University of Technology, Sydney. Faculty of Engineering and Information Technology.Prompted by the concerns about the poor performance of the Thai electricity industry, the
Thai government initiated, in the year 1992, a process of reform of the electricity industry.
The reform, argued its proponents, would improve industry performance and provide
economy-wide benefits. A comprehensive analysis developed in this research - employing a
combination of analytical methodologies, including historical analysis, Data Envelopment
Analysis (DEA), input-output analysis, and inferential analysis - has demonstrated that
electricity reform has largely failed to achieve its objectives. For example, electricity reform
has neither noticeably improved industry performance nor provided any appreciable benefits
to the wider economy. This is because the reform program has tended to focus almost
exclusively on industry privatization; the accompanying structural and regulatory changes
have been limited to the extent that they support privatization. Further, it appears that only
financial dimension of reform has received attention and that other dimensions (i.e., social
and environmental) have largely been ignored. This narrow focus, this research argues, has
its roots in several internal and external developments and influences, for example, pressures
from the international financial institutions, major economic crises, political factors ,
institutions, and other interests. This narrowly-focused reform program, therefore, could not
produce desirable outcomes as was expected.
This research identifies some remedies that might be needed in order to improve the efficacy
of the present reform program. For this purpose, three alternative reform models (PDP, IPP,
and GE) are proposed and their consequences analyzed, through the application of DEA and
input-output analysis, for the period 2010-2020. These analyses suggest that the GE
scenario, which promotes Small Power Producers (SPPs) generating electricity from
renewable sources and envisages import of hydroelectricity from the neighbouring countries,
would be an attractive option for Thailand. This is due mainly to its ability to provide a
balanced redress for energy, environmental, economic, social, and industry performance
objectives. Whether or not such redress will eventuate will however depend - to a large
extent - on the efficacy of the 'new' institutional arrangements including industry structure,
ownership and regulation. This argument is based on the premise that the existing
institutional arrangements are deficient and hence unsuitable to provide a balanced redress
referred to above.
Against this backdrop, this research proposes a n1odified reform approach for the Thai
electricity industry. The key features of the proposed reform approach include a fill
unbundling of the generation and transmission functions of Electricity Generating Authority
of Thailand (EGAT), allowing the Independent Power Producers (IPPs) to also establish
small-scale power plants, promoting increased participation by SPPs and Very Small Power
Producers (VSPPs), disaggregating the Provincial Electricity Authority (PEA) into four
regional distributors, and ensuring transparency and autonomy of the regulatory body. This
research also proposes some strategies that could be adopted in order to overcome the
challenges that are likely to emerge when the proposed reform model is implemented. The
proposed reform approach, this research contends, will provide a robust pathway to meet the
future electricity needs of Thailand. This is due to the fact that it accords with the economic,
environmental, social, and political realities in Thailand. Further, it is contended that this
research has made a valuable contribution in terms of developing policy insights that should
provide a sound basis for furthering the reform of the Thai electricity industry - an issue of
immense contemporary policy significance for Thailand
