Delays force Egat to cancel laos electricity deals
By Watcharapong Thongrung, The Nation, Published on July 25, 2008
http://nationmultimedia.com/2008/07/25/headlines/headlines_30078961.php
The Electricity Generating Authority of Thailand (Egat) has cancelled a deal to buy electricity from four hydropower plants in Laos after the developers faced a 30-per-cent hike in construction costs and could not proceed with the projects as planned.
"This will delay the feed of power into the system, and Egat may need to adjust electricity rates upwards, in line with higher costs. However, the purchase price must not exceed Egat's power-generating cost," governor Sombat Sarntijaree said yesterday.
The Nam Thuen 1, Nam Ngum 3, Nam Ngieb and Nam Ou plants have agreed to sell a combined 2 gigawatts to Thailand, but they are expected to delay exports by one year to 2014.
Laos will need to submit a new proposal for power purchases from the four plants or even new projects, Sombat said.
The Energy Ministry said earlier that the Lao government planned to propose selling power from three or four small plants in the lower Northeast with a combined capacity of 1GW.
Thailand and Laos agreed to the supply of 7GW. While Egat's memorandum of understanding with the four now-stalled plants covered 2GW, the countries are negotiating for the rates of the remaining 5GW.
As domestic capacity expansion grows tougher on environmental concerns, Thailand is looking to buy power from her neighbours, including Cambodia.
Sombat said the Cambodian government recently sent a list of potential developers and that Egat would select the one offering the lowest quote, which must be below Egat's generating cost.
The interested parties are a consortium of Electricity Generating and Italian-Thai Development and a consortium of the Charoen Pokphand Group and local investors.
A 7.2GW coal-fired power plant in Koh Kong, Cambodia, is expected to start supplying power in 2016.
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