Better Power for Health: Healthy Public Policy and Sustainable Energy in Thai Power Sector Dr. Decharut Sukkumnoed Faculty of Economics, Kasetsart University Healthy Public Policy Foundation

The Inspiration of the Study Note: The study period is from September 2003 to September 2006 and submitted in April 2007

Growing Conflicts from Power Plant Projects

Growing Concerns on Health Impacts from Power Generation Direct health impacts from air pollution Loss of livelihood and food security

Healthier choices are available Source: Extern-E Project, Hunt 2004

HIA Development in Thailand Academic Papers People’s Need Draft of National Health Act Learning Practices Policy actions

HIA Institutionalization in Thailand Our Firm Ground Now The 10 th National Economic and Social Development Plan ( ) The 10 th National Economic and Social Development Plan ( ) The National Health Act 2007 The National Health Act 2007 People have rights to ask for HIA and participate in HIA process of any public policies People have rights to ask for HIA and participate in HIA process of any public policies The New Constitution 2007 The New Constitution 2007 Section 67 Any projects And activities that may cuase severe impacts on environment, human health, and quality of life cannot be done without conducting environmental and health impact assessment Section 67 Any projects And activities that may cuase severe impacts on environment, human health, and quality of life cannot be done without conducting environmental and health impact assessment

Introduction Many impacts from power plant projects, and not determine by each stand-alone decision-making process Many impacts from power plant projects, and not determine by each stand-alone decision-making process Power Development Plan Power Development Plan Master Plan of years for all new power plants according to long-term power demand forecast Master Plan of years for all new power plants according to long-term power demand forecast Energy options: fuel, technology, capacity, construction area Energy options: fuel, technology, capacity, construction area Lignite mining, gas pipeline, transmission expansion, etc. Lignite mining, gas pipeline, transmission expansion, etc.

Power Development Plan (PDP) as a Policy Options Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines Installed capacity required for Thai power system Installed capacity required for Thai power system Power technologies will be invested Power technologies will be invested Fuel-mix for power generation Fuel-mix for power generation Market access for IPPs and SPPs Market access for IPPs and SPPs The PDP for the study is PDP2004 ( ) which promote more natural gas in the fuel-mix The PDP for the study is PDP2004 ( ) which promote more natural gas in the fuel-mix

The problems of the PDP process No participation in planning and decision-making process - the parliament, senate, independent org., consumer groups, mass media No participation in planning and decision-making process - the parliament, senate, independent org., consumer groups, mass media Limited goal of energy security and utilities’ least cost Limited goal of energy security and utilities’ least cost Always too high power demand forecast Always too high power demand forecast Limited to large-scale conventional power plant - coal, gas, dam. Limited to large-scale conventional power plant - coal, gas, dam. Many dead-lock social conflicts at project level Many dead-lock social conflicts at project level

Power Development Planning in Thailand: PDP2007 by Ministry of Energy Demand forecast for the next 15 years Fuel options Gas, coal, nuclear, renewables, etc. Least-cost planning Public hearing Decision-making

Systematic Over-estimation of Demand

Historic trend Trend of Jan 2007 Forecast Past period (actual data)Jan 07 forecast period Problematic Assumption ที่มา : ชื่นชม สง่าราศรี กรี เซน, 2550

Energy Options: The assumptions on fuel prices of PDP 2007 Notes : (1–3) PTT 31 Jan. 07 (55 USD/BBL) : ( 4) Electricity Generating Authority of Thailand : ( 5) Australian Bureau of Agri. and Res. Economics + Transportation cost 15 USD/Ton : (6) Ux Consulting Company January 2007 Gas: increase 3.6% in 15 year Lignite: Increase 47% Imported coal: Increase 4% Oil&Nuclear: Same price in the next 15 year

Energy Options: Increase of the fuel cost The import price of energy (unit: 1000 Baht/Ton Oil Equi.) Fuel Increas e (%) Increas e (%) Crude oil Natural gas Coal Reference: Energy Report of Thailand, Dept. of Alt. Energy Dev. and Energy Conservation

Fast Growing in Renewable Energy Development

Energy Options: Costs of each option Fuel Options Cost (Baht/kWh) Nuclear2.08 Coal2.11 Natural gas 2.25 Oil~3.5 Wind~5 Solar11 Advertisements by Ministry of Energy, Feb.-Apr. 2007

Key Concerns on the nine PDP Options But why all renewables are fixed at only 1,700 MW in all options? Why include nuclear of 4,000 MW in all options? Who set these options and what are the impacts of each option? L = Low Growth B = Base Forecast H = High Growth 1=“Least-Cost” 2=“Feasible Coal Projects” 3=“LNG + More import”

