| Keynote
Address By Mr. Anand Panyarachun
Chairman,
Council of Trustees, Thailand Environment Institute
Former Prime Minister
of Thailand
The Three E’s: Electricity, Energy and Environment
At
the Twelfth Conference on the Electric Power Supply Industry
(CEPSI)
Dusit
Resort Hotel, Pattaya
November 2, 1998 Distinguished
Guests, Participants, Ladies and Gentlemen It
gives me great pleasure to address today what is certainly the most impressive
group of global electricity supply leaders ever assembled in Thailand. And I hope
that your presence here reflects a strong interest in Thailand. Although the current
economic outlook is not as bright as it once was, we are working hard to restructure
our economy, restore our faith and rebuild a business climate which will once
again be conducive to growth in the near future. Today,
I shall share with you my views and vision on the reconciliation of electricity,
energy and the environment in the 21st century. Before I continue with
my speech, I would like to take this moment to congratulate the host organization,
the Electricity Generating Authority of Thailand, better known as “EGAT”, for
their tremendous effort and hard work in producing the exceptional turnout for
this meeting. Somehow, I do not feel at all a stranger in this place, even though
I cannot really proclaim to be an electrician or an environmentalist. However,
during the past decade I have been associated with several organizations both
in the public and private sectors that significantly influence the power industry.
Besides the Prime Minister, my affiliation with two distinguished organizations,
the Thailand Development Research Institute and the Thailand Environment Institute,
has significantly amplified my interest in the development of sustainable energy.
As businessmen, several of our investments are in industries which use electricity
as a major resource component, and also in the electricity supply industry, itself,
a power producer. Therefore, what I am going to present today will be the emerging
key issues as I see them and the need to enhance the balance among a handful of
concerns that all begin with the letter “E”, Electricity, Energy, Economy,
Efficiency, Equity and the Environment. Electricity:
An important Fuel for Economic Development and Quality of Life Faced
with the fragility of today’s regional or perhaps even global economic situation,
current energy security problems and conversation challenges become even more
critical. Electricity has played a central role in fueling the country’s social
and economic development during the last two decades. During the period from 1984
to 1996, power generation capacity increased by an average of 9.5 per cent per
annum from 5,848MW in 1984 to 19,142MW in 1996. Thailand’s economy has grown very
rapidly and has developed International competitiveness based on an abundance
of natural resources, inexpensive labor and a strong local market. Electricity
was a key ingredient for assisting the country achieve this economic growth and
prosperity. Electrification also enhanced the quality of life. Through electrification,
living standards have risen and more social comforts have appeared. Figures from
the Provincial Electricity Authority indicate that, presently, as much as 98 per
cent of 64,457 villages in Thailand have access to electricity from the national
grid. With electricity, people have transformed their lives through increased
domestic comforts, industrial competitiveness, job creation and revenues. Even
so, electricity consumption per capita in Thailand remains far less than in industrialized
societies. Energy production and consumption,
in fact, poses many threats to human health and environmental resources. Thailand’s
energy related environmental problems are not confined to power facilities which
burn fossil fuels. The legacy of environmental impacts resulting from conventional
electricity technologies of thermal power plants and hydropower, although not
devastating, still await an environmental clean-up and proper management. Competing
energy sources have their own strengths and weaknesses in terms of environmental
and society consequences. No single option ensures total environmental protection.
Obtaining massive hydropower required large amounts of land which more often then
not was in conflict with land utilization for other purposes, such as agriculture
and forest conservation. The displacement of local populations has also been a
major, critical issue associated with the creation of large dams and reservoirs.
However, from the point of view of sustainable resources, hydropower remains one
of the best options. Energy generation by means of thermal power generates wide
ranging environmental impacts that are of global, regional, and local concern.
