing at the rate of about 1,500 to 2,000 megawatts a year. Even if there were much greater-than- assumed potential for demand side management (and energy conservation measures) and employment of renewable energy, the optimal date for commissioning Nam Theun 2 power could, at best, be delayed by only about a year. This
distant possibility should be weighed against the costs to Thailand of increased likelihood of brownouts for failing to provide for future energy needs based on an overly optimistic assumption of reduction in demand due to conservation and renewable energy options.

Second, with regard to Khun Witoon’s comments on information disclosure, we find
disingenuous his suggestion that the World Bank has sought to suppress critical information regarding the Nam Theun 2 project from Thai stakeholders. The World Bank has consistently disclosed project-related information on its website  www.worldbank.org/laont2 and organised two well-attended workshops in Bangkok to discuss key issues related to Nam Theun 2. At the first of these, the time-limit on
interventions was waived to allow Khun Witoon the opportunity to present his altemative economic analysis at length. The second workshop was specifically to discuss the economic analysis for the project, which he declined to attend. In conclusion, and based on in-depth and detailed analyses which we have posted on our web-site, we are confident that Nam Theun 2 will be a benefit and not a burden to Thai consumers.

IAN C. PORTER Country Director, Southeast Asia, East Asia and Pacific Region

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