The Public Hearings on PDP2007 The Ministry of Energy arranged the Public Hearing on 19 Feb at a hotel in Bangkok The potentially-affected local people turned up of around 400 persons and the Minister cancel the Hearing MoE arranged another Public Hearing on 2 April 2007 in the Thai Army Club with armed soldiers ‘for security reason’! NGOs, academics, and the local people boycotted the Hearing

No Consideration on CO2 emission in PDP2007 Reference: Energy Report of Thailand, Dept. of Alt. Energy Dev. and Energy Conservation

หมายเหตุ 1. ใช้สมมติฐานว่าต้นทุนร้อยละ 12.4 ของค่าไฟฟ้ามาจากธุรกิจสายส่ง 2. ใช้สมมติฐานว่าต้นทุนร้อยละ 14.5 ของค่าไฟฟ้ามาจากธุรกิจจำหน่าย 3. ค่า CO2 ที่ 10 ยูโร/ตัน 4. ค่า Externality ตามการศึกษา Extern E ของสหภาพยุโรป และนำมาปรับลดตามค่า GDP ต่อหัวของไทย 5. การศึกษาของ World Bank ตามระเบียบ SPP 7. ที่มา : กฟผ. 8. Cost of liability protection, Journal “Regulation” 2002 – 2003 OptionsCost estimation (Baht per kWh) ผลิตส่ง 1 จำหน่าย 2 CO 2 3 ผลกระทบ สวล. อื่น ๆ 4 ผล กระทบ สังคม รวม DSM 0.50 – Cogeneration (PES > 10%) VSPP (Renewable energies) ค่าไฟฟ้า ขายส่ง (~ 3) + Adder (0.3 – 8) – – ต่ำ 3.3 – 11.0 CCGT ต่ำ – ปานกลาง 3.93 Coal สูง 5.82 Nuclear สูง - สูงมาก 4.04 No consideration of externalities and total cost

Introduction Many impacts from power plant projects, and not determine by each stand-alone decision-making process Many impacts from power plant projects, and not determine by each stand-alone decision-making process Power Development Plan Power Development Plan Master Plan of years for all new power plants according to long-term power demand forecast Master Plan of years for all new power plants according to long-term power demand forecast Energy options: fuel, technology, capacity, construction area Energy options: fuel, technology, capacity, construction area Lignite mining, gas pipeline, transmission expansion, etc. Lignite mining, gas pipeline, transmission expansion, etc.

Power Development Plan (PDP) as a Policy Options Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines Power Development Plan is the EGAT’s long-term investment plan (10-15 years) which determines Installed capacity required for Thai power system Installed capacity required for Thai power system Power technologies will be invested Power technologies will be invested Fuel-mix for power generation Fuel-mix for power generation Market access for IPPs and SPPs Market access for IPPs and SPPs The PDP for the study is PDP2004 ( ) which promote more natural gas in the fuel-mix The PDP for the study is PDP2004 ( ) which promote more natural gas in the fuel-mix

The strategic HIA The Strategic Impact Assessment The Strategic Impact Assessment Public discussions, Social learning process, Policy implications, Policy influence Public discussions, Social learning process, Policy implications, Policy influence

Concepts of the strategic HIA Broad perspective HIA Broad perspective HIA Bio-medical VS. Socio-economic model of health Bio-medical VS. Socio-economic model of health Changes of the health determinants Changes of the health determinants The Ecosystem Health Approach (IDRC) The Ecosystem Health Approach (IDRC) Health Environment Social Economic

Impact Indicators Health Environment - GHG emission - SO2, NO2 - TSP - External cost Social - no. new conv. proj. - concentration ratio - decentralization ratio - renewable energy share Economic - investment - fuel cost - total cost - BOP burden

The methodology Policy Options PDP Options Strategic Impacts Overall Comparison Planning Criteria Coefficients of impact indicators

The potentials and reference cases of RE

PDP-Renewables combines three types of alternatives Cheaper Solutions Cheaper Solutions Revising demand forecasting with realistic assumption Revising demand forecasting with realistic assumption DSM = 2,400 MW (from 3,000 MW potential) DSM = 2,400 MW (from 3,000 MW potential) Competitive Solutions Competitive Solutions Biomass energy = 2,700 MW (from 7,000 MW potential) Biomass energy = 2,700 MW (from 7,000 MW potential) Biogas = 470 MW (from 900 MW potential) Biogas = 470 MW (from 900 MW potential) Micro-hydro = 300 MW (from 700 MW potential) Micro-hydro = 300 MW (from 700 MW potential) Industrial CHP 2,500 MW + re-powering of 2,800 MW Industrial CHP 2,500 MW + re-powering of 2,800 MW Expensive Solutions Expensive Solutions Solar PV = 470 MW (from 5,000 MW potential) Solar PV = 470 MW (from 5,000 MW potential) Wind = 260 MW (from 1,600 MW potential) Wind = 260 MW (from 1,600 MW potential) Scaling down Mae-Moh Lignite power plan by 50% Scaling down Mae-Moh Lignite power plan by 50%

