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Competition law and sectoral regulation on Competition law and sectoral regulation on Thai energy sector: A review and the Thai energy sector: A review and the forward development planforward development plan
Pornchai WisuttisakPornchai WisuttisakAdmitted as a lecturer in law at Law faculty, Admitted as a lecturer in law at Law faculty,
Chiangmai University, ThailandChiangmai University, ThailandPhD Candidate and casual tutor, School of Business Law and Taxation, PhD Candidate and casual tutor, School of Business Law and Taxation,
University of New South Wales, AustraliaUniversity of New South Wales, Australia
CUTS International conference on Reviewing the Global CUTS International conference on Reviewing the Global Experience with Economic Regulation: A Forward Looking Experience with Economic Regulation: A Forward Looking
Perspective- New Delhi on April 18-20, 2011Perspective- New Delhi on April 18-20, 2011
Thailand Country: Thailand Country: OverviewOverview
Region : South East Asia Region : South East Asia Population: Population: 6666..5151 million million Area: 513,115 sq km ( India has territory Area: 513,115 sq km ( India has territory
at nearly 3.3 million sq km)at nearly 3.3 million sq km) GDP per capita: approx US $8.2billionGDP per capita: approx US $8.2billion
Synopsis of the Synopsis of the presentationpresentation
1. Thai energy sectors : Liberalisation and 1. Thai energy sectors : Liberalisation and market reformmarket reform
2. Problems on Thai Competition law and 2. Problems on Thai Competition law and Energy sector regulationEnergy sector regulation
3. Plan for reform on competition law and 3. Plan for reform on competition law and sectoral regulation: the short and long term sectoral regulation: the short and long term proposal proposal
1. Thai energy sectors: Liberalisation 1. Thai energy sectors: Liberalisation and market reformand market reform
Liberalisation on electricity Liberalisation on electricity sector sector Permitting private participant of SPP and IPPPermitting private participant of SPP and IPP
Establishment of two large IPPs are Electricity Establishment of two large IPPs are Electricity Generating Company Limited (EGCO) and Generating Company Limited (EGCO) and Ratchaburi Electricity Generating Holding Ratchaburi Electricity Generating Holding Public Co., Ltd (RATCH)Public Co., Ltd (RATCH)
The two IPPs still under control of The two IPPs still under control of Electricity Electricity Generation Authority of Thailand (EGAT) Generation Authority of Thailand (EGAT) ( SOE)( SOE)
Master plan electricity Master plan electricity liberalizationliberalization
Cancelation of the Master Cancelation of the Master PlanPlan
Taksin’s government tried to liberalise electricity Taksin’s government tried to liberalise electricity without a structural changewithout a structural change
The plan created uncompetitive electricity The plan created uncompetitive electricity market and deriving state monopoly market market and deriving state monopoly market power to privatised EGATpower to privatised EGAT
The plan was then challenged by the Federation The plan was then challenged by the Federation of Thai consumers in the Supreme Administrative of Thai consumers in the Supreme Administrative court casecourt case
Liberalisation on oil and Liberalisation on oil and gas sector gas sector
NEPO also proposed plans to liberalise gas by NEPO also proposed plans to liberalise gas by deregulation of the gas sectors and privatisation deregulation of the gas sectors and privatisation of the Petroleum Authority of Thailand (PTT)of the Petroleum Authority of Thailand (PTT)
The set framework was mainly focus on the open The set framework was mainly focus on the open and disintegration of gas pipeline and and disintegration of gas pipeline and distributiondistribution
Master Plan for Oil and Master Plan for Oil and Gas liberalization Gas liberalization
Inconsistency of Inconsistency of implementationimplementationThe government implemented the PTT The government implemented the PTT
corporatisation without, steps 1) and 2)corporatisation without, steps 1) and 2)Implement only 3) by corporatisation PTT via Implement only 3) by corporatisation PTT via
IPO in Thai Stock market IPO in Thai Stock market PTT monopoly of gas and oil market after the PTT monopoly of gas and oil market after the
corporatisationcorporatisationChallenged in the Supreme administrative court Challenged in the Supreme administrative court
casecase
Supreme Administrative Supreme Administrative Court decisionsCourt decisions
CurrentCurrent energy market energy market structurestructure
Monopoly gas supply Monopoly gas supply
Gas is the major sources of electricity generationGas is the major sources of electricity generation
1313
Thai Electricity generation in 2008Thai Electricity generation in 2008
GasGas 700. 700. %%
DieselDiesel 02 02
%%Import from Import from MalaysiaMalaysia
03 03 %%
Import from Import from Laos Laos 1 .61 .6 %%
HydroHydro47.47. %%
LigniteLignite126.126. %%
OilOil10.10. %%
Import coal Import coal 8822%%
Renewable energyRenewable energy14.14. %%
Source: Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai language) 2007).
