Power producers call for deeper cut in reliance on natural gas

       Energy business operators say the use of natural gas for electricity generation should be cut even lower than the 60%planned under the revised power development plan (PDP), saying the risk of dependence on gas is still too high.
       Policymakers' plans to revise down natural gas use in the power sector to 60% from the current 74% are still not enough to limit the risk of blackouts in the future, said Suvit Limvattanakul,chairman of the Power Producer Industry Club of the Federation of Thai Industries.
       In addition to reducing gas usage,the 15-year PDP ending in 2022 aims to maintain lignite and imported coal usage at 20-21% and increase hydropower purchases from neighbouring countries to 10% from 1%. Nuclear power would account for 5% of the total.
       "They should have cut natural gas more to as low as 50% to assure our power users that serious disruptions will not happen. Power blackouts are one of the major concerns - once one happens it causes very severe damage," he said.
       A gas pipeline leak in Kanchanaburi last month resulted in blackouts and also forced the Electricity Generating Authority of Thailand to lift output from a hydroelectric plant, which resulted in flooding in nearby communities.
       Mr Suwit said rising gas prices were another risk for Thailand.
       "You can see the prices of imported gas from Burma and liquefied natural gas from Qatar are both higher than gas from the Gulf of Thailand by 20% and 40%, respectively. We have less bargaining power than suppliers if we still depend on them too much and we are even more disadvantaged," he said.
       Manoon Siriwan, an independent energy expert, agreed that fuel usage should be adjusted as Thailand's proven gas reserves are very limited, expected to serve domestic demand only for another seven years.
       Power producers will need to import more natural gas unless the country discovers more reserves.
       "In the long term, energy policymakers should rethink importing gas only. Coal and nuclear fuels should be taken into consideration. In doing so, fuel costs can be better balanced," said Mr Manoon.
       In Malaysia, for instance, gas reserves are high but gas accounts for just 45% of power generation. The country imports high volumes of lower-priced coal while exporting gas at good prices instead.Malaysia is also studying nuclear power plants, said Mr Manoon.
       Indonesia, on the other hand, is an example of a poor fuel mix. It has large crude reserves but subsidises oil for domestic consumption and became a net importer last year.
       Wirash Kanchanapibul, an Egat deputy governor, admitted that Thailand's fuel usage needs to be better balanced, saying that in developed countries, different types of fuel have been used in almost equal amounts.
       "We also cannot guarantee that the gas shortage that happened last month will not happen again," he said.
       "To tackle the immediate crisis, we may cut power transmission in some areas to save fuel supplies for the areas where shortages exist."