18 23 Oct., Provincial Electricity Authority (PEA), Thailand

Transcription

1 Department of Industrial and Management Engineering Indian Institute of Technology Kanpur Forum of Regulators 5 th Capacity Building Programme for Officers of Electricity Regulatory Commissions Oct., 2012 Rural Electrification in Thailand: Policy and Implementation Reungvith Vechasart Assistant Governor (Retired) Provincial Electricity Authority (PEA), Thailand การไฟฟ การไฟฟาสวนภ มภาค าส วนภม ภาค PROVINCIAL ELECTRICITY AUTHORITY Rural Electrification in Thailand: Policy and Implementation Reungvith Vechasart Assistant Governor (Retired) nd October th Capacity Building Programme for Officers of Electricity Regulatory Commissions Organized by IIT Kanpur 1

2 Content 1. Evolution of Rural Electrification in Thailand 2. Policy, Strategies, and Implementation 3. Lessons from Thailand Experience 4. Conclusion Provincial Electricity Authority, Thailand August 29, Geography Capital Province Population Currency Language Government Land Area 513,255 sq.km. Bangkok Thailand at a glance million (10 million in Bangkok) Baht (30.2 Baht/US$-2011 average reference rate) Thai Constitutional Monarchy ENERGY OVERVIEW 2011 Head of Government : PM Yingluck Shinawatra Electric Generation Capacity 32,395 MW Peak Demand 26,121 MW 4 2

3 Overview of Electricity Supply Industry Structure of ESI of Thailand Enhanced Single Buyer Model (ESB) Generation Power Purchaser, System Operation, And Transmission Distribution Retail Supply SPPs EGAT PEA EGAT Power Purchase System Operation Transmission Bulk Power Supply MEA IPPs Direct Customer Import R E G U L A T O R End User End User 5 Generation 13.8 kv Power System in Thailand Power Plant Transmission Line 69 kv, 115 kv Switchyard Substation Bulk Transmission Line 69 kv, 115 kv, 230 kv, 500 kv Substation Large Industrial EGAT PEA Substation HT Distribution Line 22 kv, 33 kv Distribution Transformer MEA Industrial LT Distribution Line 400 / 230 V household 6 3

4 Provincial Electricity Authority (PEA) Northern PEA s service area: 510,000 sq.km (99%) As of Dec 2011 Northeastern PEA Area (km 2 ) 510,000 (99%) Central Province 74 MEA s service area: 3,255 sq.km Villages 73,348 (99%) Southern Households (million) 16.2 (99%) 7 Rural Electrification in Thailand 8 4

5 1. Evolution of RE in Thailand NESDP PEA Target To develop the country economically and socially To extend electricity supply to all rural villages Provincial Electricity Authority, Thailand August 29, Evolution of RE in Thailand 4 Stages of RE in Thailand Initial Stage Target : 10,000 villages Electrified villages : 10,000 Accelerated Rural Electrification Program Stage Target : 64,228 villages Electrified villages : 64,228 Rural Household Electrification Stage Target : 73,213 villages Electrified villages : 73,213 New Rural Household Electrification Stage Present Target : All Rural Household Electrified villages : 73,348 Provincial Electricity Authority, Thailand August 29,

6 1. Evolution of RE in Thailand Stage 1 : Initial Stage Period Target Investment Status (12 years) 10,000 Villages By Small Diesel Power Plants 96.5 MB. (2.67 M.USD) Consist of PEA Revenue = 70 % Customer Expense = 30 % Electrified Villages 20 % Provincial Electricity Authority, Thailand Remark : ( * ) Exchange August Rate: 129, USD 2008 = 36.2 Baht Evolution of RE in Thailand Stage 2 : Accelerated Rural Electrification Program Stage Period (22 years) Target Investment Status 64,228 Villages By Grid System 25,988 MB. (717.9 M.USD) PEA Revenue = 70 % Customer Expense = 30 % Electrified Villages 98 % Source of Fund PEA Revenue Domestic Loan External Loan Provincial Electricity Authority, Thailand Remark : ( * ) Exchange August Rate: 129, USD 2008 = 36.2 Baht 12 6

