Thailand Power Report Q2 2016
BMI View: Thailand's plan to reduce its reliance on gas-fired power generation will create opportunitiesfor alternatives such as coal and renewables, which poses upside risks to our outlook for the country'senergy related infrastructure. We highlight that lower than expected power consumption over the near termmeans such opportunities will begin to have an impact on infrastructure construction only beyond2017-2018 as projects are delayed until demand picks up. We retain a modest growth forecast for 2015 and2016, with power generation set to grow by 3.3% and 3.1% respectively.
Latest Updates And Structural Trends
The largest source of growth in 2016 will be thermal generation, while non-hydropower renewables willbe the fastest growing sub-sector at 11.0%. Meanwhile, the Thai power sector's long-term growth outlookis muted, as the country continues to experience challenges in procuring gas supplies and is clearlymoving towards increasing reliance on electricity imports. We see electricity generation growing at anaverage rate of 3.0% per annum between 2016-2025. Growth will be primarily driven by nonhydropowerrenewable energy generation and coal-fired generation. We see limited scope for expansionin gas-fired generation.
In September 2015, Thailand approved five public-private partnership (PPP) projects worth a total ofabout THB200bn (USD5.5bn) as part of the country's infrastructure development plan from 2015-2020.
The projects will be submitted to the cabinet for authorisation in 2015, according to Deputy PrimeMinister Somkid Jatusripitak (InfraPPP World). The approved projects include development ofBangkok's Metropolitan Rapid Transit (MRT) Pink Line and MRT Yellow Line. The THB56.7bn(USD1.56bn) first elevated train project will connect Kaerai and Min Buri, while the THB54.7bn(USD1.51bn) second project will connect Lat Phrao and Samrong. The government also approved theTHB82.4bn (USD2.27bn) Blue Line extension, which will connect Bang Sue and Bang Khae. Thepreferred bidder will be required to operate and maintain the extension. The other two projects are theTHB4.14bn (USD114mn) Nonthaburi waste-to-energy project and the THB2.25bn (USD62mn) NakhonRatchasima waste-to-energy facility.
The Thai government updated its green energy agenda with the ambitious 'Alternative EnergyDevelopment Plan' (2012-2021). The plan states 25% of total energy consumption must be derived fromalternative energy sources by 2021. It targets 2 gigawatts (GW) of solar capacity, 1.2GW of windcapacity and 3.63GW of biomass capacity within that timeframe.
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