Boston, MA -- (ReleaseWire) -- 12/31/2012 -- Electricity generation and consumption in Thailand is set to grow modestly in 2012, as the country recovers from the effects of the 2011 floods that led to the closure of four power plants. We expect the sector to grow modestly in the long term, but highlight that the country's regulatory environment will pose significant challenges. The country's nuclear energy ambitions have also been put on a halt due to safety concerns, with renewable energy targets raised to compensate for this.
We predict that electricity generation will grow by 4.0% in 2012, to reach 152.9 terrawatt hours (TWh). This is significantly higher than the historical five-year average of 2.3%, as the country recovers from the effects of floods in 2011. Heavy monsoon rains in October 2011 led to severe flooding in many parts of the country, including Bangkok, and the closure of four power plants with a total capacity of 1,210 megawatts (MW). These plants have been brought online again, and restoration efforts have also driven up electricity consumption.
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Over the longer term, we forecast electricity generation in Thailand to grow at an annual average rate of 4.8% between 2012 and 2021, underpinned by an average real GDP growth of 4.1% per annum. This is a downward revision from our previous forecast of 5.0%, which we attribute to the continued uncertainty surrounding the country's political landscape and economic outlook. Natural gas will continue to play a pivotal role in the country's energy mix, as opposition from the public has led to a massive delay in the Thailand's nuclear power programme. We thus expect the share of natural gas in total generation to increase, from 74.7% in 2012 to 77.7% in 2021.
Key trends and regulatory changes in the industry:
- The Thai government updated its green energy agenda in March 2012 with the ambitious 'Alternative Energy Development Plan' (2012-2021). The plan states that 25% of total energy consumption would derive from alternative energy sources, and set targets of 2GW of solar capacity, 1.2 gigawatts (GW) of wind capacity and 3.63GW of biomass, all by 2021.
- Construction on the controversial Xayaburi dam has restarted, despite opposition from Vietnam and Cambodia. The Thai government also affirmed a power purchase agreement for 95% of the dam's electricity output in January 2012, going against the regional decision-making process.
- The Thai government is set to open bids for six gas-based independent power projects (IPPs) with a capacity of 5400MW. Announced after Thailand's National Energy Policy Council approved the third revision of the country's 2010-2030 power development plant. All IPPs use natural gas.
- In April 2011, the Provincial Electricity Authority (PEA) stated that they would invest THB400bn into developing a smart grid over the following 15 years, and followed the announcement with a roadmap for the project's implementation.
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