7 1. Evolution of RE in Thailand Stage 3 : Rural Household Electrification Stage Rural Household Electrification Project phase 1 3 ( ) Solar Home System Project ( ) Period Target Investment Status (12 years) 73,213 Villages (4 Projects) By Grid System and Solar Cell 16,944 MB. (468 M.USD) Consist of PEA Revenue = 55 % Domestic Loan= 25 % External Loan = 30 % Electrified Villages % Provincial Electricity Authority, Thailand Remark : ( * ) Exchange August Rate: 129, USD 2008 = 36.2 Baht 13 Future Plan of RE Stage 4 : New Rural Household Electrification Stage Accelerated Rural Household Electrification Project (AHEP) New Rural Household Electrification Project (NHEP) Remote Rural Household Electrification Project (RHEP) Period Target Investment Status (2 years) 91,527 Households 2,045 MB. (65.3 M.USD) Consist of PEA Revenue = 25 % Domestic Loan= 75 % Electrified Villages % (55,941 Household) Remark : ( * ) Exchange Rate: 1 USD = 31.3 Baht Provincial Electricity Authority, Thailand August 29,

8 Future Plan of RE Stage 4 : New Rural Household Electrification Stage Accelerated Rural Household Electrification Project (AHEP) New Rural Household Electrification Project (NHEP) Remote Rural Household Electrification Project (RHEP) Period Target Investment Status (5 years) 131,629 Households 3,687 MB. (117.8 M.USD) Consist of PEA Revenue = 25 % Domestic Loan= 75 % Under Cabinet Approval Remark : ( * ) Exchange Rate: 1 USD = 31.3 Baht Provincial Electricity Authority, Thailand August 29, Future Plan of RE Stage 4 : New Rural Household Electrification Stage Accelerated Rural Household Electrification Project (AHEP) New Rural Household Electrification Project (NHEP) Remote Rural Household Electrification Project (RHEP) Period Target Investment Status (6 years) 14,100 Households 1,980 MB. (63.2 M.USD) Consist of PEA Revenue = 25 % Domestic Loan= 75 % Under Cabinet Approval Remark : ( * ) Exchange Rate: 1 USD = 31.3 Baht Provincial Electricity Authority, Thailand August 29,

9 1. Evolution of RE in Thailand Number of electrified villages and households in PEA s Service areas Status t ( Mar.2012) Villages All Rural Villages 73,360 (100%) Electrified 73,348 (99.98%) Remaining 12 In Plan 12 Status ( Mar.2012) Households All Rural Households in PEA s Service Area 16,385,757 (100%) Electrified 16,246,885 (99.15%) In Plan 138,872 Provincial Electricity Authority, Thailand August 29, , Evolution of RE in Thailand Progression of electrified villages in PEA s Service areas During NESDP, 1 st -10 th No. of Electrified Villages 70,000 60,000 50,000 40,000 30,000 20,000 1 st Initial stage (5%) (5%) 10, ,946 3,971 (99.11%) 3 rd RHE stage 73,200 (98%) 2 nd Accelerated REP stage (95%) 64,228 58,334 (21%) 10, (44%) 22,525 (75%) 41,374 4 th NRHE stage st NESDP 2 nd NESDP 3 rd NESDP 4 th NESDP 5 th NESDP 6 th NESDP 7 th NESDP 8 th NESDP 9 th NESDP 10 th NESDP Total Rural Villages = 73,360 Electrified = 73,348 (99.98%) 73, % As of Mar.2012 Provincial Electricity Authority, Thailand August 29, Year 9

10 การไฟฟ าส วนภ ม ภาค PROVINCIAL ELECTRICITY AUTHORITY 2. Policy, Strategies, and Implementation Provincial Electricity Authority, Thailand August 29, A Strategy Map Represents How the Organization Creates Value 11 Financial Perspective Customer Perspective Internal Perspective Learning and Growth Perspective Improve Cost Structure Price Productivity Strategy Quality Increase Asset Utilization Long-Term Shareholder Value Expand Revenue Opportunities Customer Value Proposition Availability Selection Functionality Service Product / Service Attributes Operations Management Customer Management Processes Processes Supply Selection Production Acquisition Distribution Retention Risk Management Growth Innovation Processes Opportunity ID R&D Portfolio Design / Develop Launch Growth Strategy Partnership Relationship Enhance Customer Value Brand Image Regulatory and Social Processes Environment Safety and Health Employment Community Human Capital Information Capital Organization Capital Culture Leadership Alignment Teamwork 10

