Some media agencies have presented last week a research of the University of Hong Kong named ‘Circuits of power: Environmental injustice from Bangkok’s shopping malls to Laos’ hydropower dams’ which illustrated the prosperity of Bangkok with many giant shopping malls and enormous electricity consumption of city people who might not even care of where such electricity comes from as well as to whom and what impact it causes. This research pointed out that Thailand’s electricity security is the import of electricity from neighboring countries, one of the main sources is hydropower dam in Laos where foreign investors, Thai in particular, are developers.
Of course, as no one can see the figure of electricity on their household electric meters or even in a monthly electricity bill, it is not explained where such electricity comes from and the electricity itself is probably unable to tell when entering the power grid system of various responsible state enterprises. The said research of the University of Hong Kong has helped us realize how the electricity we consume affects the environment and other people’s livelihoods as nothing is free.
Apart from the cost of resources and environment as well as people’s lives, electricity bill may be the most relevant issue making us, Thai electricity consumers, better understand the situation. And if we had not seriously read the Power Development Plan (PDP), we would not know that Thailand actually does not need to import electricity or build more power plants since it has a large amount of power reserve in the system.
Excessive power generation capacity reserve and its cost
Project SEVANA South-East Asia and Laos Dam Investment Monitor (LDIM) have organized a discussion panel on 14 July 2020 on the topic ‘Laos’ dams, Thailand’s electricity and the EGAT’s regional role’ lectured by Witoon Permpongsacharoen, director of the Mekong Energy and Ecology Network or MEE Net.
Witoon explained that despite the increased electricity demand, it is literally not necessary for Thai state enterprise like Electricity Generating Authority of Thailand (EGAT) to build more power plants or purchase additional electricity. Considering the report of the Ministry of Energy, it is found that Thailand’s power system currently has bulk of electricity reserve. The MEE Net’s director clearly indicated that the electricity peak demand as of March 2020 reached 30,342 MW which was less than the peak load of 2019 at 32,273 MW. And when comparing with the power generating capacity in the system as of April 2020 at 50,306 MW, there will be 19,964 MW or approximately 65.79% of residual power or backup and Thailand has never had this high reserve margin before. Moreover, Thailand has been having over 40% of electricity in the system for a while, the energy regulatory principles however requires not more than 15% of the backup power in the system.
One of the reasons causing the increase of power reserve from 40% to 60% now is an outbreak of COVID-19 together with the issuance of preventive measures to strictly relieve the spread which require people to work from home; the lower consumption of electricity in the shopping malls, large-scale office buildings, agricultural sector as well as the temporary closure of several industrial areas. Although the household power consumption gets higher, the proportion of off-grid electricity has also increased over the past years. Such off-grid electricity has been generated by more Independent Power Supply (IPS), there were approximately 3% of IPS in 2017; 10% in 2019 and it was predicted that there will be 12% of them by 2021. These IPS are some groups of industrial plants as well as some hotels generating their own power without purchasing from the central through 3 transmission lines (EGAT; PEA and MEA), they can control their power consumption themselves with less impact on the environment. Most of their electricity was generated by solar energy or by using solar cells, selling the excess power to EGAT may get an unworthy return.
It shows that the Power Development Plan (PDP) is inconsistent with the economic realities; the changing of world climate including the ongoing pandemic. Witoon further emphasized that the PDP has always exaggerated the electricity demand forecast and the generating capacity in the form of exponential graph since 1997 or since Tom Yum Kung financial crisis onwards. During these two decades, Thailand and the world have been facing various waves of crisis or disruption such as Hamburger crisis and massive flood crisis, each crisis along with the aforementioned increase of private self-generating proportion brought about the declining economic development and the electricity demand related to the economic growth has then also declined.
“The government agency’s electricity supplier still answers the same question which is the stability of power supply using the same method of acquisition regardless of the always changing world. The PDP should be adjusted according to the actual situation and should also take into account the global changes”, said Witoon.
The electricity demand forecast and the surplus power generation are not consistent with the reality and current crisis. It roughly seems good that Thailand has a large power reserve, but the hidden cost however has happened before obtaining electricity during the promotion of several projects which used to be continuously objected by civil society as well as affected people. The power generating projects pushed by the government and state enterprises are all against the world’s direction of change where many countries are now deactivating their fossil fuel power plants. In the PDP 2018 itself, fossil fuels are still imported and used in electricity production as seen from the efforts to build coal-fired power plants in southern areas and the purchase of coal from Indonesia by Thai state enterprises or private sectors to feed the system. Notwithstanding the additional proportion of renewable energy, Witoon noted that the electricity from dams was also included. This is very sad since the dam projects that the government defined as renewable energy severely affect many people living in the project areas and downstream, especially the dams in Laos as well as those on the Mekong River.
