Upgrading old SPPs better than building new solar plants: GE boss

GE Thailand president and chief executive Kovit Kantapasara described the National Energy Policy Committee’s February 16 resolution on SPP policy as being based on “inadequate knowledge of technology”. He said an old SPP plant could extend its life by 10-15 years, enhancing its generating efficiency by more than 5 per cent while reducing its emissions, through installation of new turbines to replace its old ones. This is known as the “re-powering” method.

The cost of re-powering an old 90-megawatt SPP plant is estimated at about Bt1 billion, 29 times cheaper than the cost of building a solar farm of equivalent generating capacity, Kovit said. 

His assumption is based on a solar plant’s 15-per-cent capacity factor versus nearly 100 per cent for an SPP plant. A “capacity factor” is the actual output of a power plant during a period of time against its installed capacity. In other words, one would have to build a 600MW solar farm to generate the same amount of electricity as a 90MW SPP thermal power station. Renewable-energy plants typically have low capacity factors because of the uncertain flow of natural sources such as sunlight and wind.

In an exclusive interview with The Nation, Kovit said the NEPC’s ruling was based on information prepared by people who had inadequate knowledge of power technology. This was especially demonstrated by the cap on the maximum amount of electricity that each SPP can sell to the Electricity Generating Authority of Thailand (Egat), at no more than 20 per cent of its installed capacity. He said this would cause more than 25 SPP plants with a combined capacity of 1,787MW to cease operations. 

“In effect, this will result in each SPP reducing its electricity generation from 90MW to 18MW. Most will have to shut down because they can’t run [efficiently] at an 18MW capacity,” he said.

Industrial customers that use steam supplied by these SPP co-generation plants will also be affected, since they will have to build their own boilers to produce the steam they need.

Moreover, electricity consumers will have to pay higher rates under this new policy because the SPP tariff of Bt3.50 per kilowatt-hour is roughly half of a solar farm’s |

 tariff rates, said the GE chief.

“If the government’s end goal is to get clean and inexpensive electricity, re-powering SPPs is a solution,” he said.

Kovit suggested that the government allow Egat to renegotiate its power-purchase contracts with SPPs to allow more flexibility.

“Policy-wise, Egat is not in favour of buying from SPPs because of the capacity payment,” which obliges Egat to pay for the availability factor of SPPs,  regardless of actual power generated. 

“Hence Egat should be allowed to renegotiate its terms with SPPs, such as waiving the capacity charge and paying only for the [actual] energy.”

Meanwhile, Kovit said that after booking flat revenue growth last year, GE had sets a high goal of 50-per-cent growth in its Thailand businesses this year. 

Among its main focuses are wind-farm projects, rental and purchase of new locomotives by the State Railway of Thailand, Egat’s new Bang Pakong power units, and PTT’s gas-compressor stations.