For the first time in decades, Thailand is facing an electricity reserve margin of just 4 percent which may lead to country-wide blackouts in the near future, Thai industrial sources say.

There is high probability that Thailand's energy security system could be effected over the next 3-years (2004-2006) since the electricity production capacity of the Electricity Generating Authority of Thailand (Egat) is 20,500 Mega-Watt, while current demands for electricity is reaching peak levels of 19,325 Mega-Watt at some moments, or only a electricity reserve of 4 percent.

A spokesman at Thailand's Ministry of Energy said that during 2004-2006 period, no new power plants would enter into the Kingdom's energy system with the exception of the BLCP Power Plant, the 1,400 Mega-Watt coal-fired power plant owned by Banpu Plc and Hong Kong based CLP Power.

BLCP is likely to be able to start supplying electricity at the end of 2006. The peak demand for electricity is projected to increase by 7-8 percent a year or at a rate of about 1,000 Mega-Watt annually and will surely surpass 20,000 Mega-Watt in the year 2005, the Ministry source said.

The decline in electricity production capacity of Egat is derived from the fact that most of Thailand's existing power plants are more than 25-years old and will be gradually phased out from the current system.

The new power plants, such as BLCP, Hin Grude and Bor Nok, including extension of life-span of Egat's existing power plants will be completed and will start supplying electricity into the system in late 2006.

According to the Ministry source, the first sign of coming power shortages and blackouts was witnessed on 26 March 2004 with more than 2-hour blackout of Ayudhya province, caused by a emergency shutdown, due to a natural gas leak, of the Wang Noi power plant in Ayudhya province.

The blackout took place in the afternoon, at a time when electricity consumption is at its highest and Egat had to use its reserve of an old power plant to produce electricity but the aging plant took more than two hours to warm up its turbines.

The source pointed out that power shortages normally occurs during the summer months, due to exhausted water reserves in dams, which power the hydroelectricity plants, hence reducing the electricity production capacity of Thailand.

The current average lifespan of Egat's main power plants is 20 years, while the general effective power plant will be used up to not more than 25-30 years. This means that several power plants in Thailand will be retired in the near future and Egat will have only two options left-to produce more power, or by extending the lifespan of existing plants or by building new power plants.

The Ministry source said that the Energy Policy and Planning Office (EPPO) had in 2002 already recommended that Egat should not delay the timeframe for the Bor Nok and Hin Grude plants to supply electricity into the system in 2007-2009 from the original target of 2004-2006. EPPO said Egat's existing power plants are too old and this will lead to a problem of shortage of power plants between 2004 and 2006 since the building up of new plants take several years to complete..

Egat's board of directors has approved a plan to buy 300 Mega-Watt of electricity from Malaysia as a part of its effort to solve Thailand's power shortage problem.

As a secondary option, Egat's board of directors also agreed a plan to connect private power plants with the national Egat's system starting from 2006 with an aim to gain about 500 Mega-Watt of electricity supplied by private owned power plants.

The source also noted that using old diesel and bunker oil-fueled power plants to generate electricity at peak moments is very expensive and could lead to a problem of very high electricity rates.

However, Egat deputy governor Silchai Thirawat projects that this year's peak demand for electricity would be 19,700MW and the figure is projected to increase to 21,143MW in 2005 and 22,400MW in 2006.

He said Egat will try to ensure that it will be able to have sufficient electricity supply by including the co-stand by power plants into Egat's electricity production system during 2005-2006 in order to wait for the 1,400 Mega-Watt of electricity from the BLCP plant scheduled to supply power in the system in late 2006. He added that by doing this, there should probably be no blackouts over the next three years to come.