"Siri" Halts Construction of Southern Coal Power Plant, Redirects Plans to Eastern Economic Corridor, Opening Competition for Private Sector, Favoring "EGCO-BLCP-Gulf" with Ready Locations, While "Pornchai" Supports Gas Use Without High Electricity Costs

          Minister of Energy, Mr. Siri Jirapongphan, revealed that he has assigned the Electricity Generating Authority of Thailand (EGAT) to review the construction of the power plant in the south without specifying the fuel type, with results expected within two weeks. He acknowledged that the construction of coal power plants is necessary according to the Power Development Plan (PDP), which requires a diversification of fuel sources including natural gas and coal. However, there are various perspectives, such as the belief that in the long term, coal will become cheaper if its proportion in electricity generation is at an appropriate level to prevent shortages in case of LNG issues or conflicts, thus reducing reliance on gas for electricity generation.

Minister of Energy, Mr. Siri Jirapongphan

          The construction of the power plant in the south does not necessarily mean that the coal power plant must be located in the southern region; it may switch to using natural gas or LNG instead. The coal power plant could be located in Rayong, Chonburi, or Chachoengsao, which are part of the Eastern Economic Corridor (EEC). There may be opportunities for private companies and EGAT to bid competitively.

          As for the fuel proportions in electricity generation according to the new PDP, this cannot yet be specified as clarity on the PDP is awaited. However, the key concern is whether electricity costs in the future will not be excessively high compared to the previous plan, which set the price at 5.5 baht per unit.

          Regarding the promotion of renewable energy, it is suggested that the fuel quota system should be abolished. Currently, the Ministry of Energy sets targets for electricity purchases from each type of renewable energy. Increased competition will lead to lower costs, as seen in the case of the Energy Regulatory Commission (ERC) opening bids for electricity purchases from the SPP Hybrid Firm project, totaling 300 megawatts, which resulted in significantly lower electricity prices, dropping by up to 99.99% to a range of 1.80-3 baht per unit, cheaper than the national average of about 3.5 baht per unit.

"If the Prime Minister's goal of increasing renewable energy to 40% is achievable, the Ministry of Energy is ready to support it, but it must not impact electricity costs. If competition increases and the quota system is abolished, it will be a starting point for moving forward. The important thing is how to reduce electricity costs,"

          Mr. Pornchai Rujiprapa, Chairman of the Energy Reform Committee, stated that the committee will discuss with the Department of Energy Business (DEB) about the distribution of fuel for electricity generation according to the new PDP. They are not concerned about whether the fuel should be gas or coal, but rather any fuel that benefits the country. Meanwhile, there are reports about the new Energy Minister's stance favoring LNG over coal, as transportation is now similar to coal, unlike before when it had to be transported solely through pipelines. However, if LNG is used, it must be ensured that electricity costs do not increase, as a $1 rise in LNG prices would impact electricity costs by 20 satang per unit.

          "There will be discussions with the DEB alongside a feasibility study of fuel for electricity generation. We have a clear policy to reduce gas transported through pipelines, but as conditions change, the PDP should be adjusted accordingly. The pros and cons of LNG and coal differ, and discussions about where to build coal power plants will continue with the DEB."

          Mr. Rawi Kosiri, a director of BLCP Power Co., Ltd., stated that the BLCP power plant is ready if the government opens bids for electricity purchases from coal power plants in Rayong, as there is still space to expand Phase 2 by another 1,000 megawatts, and it has already passed the Environmental and Health Impact Assessment (EHIA).

          Regarding the cost of electricity generation from coal, it can definitely compete with LNG, as LNG procurement involves longer transportation distances and multiple processes before it can be used in power plants. In contrast, while the availability of LNG sources is increasing, coal can also be sourced from various locations and has significant global reserves.

          Sources from the Ministry of Energy revealed that besides the BLCP power plant being ready for coal power plant construction, there are other areas with potential for coal power plant construction, such as the original site of the Rayong power plant of EGCO Public Company Limited and in Bang Khla district, Chachoengsao province, of Gulf Group, among others.