Focus on energy efficiency

Meanwhile, PTT president Pailin Chuchottaworn said he hoped to see the reform result in energy prices that reflected actual cost in line with the market mechanism, while the policies that created market distortion should be revoked and the reform process should also promote energy efficiency.

Kurujit Nakornthap, the NRC member in charge of energy reform, will propose that the country promote a common public understanding involving Thailand’s total consumed energy, of which more than half is imported.

He said that as Thailand was mainly dependent on imported energy, prices should be in line with the market mechanism and free-market competition should be promoted. 

He said that capping the prices of some energy types at low rates had distorted the mechanism and had burdened users of other energy types. 

The NRC would reform 11 areas, ranging from energy to education. 

Kurujit said that Thailand should also promote the use of alternative energy and energy conservation as part of the national agenda.

A forecast should be made on energy consumption over the next 50 years and plans should be laid out to ensure sustainable supply.

“As we’re a net-energy importer, we should urgently look for more new domestic energy supply sources while promoting the awareness of energy conservation to Thais when they are young,” he said. “We should not reject any kind of energy that will enable us to have an adequate and sustainable energy supply.”

Another NRC energy reform member, Plaipol Kumsap, said he would propose the scrapping of energy-price intervention, which in the past served a political purpose without concerns for the economic consequences. He will also promote renewable energy. 

 

Appropriate benefit-sharing

Plaipol said that before the plan to open a new round of petroleum exploration and production concessions was undertaken, it must be made clear which benefit-sharing methods are the most appropriate. 

He believes energy reform can be carried out in parallel with the Energy Ministry’s plans.

The ministry’s plans for fiscal year 2015 include the 21st petroleum-concession bidding round, preparing the new power-development plan by the year’s end, and holding another round of energy-price restructuring to reflect actual costs.

Another NRC member in the energy reform team, Rosana Tositrakul, said that energy reform should focus on making energy become a basic utility and its production cost should be reduced to help people. 

Rosana said that at present the energy sector was monopolised, which resulted in high costs.

The ministry should suspend plans that could have a long-lasting impact on Thailand, pending a thorough debate by the NRC on the direction energy reform should go. 

Among such plans is the ministry’s intention to open a new round of petroleum concessions. 

Rosana said to reform the sector, one should listen to the public and not only the 250 NRC members. 

The problem was that the sector had fallen into the hands of investor groups but the public, which was the owner of energy resources, had to bear the burden of rising costs and was not invited to take part in designing the reform. 

In a related matter, Kurujit, who also serves as director-general of the Mineral Fuels Department, said that there was no need for the department to wait for the NRC to debate the plan to open the 21st round of the petroleum concessions. 

He said that the plan was in line with government policy and had been approved by the petroleum committee chaired by the energy permanent secretary. The department proposed to the ministry that the benefit sharing in this round be on the so-called Thailand III Plus basis. Unlike the previous basis called Thailand III, the new basis features the signature bonus and production bonus. 

The signature bonus is a one-time fee the department collects when it signs a concession deal. 

For the production bonus, the department will ask for more benefits when the production of a concession-holder meets a statutory level.