Comparison of Three Policy Options (Power Development Plan: PDP)

Methodology for Strategic Impact Assessment Three PDP Options with the differences in - Demand forecasting - Power technologies - Fuel Mixes Emission factors from life cycle assessment of different power technologies for Greenhouse gas, SO 2, NO X, TSP, Mercury, and Non-methane VOC Environmental Impacts Co-efficient for healthy years of life loss (DALYs) from power plant emission Co-efficient for mortality and morbidity (cases) from different power technologies Physical Health Impacts Generation cost = Investment + O&M + fuel costs -Distribution of GDP contribution and import burden - Plus Externality Costs Economic Impacts The Eco-indicator approach The Extern-E approach

A Cleaner Option (1): Lower Greenhouse Gas Emission 20% lower than PDP-Gas 35% lower than PDP-Coal

A Cleaner Option (2): Lower Air Pollution Problem 17% lower than PDP-Gas 33% lower than PDP-Coal

A Healthier Choice (1): An Extern-E Approach 300 lives can be save compared to PDP-Gas and more than 1,000 lives compared to PDP-Coal

A Healthier Choice (2): An Extern-E Approach 23% lower than PDP-Gas 37% lower than PDP-Coal

A Healthier Choice (3): An Eco-Indicator Approach 18% lower than PDP-Gas 40% lower than PDP-Coal

Economic Benefits (1): Generation cost = 5.2% cheaper

Economic Benefits (2): 8.7% lower import burden and 2.7% higher GDP contribution

Overall Economic Benefit (3): Overall billion THB can be saved

Social Benefits from Job Creation 17,611 jobs more in 2015

Political Benefit: Achieving government target Government Target 6% renewable power in 2011

Sensitivity Analysis I: VS Cleaner Fossil-Fuelled Technology Environmental Impacts Environmental Impacts PDP-Renewables would be the best option, until 65-70% of emission reduction (except CO 2 ) in all fossil-fuelled technologies PDP-Renewables would be the best option, until 65-70% of emission reduction (except CO 2 ) in all fossil-fuelled technologies With 20% reduction in biomass and biogas emission, the confirmation level will increase to 75% With 20% reduction in biomass and biogas emission, the confirmation level will increase to 75% Health Impacts Health Impacts Extern-E approach – PDP-Renewables would yield the best result up to 75% health impact reduction from fossil fuelled-technologies Extern-E approach – PDP-Renewables would yield the best result up to 75% health impact reduction from fossil fuelled-technologies Eco-indicator approach - PDP-Renewables would be the best option, until 70-75% of emission reduction (except CO 2 ) in all fossil-fuelled technologies Eco-indicator approach - PDP-Renewables would be the best option, until 70-75% of emission reduction (except CO 2 ) in all fossil-fuelled technologies

Sensitivity Analysis II: Lower Fuel Cost Risk

Sensitivity III: Higher Demand Growth Coping Higher Demand Growth Coping Higher Demand Growth 10% more investment in renewables and DSM 10% more investment in renewables and DSM Delaying plan to scaling down lignite power plants Delaying plan to scaling down lignite power plants Install 2,100 MW CCGT by 2015 Install 2,100 MW CCGT by 2015 PDP-Renewables still provides the best outcomes PDP-Renewables still provides the best outcomes 19% lower greenhouse gas emission 19% lower greenhouse gas emission 14% reduction in chronic mortality 14% reduction in chronic mortality 3.1% lower generation cost 3.1% lower generation cost 2.3% higher GDP contribution 2.3% higher GDP contribution PDP-Renewables is a flexible option PDP-Renewables is a flexible option

Sensitivity Analysis IV: Low Demand Growth PDP-Gas may decide to lower demand prediction and its future installed capacity PDP-Gas may decide to lower demand prediction and its future installed capacity Therefore, PDP-Gas (low) would reduce its negative impacts Therefore, PDP-Gas (low) would reduce its negative impacts However, PDP-Renewables still yield the best results in environmental, health, economic, and social impacts However, PDP-Renewables still yield the best results in environmental, health, economic, and social impacts Confirm that, not only lower demand forecasting, the contribution of renewable energy is very crucial for the healthier solution Confirm that, not only lower demand forecasting, the contribution of renewable energy is very crucial for the healthier solution