14
National plan on sources of electricity generationNational plan on sources of electricity generation
MillionMillion
4%4% 4%4% 4%4% 3%3% 3%3% 3%3% 3%3% 3%3% 3%3% 2%2% 2%2% 2%2% 2%2%
73%73% 70%70% 69%69% 67%67% 69%69% 68%68% 69%69% 65%65% 61%61% 62%62% 63%63% 61%61% 60%60%
11%11% 11%11% 11%11% 10%10%9%9%
9%9%8%8% 8%8% 7%7%
7%7%7%7% 6%6% 6%6%
8%8% 8%8% 9%9% 10%10%10%10%
11%11%11%11% 15%15%
19%19%18%18%
17%17%16%16% 15%15%
10%10%10%10%9%9%
9%9%
8%8%
7%7%7%7%
6%6%
6%6%7%7%
6%6%5%5%
5%5%3%3%2%2%
2%2%
2%2%
2%2%
2%2%
3%3%3%3%
3%3%2%2%
2%2%2%2%
ปี�ปี�Source: Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai language) 2007).
15
Electricity generators’ market sharesElectricity generators’ market shares
EGATEGAT1515,021.0 MW,021.0 MW 55 0.3%0.3% IPPIPP
12,151.6 MW12,151.6 MW 40.7%40.7%
SPPSPP2,079.1 2,079.1 MWMW 77..0%0%
Import from Import from MalaysiaMalaysia
300300 MW MW 11 ..00 %%
Import Import from Laos from Laos 340340 MW MW 11 ..11 %%
EGAT hold majority share of two largest IPP (Ratchaburi Electricity Generating Holding PCL and Electricity Generating Company Limited )
Source: Source: RATCH (2009) Ratchaburi Electricity Generating Holding Public Company Limited (RATCH) annual report 2008. RATCH p 60 and EGCO (2009) Corporate Presentation Quarterly Financial Results Ended 31 March 2009. EGCO p 5
Source: Source: EPPO, 'Summary of the Conference Proceeding on the Thai electricity Development Plan' (Paper presented at the Thai Electricity Development Plan 2007-2020 (Translated from Thai language) 2007).
16
PTT Business chains in oil and GasPTT Business chains in oil and Gas
2. 2. Problems on Thai Problems on Thai Competition law and Energy Competition law and Energy sector regulationsector regulation
Thai competition lawThai competition law
Thai Energy sector regulationThai Energy sector regulation
Problems on Thai competition lawProblems on Thai competition law
Institution problems on Thai Institution problems on Thai competition lawcompetition law
Influence from government and business Influence from government and business lobbylobby
Financial constraint Financial constraint Lack of expert Lack of expert Lack of coordination with sectoral regulationLack of coordination with sectoral regulation
The Competition law The Competition law exemption and limited exemption and limited role on energy sectorrole on energy sector
EGAT, MEA, PEA, and PTT, Pcl EGAT, MEA, PEA, and PTT, Pcl are SOEsare SOEs
Problems on Thai competition Problems on Thai competition law( cont)law( cont)
Problems on Thai Energy Problems on Thai Energy regulation regulation ERC institutionERC institutionEnergy regulation and the Conflict between Energy regulation and the Conflict between
supporting SOEs and promoting market supporting SOEs and promoting market competitioncompetition
Lack of rule for open to access to essential Lack of rule for open to access to essential facilities or third Party access on electricity facilities or third Party access on electricity infrastructureinfrastructure
Problems on Thai Energy Problems on Thai Energy regulation (cont)regulation (cont)
http://www.erc.or.th
Conflict between supporting SOEs and Conflict between supporting SOEs and promoting market competition promoting market competition
section 7(3) of Energy Industry Act states that ERC has to section 7(3) of Energy Industry Act states that ERC has to promote competition in the energy industry and prevent promote competition in the energy industry and prevent abusive use of dominance in the energy industryabusive use of dominance in the energy industry
section 8(5)states that ERC has to support and maintain SOEs section 8(5)states that ERC has to support and maintain SOEs as monopoly enterprisesas monopoly enterprises
Problems on Thai Energy Problems on Thai Energy regulation (cont)regulation (cont)
No access to essential No access to essential facilities in the Energy Actfacilities in the Energy Act
Problems on Thai Energy Problems on Thai Energy regulation ( cont)regulation ( cont)
3. Plan for reform on 3. Plan for reform on competition law and sectoral competition law and sectoral regulationregulation
Short term plansShort term plans ERC action on market competitionERC action on market competition Build public recognition on competition Build public recognition on competition
lawlaw Advocacy between competition law and Advocacy between competition law and
the sector regulation the sector regulation
Long term strategyLong term strategy Establishment of National Competition Establishment of National Competition
CouncilCouncil Reform on Thai Energy sectoral Reform on Thai Energy sectoral
regulation regulation Reform on Thai competition lawReform on Thai competition law Establish formal and effective work Establish formal and effective work
coordination between competition law coordination between competition law and sectoraland sectoral
ConclusionConclusion
Inappropriate liberalizationInappropriate liberalizationCurrent uncompetitive structure under Current uncompetitive structure under
SOEs monopolySOEs monopolyProblems on Thai competition lawProblems on Thai competition lawProblems on Energy regulationProblems on Energy regulationShort- term planShort- term planLong- term planLong- term plan
धन्यवा�द Thank youThank you
Kob Khun KrubKob Khun Krub
Pornchai WisuttisakPornchai WisuttisakContact No. +61 433 223 618Contact No. +61 433 223 618