The emission of greenhouse gases is creating global consequences leading to climate
change and ozone depletion. More regional and local effects are seen in acid rain
which damages agricultural flora and fauna, and in air pollution. Other dire effects
include land and water contaminated by process wastes. Electricity:
Essential Goods in a New Era of Borderless Power Markets Energy
plays an important role in achieving economic goals or development within a wide
range of energy and economic strategies in each country in the region. Some countries
promote their economy by importing energy, while others accelerate economic growth
by exporting energy. Trade of energy resources in the region is one of the key
factors which is beneficial for all the countries involved. However, some conflicts
do arise which need to be addressed in this borderless power market. Following
the deregulation of the power sector in 1992, plans to privatize state-owned power
utilities has been proceeding and is ongoing. To promote private participation
and competition in electricity generation in Thailand, three forms of private
participation are emerging. EGAT established subsidiary companies, allowing both
small power producers (SPPs) and independent power producers (IPPs) to participate
in supplying electricity. National energy policy also encourages power investment
and electricity imports from the neighboring countries of Lao PDR, Myanmar and
Malaysia. Several agreements have been established with these countries and a
number of power projects are in different stages of preparation. Over
a 25 year period, starting from 1998, Thailand will buy almost 95 per cent of
the electricity generated by power facilities in Lao PDR. In fact, a memorandum
of understanding has been established between Thailand and the Lao PDR by which
Thailand will purchase power from and make huge power investments in Lao PDR.
Negotiations are currently in the early stages between Thailand and power authorities
in Southern China and in Myanmar, where several existing and potential hydropower
resources are expected to generate energy for export to Thailand. These new players
and new sources of electricity also generate new concerns and issues regarding
the rights of local people in relation to natural resources and the environment
which are being utilized to support the production of electricity for export to
other areas, other countries and other users. Experience
shows that significant structural and ecological consequences are often borne
by the local people. Their environment bears a disproportionate share of pollution
and destruction. The 900MW Nam Thuen II hydropower project in Lao PDR was delayed
for over two years due to environmental issues. Environmentalists and resistance
groups voiced their concerns to the World Bank and the Thai government, calling
for a reconsideration of the plan to purchase power from this project. The Nam
Thuen II dam will flood 450 square kilometers of pristine forest, uprooting and
displacing various local tribes from their home in the Nakai Plateau. Early
this year, the Thai government requested my assistance to chair the National Committee
attempting to settle the conflict and dispute over the Yandana Gas Pipeline Project
from Myanmar to western Thailand. This project was controversial for environmental
and political reasons. The primary cause of the vocal resistance to the gas pipeline
project was human rights issues in Myanmar and partial placement of the gas pipeline
through a reserved forest in western Thailand. Security was another issue. In
the context of trans-boundary import and export of electricity and energy resources
such as natural gas, the issue is no longer national but has become an International
affair. Arguments had been put forth that the country which creates the electricity
demand should share the responsibility to ensure the proper power development
in the source country, and that environmental safety and social justice should
be high priorities. Through this involvement,
I found that predicting environmental impact was no longer the biggest constraint
to project implementation. Nor was the design of buffers to protect and heal the
environment. Rather, failure to analyze strategic alternatives has been found
to be, by far, the most significant constraint in gaining public acceptance. Project
justification is not clearly perceived by the local stakeholders. No forceful
explanation about why the pipeline right-of-way could not have been rerouted to
avoid all conservation natural resources was presented. The project proponent
failed to adequately assure the public and the resistance groups that the most
environmentally and socially friendly options had been selected. The
Yandana Gas Pipeline episode is a good example of the need for a comprehensive
energy sector plan that includes alternative energy policies, plans and strategies
or project types, taking into account their costs and benefits, particularly the
environmental and social impacts. Analysis of pertinent alternatives will prevent
high impact projects from getting on the priority list. After projects are ranked,
based on the lowest environmental cost, project specific assessments can be performed.
