Avoids protests and saves money
Thailand's key electricity generating authority will invest in building a dam on the Salween River in Burma as it says hydro-power is the cheapest method of generating power.
As well, investing in hydro-electric projects in neighbouring countries means avoiding protests by conservationists in Thailand where they have more freedom to press their cause and power projects are required to pass environmental impact assessment.
The Electricity Generating Authority of Thailand says it will invest in the US$5.5-billion project as it is cheaper than building its own power plants in Thailand using other sources of energy such as coal and oil.
Egat's board yesterday approved plans to buy power generated by the project. The authority's executives will talk with Burmese counterparts on Nov 21 with a view to starting dam construction as quickly as possible.
Under the existing plan, the dam is due to start supplying electricity to Egat by 2013 but the board wanted an earlier delivery date, said Sitthiporn Rattanopas, Egat's governor.
The dam will produce 5,000 megawatts of electricity, according to a study by Energy Power Development Corporation of Japan.
It says the project has high potential for power production as it will have a storage capacity of 120,000 cubic metres of water, compared with 6,000 cubic metres at the Bhumibol dam, the biggest in Thailand. The dam will be located in Burma, opposite Mae Sa Liang in Mae Hong Son.
Mr Sitthiporn said Egat would develop, finance and operate the project under a timeframe specified in a concession granted by Burmese authorities. After the concession expired, Egat and Burma would hold an equal stake in the project.
Part of the construction cost will be met from 10 billion baht that Egat derived from retained earnings and proceeds from the sale of the Ratchaburi power plant. The balance will be borrowed or obtained by issuing bonds.
Although the dam is located in Burma, the generating units will be installed in Thailand, making it easier for Egat to secure low-interest loans to fund the project.
The Salween project was discussed at the recent Asean Summit in Cambodia where energy ministers agreed the project would go ahead. The Burmese government is encouraging Asean members to develop basic infrastructure in Burma.
Mr Sitthiporn said Egat's board also endorsed a plan to extend the operating life of the authority's existing power plants by 15 years from their regular lifespan of 15 to 20 years.
Egat could save about US$203 million by overhauling the units rather than building new plants, he said.
The existing plants currently produce a total of 2,800 megawatts.
All but Bang Pakong, South Bangkok and Khanom power plants would have their units overhauled, Mr Sitthiporn said.