Energy inequity making Thailand’s national development unsustainable

Prasart Meetam and Suntaree Kiatiprajuk
The Social Agenda Working Group

Thailand’s approval of the Power Development Plan (PDP 2010-2030) will not only promote energy inequality among its people and burden the poor with heavy environmental costs of power plants, coal plants and even nuclear reactors, but also undermine most of the MDGs’ achievements the country claimed to have already made long before 2015. Academics, civil society and local community organizations are expressing their opposition to the approved plan, proposing a new PDP based on a holistic approach to energy planning, and urging the country to move from heavy reliance on fossil fuels, use energy more efficiently, and convert to renewable energy sources for the interests of the majority Thai people.

Energy is globally recognized as central to the issues of development, global security, environmental protection and sustainability and achieving the Millennium Development Goals (MDGs). developing countries are urged to expand access to reliable and modern energy services if they are to reduce poverty and improve the health of their citizens. The UN even declared 2012 as the International Year of Sustainable Energy for All. But current energy systems are seen as inadequate to meet the needs of the poor and are jeopardizing the sustainable achievement of the MDGs.

Thailand’s Eleventh National Economic and Social Development Plan (2012-2016) states that “The issue of energy security is vital, and requires that more clean energy be used and alternative energy sources be developed, leading to overall improvement in energy efficiency.” In principle, this may be considered the national development direction. But in practice this is not the case , the country’s latest PDP (2010-2030), formulated mainly by the Electricity Generating Authority of Thailand (EGAT) and influenced heavily by the demands of such industries as automobile and smelting will direct the country’s national development plan for the next 20 years. Under this latest PDP, Thailand will have an annual spending of about 200 billion Baht (USD 6,510.41 million/USD 1 = 30.72 Baht) for power plants construction. Moreover, Thailand’s electricity generation sector is a monopoly business, with absolute ownership of and control over the transmission systems. More importantly, today’s construction of power plants tends to be of large-scale size and these power plants are the largest source of carbon dioxide released into the area around them and the atmosphere. Thus, the construction of new power plants in almost all areas are often opposed by local communities while those existing power stations continue to make negative impacts on the communities’ health and livelihood.

Lack of good governance and public participation

On 6 June 2012, Miss rosana Tositrakul , chair of the Senate’s subcommittee on Good Governance Promotion held a press conference at the press conference room of parliament criticizing the third-revised PDP the Ministry of Energy was about to present to the National Energy Policy Council (NEPC) meeting on 8 June 2012 for contradicting to the government’s previously approved Energy Efficiency Development Plan (2011-2030), lacking active participation of the public, and tending to unreasonably favour natural gas, coal and nuclear power sectors that will impose undue investment burdens on the country whereby the public will be made to shoulder them via electricity rates. Not to mention potential social conflict over the construction of power plants in various areas in the future.

The content of the latest PDP, in Rosana’s view, is incompatible with the cabinet resolution approved on 27 December 2011 to achieve the targeted 96,653 ktoe of energy conservation by 2030. In the draft PDP, such previously-set target was reduced to only 20% of it and that would result in increasing electricity fees of at least 4.56 baht per unit by 2030. In addition, the formulation of the Plan had been hurriedly conducted so that it could be presented to the NEPC meeting by 8 June 2012 and submitted for cabinet approval the following week. The social activist senator suggested that “the Ministry of Energy should suspend its presentation of the PDP to the NEPC for the time being and allow the people to be thoroughly informed and voice their views; otherwise its act may violate the constitution.”

In fact, only one hearing was held in Bangkok on 5 June 2012. Invitation letters were sent to concerned participants five days while relevant information was disclosed only three days in advance of the scheduled date of the hearing. In the southern province of Trang on 7 June 2012, 20 representatives of the People’s Network of Trang held a meeting at the community centre in Kan Tang district, expressing their opposition to the third-revised PDP. Mr Trairong Kuaseng, member of the Network, said, “The Ministry of Energy held only one public hearing for half a day in Bangkok. Its invitation letters were sent on 30 May 2012 with very little information on the draft PDP to be considered in the hearing. This lack of respect for active participation of the people sector could cause greater injustice against consumers as the PDP could lead to the construction of more large-scale power plants and the people will be made to bear the burden of their construction and production costs.”

He also pointed out that if the 80% of the energy conservation previously targeted was not cut from the latest PDP, no coal-fired power plants would be built in Trang and other regions of the country. “Local conflict will be lessened,” he added.