By employing this strategic planning on a sector wide level, the public consultation
process at the stage of project specific assessment becomes more manageable with
minimal conflict. If stakeholders have participated in the selection of environmental
criteria and procedures, short-listed projects, based on the agreed upon criteria,
are likely to be widely accepted by civil society. Electricity
Recession: Time to Reassess Energy and Economic Strategies Today,
we gather here in the midst of a regional economic disaster. The Thai energy sector
is suffering from falling demand and a market surplus. Costs are rising due to
the burden of currency depreciation and unproductive generating capacity. To survive
this crisis, the power industry will need to increase internal efficiency through
material saving, maintenance and personnel management. I can assure you that an
increase in the price of electricity is not the solution. Rather, costs should
be reduced and business strategy refocused. At the end of the 1998 fiscal year,
electricity demand was down 0.5 per cent from the previous year. Peak power demand
slipped by 2.3 per cent to 14,180MW. If the situation continues and there is no
further delay in IPP projects, EGAT will reduce the capacity of its power plants
by at least 4,800MW in the year 2001. Having suspended purchases of power from
neighboring countries, shelved some of its own projects, and delayed commercial
operations for most of the IPP and SPP power projects, EGAT anticipates that in
2001, the Authority’s energy reserves will be at a high level of 60.66 per cent
of total capacity. Conventional approaches
to energy have focused mainly on increasing energy supply to meet energy demand,
but it is now becoming clear that a new approach is needed in order to meet social,
economic and environmental objectives. We can turn this economic recession into
an opportunity to improve efficiency and increase the profitability of existing
power facilities. We can optimize resource utilization, reduce waste and adopt
more advanced electric technologies favorable to the environment. The economic
crisis aside, long term savings, monetarily and environmentally, could be very
real. Much can also be done with extending the life of existing power plants for
five years or longer. More efficient, less damaging use of resources can be achieved
through initiatives such as the implementation of the Environmental Management
System ISO14000. The use of economic instruments, clean technology and pollution
control measures still holds great promise. We can pursue a sustainable energy
development approach and be optimistic that the economy will regain its momentum
in the not too distant future. We will be ready to provide the energy necessary
for the recovery process, and we will respond to economic and social aspirations
with efficiency and sustainability. The
concept of sustainable development is well known and is now shaping World business
and the global economy. The principles of sustainable development promise to be
major issues for economic and social policies as we enter the 21st
century. What does sustainable development means for energy? I am certain that
most of you in the power industry have great interest in the principle of sustainable
energy. Without referring to one specific technology or another, I would like
to urge you to continue and even intensify your efforts toward a more energy-efficient
future. The power plants of the next century
should be green, a color representing the concept of sustainable energy production
and consumption. An environmentally, efficient supply of electricity should incorporate
these efforts; 1) maximizing energy efficiency and minimizing losses in the production
and transmission of electricity to users; 2) minimizing environmental impacts
associated with energy production by using cleaner fuels and applying appropriate
management and equipment control; 3) maximizing or possibly replacing the use
of fossil fuels with non-fossil and renewable energy resources when technically
feasible and economically justifiable. Demand
side management (DSM) must be incorporated into supply options in long term power
development plans. In this context, recognition and commendation are in order
for Thailand’s DSM efforts, which are regarded as one of eight success stories
among 100 projects supported by the Global Environment Facility (GEF). Thailand
was the winner of the ASEAN AWARD. Thai DSM efforts officially began in 1993.
The measure has been implemented in all energy sectors; residential, commercial
and industrial, using various measures and technologies suitable to the region
and culture. Environmentally Friendly
Energy Options for the 21st Century The
electricity industry is at the cross- roads of energy options. We are faced with
pressing priorities such as power sector restructuring, energy security and scarce
resources, limitations of capital investments and diminishing environmental quality.