The hidden cost and the (still) invisible responsibility
The Mekong Butterfly’s study report named ‘The Hidden Cost of Hydropower Dams in the Mekong River Basin: 9 Years of Repeated History of Lack of Governance and Accountability’ reveals that pushing of large dam projects on the Mekong resulted in many impacts, the so-called ‘hidden cost’ in particular. This kind of cost was not calculated or even mentioned in feasibility studies and environmental impact assessments of various dam projects such as ecological and environmental costs as well as impact costs on people both inside and outside of the project areas since the impacts of the projects could cover far beyond the project areas. The Xayaburi dam, for example, not only moves the villagers living in the current dam area out and affects the Mekong ecosystem there, it also impacts the Mekong water system; flow and fluctuation as well as the ecosystem and people’s livelihoods downstream of the Mekong basin countries: Thailand; Cambodia and Vietnam. These transboundary impacts are beyond the area of the project’s environmental survey and study, they are as a result not calculated or considered as the impacts that hold the project developer accountable. Moreover, the report also points out that these project developers have concealed such costs under different tactics such as creating a discourse of ‘run-of-river’ dam (for the Xayaburi dam and other upcoming Mekong dams); non-disclosure of feasibility and impact studies and the affected people do not have access to project information and cannot participate in decision making. And importantly, the government’s approval process relied on the international mechanism to legitimize dam projects that is to say the failure of verification procedure of the Mekong River Commission (MRC).
The case of the Xe-Pian Xe-Namnoy dam in Laos is one of the projects that the generated power will also be sent to Thailand’s power system, its commercial operation date was scheduled in 2019. In July 2018, the saddle dam blocking the low gorge was subsided and collapsed causing more than 6,631 Laotians in the Xe-Pian basin area in Attapeu province an over 5,000 cubic meters of flood. According to Lao authority, there were around 70 dead persons and many have disappeared. Apart from the villagers in Attapeu, water from dam also flowed into the Sekong River in Cambodia affecting consequently Cambodian villagers who live near the southern Lao border area. These affected people currently do not receive any full and fair remedies and compensations from the project developer and from Thai banks as project financial lenders yet after 2 years have already passed.
EGAT to become ‘Asian battery shop’
The MEE Net’s director also added that Thailand through EGAT’s movement planned to position itself as ASEAN center or hub in selling electricity or being middleman amongst other countries, that is to say, if Laos is the battery of Asia, Thailand is the battery shop of Asia. Thailand will invest in the construction of power transmission lines connecting to various countries in accordance with the ASEAN Power Grid initiated by the Asian Development Bank (ADB). In the future, the electricity supplied for sale is expected to come from EGAT’s power generation system itself using the excess power reserve as aforementioned.
EGAT’s important step of being electricity supply hub can be seen in the promotion among Laos; Thailand and Malaysia (LTM) on Power Integration Project (PIP) through the multilateral electricity trade framework by transmitting electricity from Laos to Malaysia via Thailand’s transmission lines, it has been piloted since early 2018 and Thailand certainly benefited from ‘Wheeling Charge’. Even though Thailand will merely be the power transmission medium between Laos and Malaysia in this project, but it will also be in the future the seller of the excess power reserve coming from being the (electricity) single buyer from electricity producers or private companies. The electricity obtained will partly come from EGAT’s in-house generation, another significant part will be bought from private companies and imported from abroad. The Power Purchase Agreement (PPA) must be signed in case of EGAT’s electricity dealing with private sectors (or even EGAT’s subsidiaries), it is a bonded agreement holding EGAT as the guarantor of power purchase.
The ‘Take or Pay’ cost
At this point, there must be a doubt of where EGAT’s money for buying electricity comes from, the money of course is from Thai people who pay their electricity bills to EGAT. Such power purchase guarantee is therefore to ensure the profits of private companies or even the companies in which EGAT takes part via its subsidiaries as a joint venture in several dam or power plant projects (for example, the Electricity Generating PCL (EGCO) has 12.5% of shares in Xayaburi Power Company Limited in Xayaburi Hydropower project; EGAT through EGAT International Company Limited (EGATi) holds 30% of shares in Nam Ngiep 1 Power Company Limited and EGAT through Ratchaburi Electricity Generating Holding PCL (RATCH) has 25% of shares in Xe-Pian Xe-Namnoy Power Company Limited developing Xe-Pian Xe-Namnoy project). This also guarantees the loan payments that these companies got from various banks in order to operate such power generation projects like Xayaburi dam; Xe-Pian Xe-Namnoy dam as well as other Mekong dams. This kind of bonded contract is called ‘Take or Pay’, in other words, in spite of the fact that people do not consume such electricity or the power generation is not at its full capacity or even the dams get damaged or collapsed and the project developer is unable to supply electricity to EGAT, EGAT (actually meaning us, the people) needs to pay for it anyway. It is perhaps not directly revealed in the electricity bill, but appears as ‘Fuel Adjustment Charge’ or FT (formerly called ‘Float Time’) which is the uncontrollable power generating costs, namely the cost of fuels for power generation as well as the cost of purchasing electricity from private producers and neighboring countries.
The FT appeared on our bills might not be high, only few extra satang added per household but it is a huge amount looking at the national level. This is nonetheless incomparable with the values and cost of damages towards ecosystem; environment as well as many more people who have already been affected and will get affected in the future by the following waves of the Mekong River dam projects. The power bills must be increased and will be used for ensuring profits of the electricity supplier. Even though we do not consume (for whatever reason) that part of electricity, we are forced to pay.