11 THAILAND S RURAL ELECTRIFICATION STRATEGY MAP Commitment by the Government to Rural Development FINANCIAL F2 Diligent Attention in Keeping Cost Low F3 Increase Asset Utilization F1 Financial Viable F4 Urban-to to-rural Subsidies, Uniform Pricing Policy F5 Efficient Bill Collection SOCIAL S1 Social Responsibility CUSTOMER C1 Customer Satisfaction C2 Price C3 Quality C4 Availability C5 Service C6 Partnership Minimize Construction Cost Careful Planning for System Expansion Active Promotion of Electricity Adoption and Use Highly Innovative Development of Local Support INTERNAL PROCESS I1 Comprehensive Standardization (Supply) I2 Reliance on Locally Manufactured Materials (Supply) I3 Initiate Mini Hydro to RE (Generation) I4 Systematic Model for Planning & Village selection (Distribution) I5 Options for Accelerating Village Selection (Distribution) I6 Importance of Royal Support (Risk Management) I7 Market Research as Part of Load Development (Selection) I8 Promotion of Productive Uses of Electricity (Acquisition) I9 High-Quality, Responsive Customer Service (Retention) I10 Promoting Household Adoption (Growth) I11 Invent Alternative of Village Electrification (Design and Develop) I12 Initiate New Method on Bill Collection (Design and Develop) I13 Utilize Concrete Poles and Cross arms in place of wood (Environment) I15 Seek Local for Construction Labor (Employment) I16 Low-cost, Affordable Connections (Community Program) I14 Disseminate Knowledge on I17 Encourage Local Sft Safety Involvement (Safety and Health) (Community Program) LEARNING AND GROWTH CULTURE L3 Compromise and Flexible Culture HUMAN CAPITAL L1 Careful Recruitment and Intensive Training of Project Personal INFORMATION CAPITAL L2 Initiate Information Processing through Computer System ORGANIZATION CAPITAL LEADERSHIP ALIGNMENT TEAMWORK L4 Strong Determination and Leadership of Project Director (Dr. Chulapongs Chullakesa) L5 Institutional Approach Favors Distribution Company/ Setting up of Office of Rural electrification L6 Close Coordination with National Economic and Social Development Board L7 Efficient Management of Standard Construction Crew Asst. Governor, Organization Development 14 October 2012 THAILAND S RURAL ELECTRIFICATION STRATEGY MAP Commitment by the Government to Rural Development FINANCIAL F2 Diligent Attention in Keeping Cost Low F3 Increase Asset Utilization F1 Financial Viable F4 Urban-to to-rural Subsidies, Uniform Pricing Policy F5 Efficient Bill Collection SOCIAL S1 Social Responsibility CUSTOMER C1 Customer Satisfaction C2 Price C3 Quality C4 Availability C5 Service C6 Partnership INTERNAL PROCESS Minimize Construction Cost Careful Planning for System Expansion Active Promotion of Electricity Adoption and Use Highly Innovative Development of Local Support I1 Comprehensive Standardization (Supply) I2 Reliance on Locally Manufactured Materials (Supply) I3 Initiate Mini Hydro to RE (Generation) I4 Systematic Model for Planning & Village selection (Distribution) I5 Options for Accelerating Village Selection (Distribution) I6 Importance of Royal Support (Risk Management) I7 Market Research as Part of Load Development (Selection) I8 Promotion of Productive Uses of Electricity (Acquisition) I9 High-Quality, Responsive Customer Service (Retention) I10 Promoting Household Adoption (Growth) I11 Invent Alternative of Village Electrification (Design and Develop) I12 Initiate New Method on Bill Collection (Design and Develop) I13 Utilize Concrete Poles and Cross arms in place of wood (Environment) I15 Seek Local for Construction Labor (Employment) I16 Low-cost, Affordable Connections (Community Program) I14 Disseminate Knowledge on I17 Encourage Local Sft Safety Involvement (Safety and Health) (Community Program) LEARNING AND GROWTH CULTURE L3 Compromise and Flexible Culture HUMAN CAPITAL L1 Careful Recruitment and Intensive Training of Project Personal INFORMATION CAPITAL L2 Initiate Information Processing through Computer System ORGANIZATION CAPITAL LEADERSHIP ALIGNMENT TEAMWORK L4 Strong Determination and Leadership of Project Director (Dr. Chulapongs Chullakesa) L5 Institutional Approach Favors Distribution Company/ Setting up of Office of Rural electrification L6 Close Coordination with National Economic and Social Development Board L7 Efficient Management of Standard Construction Crew Asst. Governor, Organization Development 14 October

