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dam-l EGAT to postpone power buys

                      Publication: The Nation 

                                              Section: Business 



   Egat to postpone power buys 

   THE Electricity Generating Authority of Thailand (Egat) has decided to
postpone power purchases from
   Laos' six major power projects with a combined capacity of 2,963
megawatts by at least one year from
   the original schedule of 2006. 

   This follows a significant downward revision of Thailand's power demand
projections. 

   According to the latest revised power development plan (PDP) for
1998-2001, Egat's 1998 power
   production will decline 4.96 per cent from the PDP of September 1997.
Its 1999 projected production is
   down 9.22 per cent from the earlier PDP while projections from the year
2000 to 2006 are down 13-18
   per cent from earlier estimates. 

   As a result, Chalermchai Ratnarak, assistant governor for power
purchases, said over the weekend
   Egat would have to delay power purchases from Laos. He added that Egat's
power reserve projected
   for 2001 to 2006 will be much higher than basic requirements. 

   According to the latest projections of the PDP for 1998-2001, the power
reserve will be 56.74 per cent
   in 2001, 51.52 per cent in 2002, 57.48 per cent in 2003, 61.2 per cent
in 2004, 50.14 per cent in 2005
   and 46.17 per cent in 2006. 

   According to Egat, its power reserve requirement is only 25 per cent. 

   Chalermchai said the Laos projects included the Hongsa thermal power
project, whose Unit 1 has a
   capacity of 304 megawatts and whose Unit 2 will have a 304 megawatt
capacity when completed in
   2003. Meanwhile, the Nam Ngeum 2 (553 megawatts) and Nam Ngeum 3 (430
megawatts) projects
   are due for completion in 2004. 

   Egat has already signed a memorandum of understanding (MoU) with all
three projects and is
   negotiating power prices. 

   In addition, three others being negotiated are the Sepian-Senam Noi
project (365 megawatts), Nam
   Thern 2 project (600 megawatts) and the Sekaman project (about 400
megawatt). Earlier, Egat
   planned to buy power from these projects around the year 2006. 

   An Egat source said the six projects had not started construction but
developers hade invested in
   feasibility studies which had cost at least US$1 million per project. 

   The source said Thailand would have to renegotiate cautiously with Laos
to avoid problems in their
   bilateral relations. Earlier, the two countries signed an agreement
under which Thailand was to buy
   3,000 megawatts of power from Laos starting in 2006. 

   Egat expects to begin talks with its counterparts in Laos on postponing
the power purchases until after
   2007, after the next 1999-2001 PDP is completed. 

   Power projects in Laos will likely be suspended because Thailand's
slowing electricity demand will
   diminish the viability of project financing since Egat is the major
purchaser of power from its neighbour.
   ''Financial institutions are not expected to lend money to the projects
because of the fact that Egat has
   an excess power reserve,'' said the source. 

   Earlier, Egat signed power-purchase agreements with the developers of
Laos' Nam-thern Hin Bun and
   Huay Ho hydro-power projects. The source said these agreements would not
be changed. 

   BY WATCHARAPONG THONGRUNG 

   The Nation 


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        Copyright © 1997 Nation Multimedia Group. All rights reserved Last
Updated: May 1, 1998




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