At odds with reality but in alliance with vested interests

In late 2011, the cabinet of prime minister Yingluck Shinawatra government approved the Alternative Energy Development Plan 2012-2021(AEDP) and the Energy Efficiency Development Plan (EEDP). Both Plans show how Thailand could produce more energy from renewable sources, providing as much as 25% of the nation's total energy needs in 2021 and reduce its energy consumption in 2030 by 20%, basically through demand-side management. The EEDP even says that technically it could exceed its targets and achieve even higher efficiencies. This means that the unnecessary annual spending of over 200 billion Baht could be saved while the unnecessary emission of 49 million tonnes of carbon dioxide equivalent per year could be reduced.

But the 20-year-long PDP still predicts a massive hike in electricity demand from 2012’s peak of 26,355 MW to a forecast of 70,847 MW in 2030, which means at least an additional six coal plants, seven natural gas plants, two nuclear power plants and the purchase of power from several controversial dams in neighbouring countries, according to an article written by members of the Thai Working Group for Climate Justices. An assessment by energy analysts Cheunchom and Chris Greacen, published in April 2012 pointed out that multiple revisions of the PDP have had a persistent tendency to overestimate projected demand.

“By selecting excessive amounts of controversial, expensive, risky and polluting power plants, over cheaper, cleaner and safer alternatives,” the report states, “the PDP is at odds with both Thai energy policy as well as the interests of the vast majority of Thai people.”

It is not difficult to see why this recommendation is difficult to swallow for those with a financial stake in energy production in Thailand. Giant energy companies make profits from building new plants and selling more electricity. When the latest PDP was approved, the minister of energy confirmed a new round of bidding for six new power plants, which sent the stock prices of the main three independent power producers in Thailand shooting up. A small elite of Thai businessmen and politicians have an interest in keeping demand for energy production up, even to excessively high levels.

Yingluck’s cabinet, on 19 June 2012, approved this PDP and PTT Public Company Limited, Thailand’s national energy company, was assigned to propose its natural gas supply plan (2012-2030) in line with the PDP and present to the NEPC for further approval. Not surprisingly, PTT reported to the NEPC meeting on 4 October 2012 that to be congruent with the PDP, the country’s overall demands for natural gas for the electricity.In 2007, 49% of electricity was consumed by industrial sector, followed by commercial sector, 25%, and households, 21%. In 2010, the fuels used for electricity generation ranged from natural gas, 71.8%; coal, 17.6 and renewables, 6.3 (hydropower 4.8% and others,1.5%/the ministry of Energy categorized hydropower as renewable), industrial and transportation sectors would increase from 4,167 million cubic feet per day in 2011 to 5,331 million cubic feet per day in 2016, an average increase of 5.1% annually. In the long term, the demand could increase to 6,999 million cubic feet per day in 2030. And also the retail price of electricity fee will become at 4.95 baht per kWh, which is still within the range of 4.47-5.0 baht per kWh anticipated by the Energy Regulatory Commission. No sooner had the PTT proposed plan been approved than this energy company was also given the go-ahead by the Ministry of Energy to build its second phase of a liquefied natural gas (LNG) receiving terminal worth USD 698 million for the two million tonnes of LNG the company was also authorized to buy from Qatar Liquefied Gas Company Limited for 20 years starting from 2015.

Two very influential organizations involving in Thailand’s energy sector are PTT and EGAT. Both of them are state enterprises whereby the Ministry of Finance has 51% and 100%, respectively, shareholding in them. But when these organizations established their subsidiaries and affiliates (about 100 of them), the status of state enterprises will be maintained only if their parent organizations have no less than 66.67% in those subsidiaries. Otherwise, they are private companies. But the subsidiaries of PTT and EGAT can have the best of both worlds. As state enterprises, they can have access to loans from various sources with the Ministry of Finance as their guarantor. When they are prosecuted, the General Attorney will represent them in court and the Council of State Office will give them advice if they have any legal problems. As private companies, they are not subject to the rule and regulations of the Ministry of Finance but entitled to privileges given by the Board of Investment. It is interesting to note that the three electricity state enterprises – EGAT, Metropolitan Electricity Authority, and Provincial Electricity Authority – employ about 100,000 employees or not more than 110,000 workers if the employees of private power producers are included. But these 110,000 workers take part in producing around 500 billion Baht (USD 16,276.04 million/USD 1 = 30.72 Baht) of the country’s GDP. It means that Thailand’s substantial income concentrates on this electricity sector, this is of course an origin of inequity.

At the same time, high-ranking officials of the Ministry of Energy that are responsible for designating and supervising energy policies for the interests of the people are appointed by the government or those state enterprises as committee members to oversee the policies of such companies or energy businesses. These officials are given huge benefits, 10 times higher than the amount given by the civil service system. Therefore, it is very difficult to expect these officials to protect the people’s interests.