Conclusions from Impact Analysis PDP-Renewables is the cleaner solution PDP-Renewables is the cleaner solution PDP-Renewables is the healthier option PDP-Renewables is the healthier option PDP-Renewables is a socially benefit PDP-Renewables is a socially benefit PDP-Renewables is a economically feasible choice PDP-Renewables is a economically feasible choice PDP-Renewables is a more secure and flexible investment option PDP-Renewables is a more secure and flexible investment option PDP-Renewables can stabilize and lower negative impacts from power generation and can be a good starting point for more renewable future PDP-Renewables can stabilize and lower negative impacts from power generation and can be a good starting point for more renewable future

Real-life Difficulties (1): Require new investment scheme

Real-life difficulties (2): Unfair pricing regulation Principle: “ the price for renewable power should at least equal to the avoided cost of electricity on the lower voltage grid plus a premium reflecting the renewables ’ social and environmental benefits Principle: “ the price for renewable power should at least equal to the avoided cost of electricity on the lower voltage grid plus a premium reflecting the renewables ’ social and environmental benefits Practice: 42% of renewable power producers get the lower rate than EGAT avoid cost Practice: 42% of renewable power producers get the lower rate than EGAT avoid cost Practice: Only 17% get the actual subsidy, but only for the first five years of their operations Practice: Only 17% get the actual subsidy, but only for the first five years of their operations

Real-life Difficulties (3): Grid Accessing Principle: All power producers should have equal right in accessing to the grid Principle: All power producers should have equal right in accessing to the grid Practice: Bottle-neck in the approval process makes delay in renewable investment Practice: Bottle-neck in the approval process makes delay in renewable investment Practice: Utilities require unnecessarily expensive interconnection investment Practice: Utilities require unnecessarily expensive interconnection investment Practice: After 1999, Industrial CHP does not allow to access to the grid, except Utilities’ own subsidiaries. Practice: After 1999, Industrial CHP does not allow to access to the grid, except Utilities’ own subsidiaries.

Real-Life Difficulties (4): Monopoly Governance Structure Four monopoly utilities control 90% of turnover in power industry. Four monopoly utilities control 90% of turnover in power industry. EGAT and PTT (gas company) set up their own largest IPPs, to play as private sector. EGAT and PTT (gas company) set up their own largest IPPs, to play as private sector. These utilities have their own authorities in approving power purchasing contract and requiring technical improvement. These utilities have their own authorities in approving power purchasing contract and requiring technical improvement. Thai government has a clear policy for privatization and eager for more profit from these utilities Thai government has a clear policy for privatization and eager for more profit from these utilities

Real-life Difficulties (5): Protect their vested interests

Critical Reflections and Policy as a Social Learning Process How do the study contribute to actual policy changes? How can we learn from this experience?

Methodology for Influencing and Reflecting Policy Changes Three Renewable Energy Policy Workshops (July 2005) Three Renewable Energy Policy Workshops (July 2005) The Energy Crisis and Energy Planning in Thailand The Energy Crisis and Energy Planning in Thailand Renewable Energy from Strategy to Reality Renewable Energy from Strategy to Reality Good Governance in Renewable Energy Development Good Governance in Renewable Energy Development Several Public Seminars and Press Conferences (2005/6) Several Public Seminars and Press Conferences (2005/6) An Assessment of Electricity Governance in Thailand An Assessment of Electricity Governance in Thailand Hidden Agenda of Energy Businesses in Power Development Planning Hidden Agenda of Energy Businesses in Power Development Planning Journalist Trips and Reports Journalist Trips and Reports Reflecting actual policy changes (until September 2006) Reflecting actual policy changes (until September 2006) Analyzing the key factors for changes (or un-changes) Analyzing the key factors for changes (or un-changes)

Various Policy Communication Activities

Policy Outcomes of three years attempts ( ) Desirable Changes Desirable Changes Stop EGAT privatization by the Supreme Administrative Court rule Stop EGAT privatization by the Supreme Administrative Court rule Revising of Demand forecasting and PDP2004 Revising of Demand forecasting and PDP2004 Stop RPS mechanism and introduce 7-years Adders for renewable power producers based on different renewable technologies Stop RPS mechanism and introduce 7-years Adders for renewable power producers based on different renewable technologies Expand VSPP scheme from 1 MW to 10 MW and re-open the market for CHP in 2006 Expand VSPP scheme from 1 MW to 10 MW and re-open the market for CHP in 2006 (After the study) The independent regulator will be established based the new Energy Act (2007) (After the study) The independent regulator will be established based the new Energy Act (2007) Undesirable Un-changes Undesirable Un-changes PDP2007 is not yet properly open for public participation, still no strategic impact assessment, and renewable energy is not yet a real strategic option PDP2007 is not yet properly open for public participation, still no strategic impact assessment, and renewable energy is not yet a real strategic option EGAT monopoly power structure remains EGAT monopoly power structure remains

