Private bids for building small power plants- the answer to Thailand’s growing energy demands?

Private bids for building small power plants- the answer to Thailand’s growing energy demands?

This month, Thailand's electricity consumption rose sharply as hot weather prompted companies and households to run air conditioners for longer periods. The Electricity Generating Authority of Thailand expects power usage to rise further this summer season.

Thailand will invite bids next month for the construction of small power plants at a cost of about $1.7 billion to boost electricity generating capacity, Energy Minister Piyasvasti Amranand said. Private companies will be asked to submit bidding in the next few weeks for the power plants, Piyasvasti said. The bidding will require new power plants to have capacity of a maximum of 90 megawatts, with a combined capacity of 1,700 megawatts, he said.

For the first time since 1994, Thailand will open biddings to add power supplies to the national grid as it seeks to avoid shortages. Ratchaburi Electricity Generating Holding, the country's biggest private power producer, Electricity Generating and other companies have prepared land, budget and other facilities to bid for the government's new power plants to boost earnings growth.

"There is no risk of power outages unless we fail to build new capacity," Piyasvasti said. The repercussions of power outages "will be much larger as modern industrial systems use computer-based equipment which needs very reliable power supply."

The winning bidders for new power plants under the small power producer program will be selected on a "the first come, first served" basis, Piyasvasti said. Despite efforts to conserve energy, the demand for power has been growing by between 5 percent and 8 percent per year, he said.

Piyasvasti also reiterated that to reduce Thailand’s dependence on imported oil, natural gas and other fuels by 2010, nuclear power plants will be required.

Is Thailand in danger of underestimating its needs? Could it risk future power outages despite Piyasvasti’s reassurances?