In arriving at decisions, there must be a real balance, a trade off between energy
supply and use, economy and the environment, and social goals. We will survive
unfavourable past economic and environmental experiences, and we will not give
up our quest for sustainable energy development. You
will agree with me that in order to achieve energy security, it is not appropraite
either to exclude altogether any specific energy resources, or to rely excessively
on one or the other. However, renewable sources such as hydropower, solar, wind,
geothermal and biomass should be used as much as possible through energy technology
development and cost reductions. With appropriate policies and new technology,
we can anticipate positive global environmental benefits as high as 10 to 20 per
cent for fossil fuel replacement. Renewable technologies are beginning to prove
on a significant scale, the distinct advantages that make them attractive and
cost effective. At any rate, conventional
electricity generation from fossil fuels is expected to continue to supply the
bulk of the electricity demand for many years to come. Linked with this, global
climate change, is the premier global environmental challenge of the 21st
century. The Kyoto Protocol requirement is unprecedented in the scope of responsibility
placed upon both developed and developing countries. It has been recognized as
the most complex and important International environmental convention ever signed,
both for its global industrial implications and for International relations. Energy
policy and options for the next century are now becoming a global matter. To
realize a sustainable society, it is necessary to use all available energy resources
effectively and in a proper manner to derive full advantages and to counterbalance
disadvantages. First choice resources would be clean, renewable energy such as
hydropower, solar, geothermal, wind power and the transformation of industrial
and agricultural waste into fuel. Discontinuing the use of fossil-based fuels
such as coal, lignite, oil and natural gas for the production of electricity is
simply not feasible as fossil fuels still offer economical advantages. However,
the sustainable development strategy focuses on increasing the efficiency of combustion
technologies and investments in pollution reduction equipment in all cases where
there is significant potential for progress. Another
option is nuclear energy, the world’s third largest source of electricity generation
after hydropower and coal. Use of nuclear power could have major environmental
benefits. Nuclear plants are very compact and have modest land requirements. They
do not normally emit carbon dioxide, greenhouse gases, or any other pollutants
into the atmosphere. The supply of nuclear fuel is abundant. However, concerns
have been expressed about nuclear safety, stemming largely from the accidents
at Three Mile Island in 1979 and Chernobyl in 1986. We may, therefore, have to
prepare for a critical situation arising in a few decades ahead. We will be forced
by the dangers of global warming to drastically reduce the use of fossil fuels
and we will have no alternatives in sight. In such circumstances, nuclear fission
could be the only alternative for partial alleviation of the situation. This goal,
however, cannot be achieved by isolated individual efforts and would require the
concerted efforts of the International community. Action to improve the acceptance
of nuclear power by the general public or by local communities is essential. The
public’s perception of the environmental consequences in this matter is crucial.
But the present negative view is subject to change only through proven safety
technology and public education. Nuclear power is perceived as extremely dangerous.
However, global climate change which is now threatening the survival of mankind
is actually being caused largely by burning fossil fuels. Conclusion There
is no doubt that we have reached the point where energy and the environment are
inseparable. All future plans and actions must recognize and integrate this reality.
By learning from previous success stories and mistakes, and by having the courage
to sincerely forge a more sustainable path, the relationship between energy and
the environment will become more compatible. I
believe that electric utilities will continue to have a significant role and responsibility
in defining this new relationship as we enter the 21st century through
the reconciliation of short and long term needs of economic growth and efficiency,
environmental quality and social well-being. Progress will inevitably include
strategies for eco-efficiency, efficiency in both supply and demand, and fossil
fuel efficiency for limiting greenhouse gas emissions. Renewable technologies
such as hydroelectricity, use of biomass and geothermal power are likely to expand
rapidly. Their costs will continue to decline with technological progress and
mass production. Furthermore, the door to nuclear energy must be kept open. However,
unless the problem of nuclear waste treatment is completely solved, we must recognize
that concern will supersede any progress for maximizing the environmental benefits
of this alternative. Throughout the decision-making
process, we must not forget that any initiative in the public realm will involve
interest from many diverse stakeholders. We must have the courage to acknowledge
these voices through the incorporation of a sincere participatory approach to
resolving potential conflict. We must educate, communicate and demonstrate leadership
in this regard. Above all, we must strive
towards a more sustainable future. | 