12 PROBLEM ON: F1 POOR Financial FINANCIAL Viable RETURNS JEOPARDIZE FINANCIAL STATUS High cost of investments with low financial rate of returns. Intensive RE investment program would have a direct effect on its own financial standing. 23 POOR F3 Increase FINANCIAL Asset RETURNS Utilization..: Strategies Careful system expansion planning. Prevent political interference with the village prioritization and selection process Emphasize that distribution company must be financially viable

13 Electricity tariff for each customer category must be the same all over the country. The tariff structure is based on cross subsidy between customer categories. Oblige the rich customers such as industrial to subsidize the poor one. EGAT to sell power at lower price to PEA than to MEA / direct subsidy from the rich capital and industrial area to rural. F4 SYSTEM OF CROSS - SUBSIDIES : SYSTEM OF CROSS - SUBSIDIES : Actions EGAT charged PEA 30% lower than it charged MEA Retail tariff rate structures designed to charge larger users at higher rate than small users Both PEA and MEA were required to use the same retail rate structure. PEA is compensated from 30% save in bulk rate purchasing from EGAT set above

14 We was keenly aware that problems in bill collection from customers could lead to financial problems. No Money No Honey PEA hired local respected individuals to collect on bills, such as school teacher, village head, or village elder. I1, I2 Minimize Construction Cost Cost Cutting Strategies : Standardized the systems, designs, materials, equipment and construction techniques. Use locally produced materials when possible. Seek local support (e.g. Capital and labor contributions ) Set up a voluntary system of contributions for the capital costs of extension. Find access to concessional loans and grants

15 I1, I2 Cost Cutting Strategies Cost Cutting Strategies : Outcomes Reduced procurement and material handling expenses. Reduced purchasing cost through bulk purchasing. Help strengthening the capability of local industry. Get right - of - way permit for free. Clearing and cutting economic trees without compensation. The saving enabled PEA to provide electricity to an additional 837 villages or 22 % more than targeted for the project. 29 I1 Comprehensive Standardization Selected 22 kv and 33 kv as the standard for its distribution ib ti system through h out the country. Opted to standardize all of the equipment and components used for construction of distribution systems of all individual electrification projects. 15

16 Reconnaissance Study to assess readiness of all relevant party, the Government, PEA, EGAT, Rural Population. Pre Feasibility Study (National Plan for Thailand Rural Electrification) Detailed Feasibility Study for Individual Project I4 Original Timetable for Thailand s National Rural Electrification Plan (Source: PEA 1978) Stage Fiscal Years In Program Accumulated Region I ,200 5,200 Northeast II ,000 13,200 South III ,500 26,700 North IV ,500 41,200 Central V 1990 onward 5,800 47,000 Countrywide 16

17 Village I4 allocation Village Selection, selection and prioritization If not properly plan, it would jeopardize financial viability and success of the program. Priority of villages :- - Potential high demand load, - Large productive use of electricity, - Maximum achievable economic return, and - Least cost optimization for grid connection If the politicians interfere, the undesired villages may get priority. 33 Village Allocation I4 Village, Selection Selection and Prioritization : Three Major Principles :- The quota allocations must maximize economic impacts and potential benefits and at the same time minimizing implementation costs. Enable the government to integrate RE with other rural development components. Give due regard to social and political requirements (politically unstable areas ) at all administrative levels - the villages, districts, provincials and regional level

18 The priority was given to the economically backward and politically unstable region North East First Ranking Village for final selection: Proximity to the grid Accessible by road Village size Number of expected customers in first five years Potential agricultural and industrial load Number of commercial establishments Extent of public facilities I4 Variables Used to Determine Viability of Electrification for Village Selection Access of Rural Households (%) Households Using Cooking Fuels (%) Dwellings Constructed in Past Five Years (%) General Health Indexes Ratio of Students Agricultural Assessment (%) Baseline Electricity Data Overall Village Characteristics 18