Reflections from the study: Policy changes are occurred because The public is adequately informed and understand The public is adequately informed and understand The Inconsistency of Logic (e.g., private monopoly = efficiency???) The Inconsistency of Logic (e.g., private monopoly = efficiency???) The Logic of Inconsistency (e.g., private monopoly = private profit) The Logic of Inconsistency (e.g., private monopoly = private profit) Thai public takes serious action against specific government proposal, such as EGAT privatization Thai public takes serious action against specific government proposal, such as EGAT privatization The government faces with inevitable facts, such as over- demand forecasting The government faces with inevitable facts, such as over- demand forecasting New policy actors, such as group of renewable power producers, take the recommendations into policy actions, as seen in supporting for feed-in tariff New policy actors, such as group of renewable power producers, take the recommendations into policy actions, as seen in supporting for feed-in tariff Academic community can reach agreement in some policy recommendation, e.g. stop RPS mechanism Academic community can reach agreement in some policy recommendation, e.g. stop RPS mechanism

Reflections from the study: Limitation of Healthy Public Policy and Public Deliberation Several policy process are still close in their practices, such as PDP2007 Several policy process are still close in their practices, such as PDP2007 Thai Government still controls the tempo of policy process, including applying “non-action” policy (or NATO = No Action, Talk Only) Thai Government still controls the tempo of policy process, including applying “non-action” policy (or NATO = No Action, Talk Only) Unbalanced opportunities and influences between different policy actors and networks still remain Unbalanced opportunities and influences between different policy actors and networks still remain Public communication channels and public attentions are highly competitive among different societal issues Public communication channels and public attentions are highly competitive among different societal issues

A Case of PDP 2007: Nine Options with No (real) Alternatives Renewables contribute only 1,700 MW in all nine options All nine options consist of 4,000 MW nuclear energy No strategic impact assessment to support decision-making Only one public consultation with the military control The need to apply the real alternatives strategic impact assessment governance evaluation of PDP 2007 process

Integrated planning framework proposed to government and society

Limitations of the Study The power development plan with 15 years plan is still the short vision for long-term sustainable energy development. The power development plan with 15 years plan is still the short vision for long-term sustainable energy development. Impact Assessment, based on coefficients of power technologies, cannot cope with Impact Assessment, based on coefficients of power technologies, cannot cope with Specific health impacts for Thailand’s geographical conditions Specific health impacts for Thailand’s geographical conditions Future uncertainties of technology and knowledge Future uncertainties of technology and knowledge Focus on the value of “health” in policy process, which, in reality, must be compete with other societal values Focus on the value of “health” in policy process, which, in reality, must be compete with other societal values Since policy process in an endless game, desirable policy changes cannot be seen or evaluate within three years time. Since policy process in an endless game, desirable policy changes cannot be seen or evaluate within three years time. Therefore, this thesis does not provide the final answer, but proof that the healthier option is possible and beneficial. It can also be a good first step for sustainable energy future. Therefore, this thesis does not provide the final answer, but proof that the healthier option is possible and beneficial. It can also be a good first step for sustainable energy future.

Perspective on Better Power for Health The policy process is an endless game, further policy deliberation are essential to secure policy changes The policy process is an endless game, further policy deliberation are essential to secure policy changes The success of healthy public policy depends on three dimensions of its better power The success of healthy public policy depends on three dimensions of its better power In physical terms, the “sustainable power” with more renewable energy and energy efficiency is required In physical terms, the “sustainable power” with more renewable energy and energy efficiency is required In political terms, “more equal or balance power” among policy actors in policy process is essential to ensure all policy options will be fairly analyzed and assessed In political terms, “more equal or balance power” among policy actors in policy process is essential to ensure all policy options will be fairly analyzed and assessed In philosophical terms, “the society’s wisdom power” in deliberating towards the right end through the ethically right means is also crucial for the implementation of the first two dimensions of power In philosophical terms, “the society’s wisdom power” in deliberating towards the right end through the ethically right means is also crucial for the implementation of the first two dimensions of power

Thank You Very Much