Opposition and complaints falling on deaf ears

Existing power plants are inflicting adverse impact on local people’s health and environment while many current plans for new power plants, especially the most polluting, are proposed in environmentally-sensitive locations, in particular along the southern coastline and next to major rivers, threatening the livelihoods of countless communities and sparking vehement public opposition. Not to mention huge environmental, social and economic costs to be created.

One latest case in point is the protest of the Network of Small-scale Fisherfolk of Tha Sala district of the southern province of Nakhon Si thammarat. On 22 November 2012, representatives of the Network submitted their letter opposing the approval given by Office of Natural Resources and Environmental Policy and Planning’s (ONEP) panel of experts to the final environmental and health impact assessment (EHIA) of the deep-sea port and chemical storage site to be built by Chevron Thailand Exploration and Production, reported Woralak Sriyai of the Thailand Information Center for Civil Rights and Investigative Journalism. Representatives of the Network pointed out, in their letter, that the approved EHIA report was flawed in terms of local facts and information: the selection of the project site did not include local people’s participation; the scope of the assessment did not include the areas and people to be actually affected by the project; and the operation of the project will have negative impacts on Tha Sala’s marine ecosystem and coastal areas, which is one of Thailand’s fishery sources and plays a very critical role in fishing communities, but the issue was not mentioned in the EHIA report.

“We can make money from selling fish - at least 1,000 Baht a day, especially in November. We could make money up to 10,000 Baht a day if we get mantis shrimp in Golden Bay,” said Mu Toh-Intae, one of the fisherfolk living off Golden Bay off Tha Sa La, on the edge of the Gulf of Thailand. That was why Mu and his fisher friends said they were really worried that the construction would create huge impact on their marine resources and their fisher’s way of life would be totally destroyed by the port construction and related development.

In fact, the EHIA report is said to cover only a 5-kilometre radius of the construction site when in reality at least 10,000 fisherfolk living outside that area will be affected, according to Somporn Pengkam, the National Health Commission's HIA coordinating unit director. Somporn added that the ONEP expert panel had been studying this report since 2010 before approving it on 11 September 2012 but what the local fisherfolk and villagers wanted to know was the exact criteria used by the panel. Both the villagers to be affected and the NHC believe activities related to the deep-sea port and construction of the chemical storage site would affect marine life as well as the livelihoods of local fisherfolk.

Piyanant Sophonthanaporn, director of ONEP's Environmental Impact Assessment Bureau, said the expert panel had approved this EHIA report because Chevron had taken additional measures to mitigate the impacts after the panel rejected it seven times. “We have asked ONEP several times for the final EHIA report so we can see for ourselves what measures will be taken. However, we were always refused," said Somporn.

Renewable energy development is more sustainable

To avoid being tragically caught in the energy trap set up in the 20-year-long PDP, now is the time Thai society and its individual members took renewable energy seriously. A number of people have already realized how inexhaustible, cheap, and sustainable renewable energy is and shifted to it. The problem is how to make those who are ignorant of the sustainable benefits of renewable energy better informed, learn their lessons and all together turn to renewable energy.There are concepts and good practices concerning renewable energy development from abroad that can be applied to Thailand. Take Germany’s success in shifting to renewable energy development for example. Dr Hermann Scheer – German parliamentarian for 30 years, environmentalist, and economist – named by Time magazine as “Hero for the Green Century” as saying in his interview: “The sun offers to our globe, in eight minutes, as much energy as the annual consumption of fossil and atomic energy is. That means the doubting if there would be enough renewable energy for the replacement of nuclear and fossil energies is ridiculous. There is by far enough.”

In addition, the details contained in Thailand’s already approved AEDP, the EEDP as well as the recommendations made by the Greacens’ report all point to the country’s possibility and availability of approaches to renewable energy development that could lead to sustainable development where the social and economic welfare and quality of life of the majority people can be improved.

However, if the actual performances so far of the current administration are anything to go by, the call for the government to adopt a more holistic approach to energy planning by shifting to renewable energy development will be ignored. So the mobilization of the wider Thai society and individuals is the most important thing, as pointed out by Dr Scheer: “as soon as the society, most people, have recognized that the alternative are renewable energies and we must not wait for others, we can do it by our own, in our own sphere, together in cooperatives or in the cities or individually. As soon as they recognize this, they will become supporters.” And such realization should come in time.

Otherwise several MDGs, including eradicating poverty and hunger , providing all children with primary education, promoting gender equality, halting the spread of AIDS, reducing the proportion of people without sustainable access to safe drinking water and sanitation, elevating the quality of life of slum-dwellers, and being in development partnership with global community, Thailand claimed to have achieved long before 2015 could be back to square one. And environmental sustainability the MDG Thailand has never achieved will be like looking for a needle in a haystack.

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