Thailand aims to be S-E Asia's middleman in trading power

Bangkok

THAILAND is jump-starting a decades-old plan to create a South-east Asia electricity super-grid, and wants to be the power-trading hub at the centre of it.

The nation is set to triple the amount of electricity from Laos that it resells to Malaysia, while encouraging infrastructure upgrades stretching from Cambodia to Myanmar necessary for cross-border power trading, said Wattanapong Kurovat, director-general of the country's energy policy and planning office. The moves are part of Energy Minister Sontirat Sontijirawong's efforts to make Thailand's power system cleaner, cheaper and more efficient.

The trade is simple, Mr Wattanapong said. Thailand would buy more electricity for its own national grid from Laos, which generates more than it needs from dams along the Mekong River and its tributaries. It would then have excess power in its own national grid that it could sell into Malaysia, Cambodia or Myanmar.

"We're trying to move quickly to become the centre of the region's power grid," Mr Wattanapong said in an interview in Bangkok. "We already have the capacity and the infrastructure to support the vision to become the regional hub." The idea of connecting power plants and customers across South-east Asia has been pursued for more than 20 years, but stymied by issues including lack of government coordination and infrastructure funding.

International grids are rare outside Europe, and require solving technical and legal hurdles in addition to building expensive infrastructure. The benefits of success include increased energy security and opportunities to develop untapped renewable resources, according to the International Energy Agency (IEA).

Thailand already has existing grid interconnection with Laos and Malaysia. Since last year, Malaysia has been buying 100 megawatts from Laos through Thailand, and is looking to increase the volume to 300 megawatts, Mr Wattanapong said. As well, border towns in Cambodia and Myanmar have been buying small amounts of electricity from Thailand, but infrastructure upgrades are needed to reach the scale comparable to connections with Laos and Malaysia, he said.

Being a hub would bring myriad benefits, Mr Wattanapong said. Thailand could earn additional revenue from transmitting electricity across its power lines, address occasional capacity oversupply, and make better use of its existing infrastructure and power plants. By using its grid more efficiently, the cost of electricity in Thailand would be cheaper over the long-term, he said.

Thailand could also help spur movement towards a regional system by signing different bilateral deals with its neighbours, which would be easier than trying to negotiate a larger agreement all at once, said Bikal Pokharel, research director for Asia-Pacific power and renewables at Wood Mackenzie Ltd.

Improved interconnection could justify building large renewable projects in developing countries that otherwise wouldn't have demand to use them, such as hydropower in Laos or wind power in Vietnam. BLOOMBERG