19 I4 Access of Rural Households (%) Public well as source of water supply Private well as source of water supply Electric lighting Radio Television Sewing machine Refrigerator Electric fan Water pump for agriculture use I4 Variables Used to Determine Viability of Electrification for Village Selection Households Using Cooking Fuels (%) Dwellings Constructed in Past Five Years (%) Charcoal Wood Gas Other Modern fuels 19

20 I4 Variables Used to Determine Viability of Electrification for Village Selection General Health Indexes Rural population density Population birth rate Population o growth go rate Ratio of population to local physicians Ratio of Students Upper elementary to lower elementary school Lower secondary to upper elementary school Upper secondary to lower secondary school I4 Variables Used to Determine Viability of Electrification for Village Selection Agricultural Assessment (%) Gross area in agricultural use Arable land under rice cultivation Arable land under field crop cultivation Total land under fruit trees and tree crops Baseline Electricity Data Consumption in villages already electrified Ratio of electrified households to total households Households with electricity (%) Overall Village Characteristic Average household size Average village population 20

21 I4 Village Socio economic Factors for Forecasting District Electricity Demand Households Characteristic Agriculture Households Income Households Expenditures I4 Village Socio economic Factors for Forecasting District Electricity Demand Households Characteristics Household size within village Net income per expenditure Agriculture No. of households that own lowlands for rice cultivation No. of households that own upperland for other crops No. of households with cattle and water buffalo Source: PEA Vol. I No. of households owning small livestock 21

22 I4 Village Socio economic Factors for Forecasting District Electricity Demand Household Income Average village income from agricultural sources Average village income from livestock sales Average village income from wages and salaries Average village income from other sources Total annual income Household Expenditures Fixed expenditure Variable expenditure Subsistence expenditure Social expenditure Total annual expenditure Source: PEA Vol. I I5 Prevent Options Political for Accelerating Interference Village With The Selection Village Prioritization and Selection Process Devised sound methods for village selection and prioritization criteria. Made the program flexible by providing alternatives for villagers and individual including politicians to receive priority treatment, but they have to pay

23 Normal Accelerated e Project PEA paid all construction cost Partial Contribution for Construction Cost around 30 % Full Contribution immediately connected to the grid I8 Promotion of Productive Uses of Electricity Increase Revenue In Rural Areas Implement Aggressive Load Promotion Program. - Promote rice mill owners to convert diesel engine drive rice mills to electric motors. - Promote new rice mills to use electric motors instead. - Promote house hold initial connection rate

24 I16 Commitment Low cost, To Affordability Affordable And Connections Service : Actions :- Set a relatively low cost and affordable connection fees, only US$ 18. Provided loans for house - wiring and initial connection costs - US$ 98. Appointed village head - men / leaders to take application forms and collected deposit / connection fees for PEA. Allowed rice mill owners to pay the connection fees by 12 month stallments with no interest. Coordinated with the Agricultural Bank - loans for rice mills 47 DIFFICULTIES IN ORGANIZATION L5 Institutional Approach Favors Distribution Company MANAGEMENT & ADMIN. : Strategies Designed proper Institutional Arrangement (Focus on Electricity Distribution) to make clear of the responsibility. Aimed at Institutional Arrangement that emphasize the significance of RE

25 Separate the generation and distribution via different companies PEA mandate is to provide electric power distribution ib i to provincial cities and rural areas throughout the country Is free to concentrate solely on distribution Do not have to concern itself with power generation and transmission. Do not have the burden to provide services to the highdemand, high growth Bangkok. 3. Lessons from Thailand s Experience Summarization : Commitment to Financial Soundness Financing Expansion Through Cross Subsidies and Concessional Loans Bulk Tariff Subsidies as Compensation for Universal Electricity Pricing Structure Avoid Political Interference Gaining Local Support Dedicated Distribution Company 50 25

26 Conclusion : Key Words Summarization : We found solutions Strong Determination and Dedication of Team Leader, Office of Rural Electrification, Targeting highest load villages, Cross Subsidies, low cost connections, Load Promotion Program, Standardization, Unique Bill Collection Method, Alternative for rich villages 51 26

27 THANK YOU การไฟฟ าส วนภ ม ภาค PROVINCIAL ELECTRICITY AUTHORITY Provincial Electricity Authority, Thailand August 29,