2 weeks Ago
The People's Party hit the nail on the head when its party leader raised concerns during a recent Lower House inquiry over irregularities in a renewable energy bidding project. The bidding was held to find firms to supply 3,600 megawatts (MW) of renewable electricity to the national power grid. Natthaphong Ruengpanyawut, opposition leader, said the bidding conditions will favour big energy firms.
Apart from potential unfair competition, he said the government was also likely to buy renewable energy at high prices, which will affect consumers in the end. The irregularities included that criteria to be met by contractors were announced only after applications had closed. Mr Natthaphong also questioned why firms that failed in the first auction round were allowed to contest again.
He asked why the government had not revised the contract to make it fairer. This was the second round, after the first was held over a year ago. "What is needed is the political will to address the problem," said Mr Natthaphong.
The response from the energy minister confirms the opposition leader's accusations may have grounds. Deputy Prime Minister and Energy Minister Pirapan Salirathavibhaga admitted the blunders, pledging to revoke the rule involving the failed bidder. Despite recognising problems with the first round, he said it was a fait accompli and nothing could be done.
Revising the contract could invite legal trouble. Mr Pirapan should try harder. If he yields too much, consumers could suffer.
As energy minister, he must explore every opportunity to make corrections where possible and serve the public interest. This debate underscores the wider problem of power purchase agreements and their effect on consumers and business competition. Among problematic contract obligations is a clause called an "availability payment" -- a price guarantee that obliges the Electricity Generating Authority of Thailand to buy electricity from producers, even surplus power it does not need.
Another clause concerns the notorious fuel tariff or "Ft" where Egat can pass on the cost of energy purchased to consumers in their monthly power bill. In fact, the concerns raised by Mr Natthaphong are nothing new. Critics and activists have asked policymakers for years to revise Egat's power purchase agreements to reduce the impacts on consumers and make energy bidding fairer.
Current conditions such as price guarantees and the ability to pass the burden on to consumers only foster monopolies. The Energy Ministry is also faulted by the same critics for over-projecting energy demand, justifying more purchases from companies. Thailand has over 30% of energy reserves in the system.
Mr Pirapan said the problems existed before he took office as energy minister. But it would be wrong to say that he is "new" to the position. The energy portfolio has been occupied solely by Mr Pirapan's United Thai Nation (UTN) Party since the time of the Prayut government.
Apart from that, the cheaper energy prices which formed part of the party's election promises have not been fulfilled. As the opposition leader noted, solving lingering energy problems requires political will, which appears absent in the case of the energy minister..
