Source - The Nation Website
September 22, 2006

Thai power producer Electricity Generating Plc (Egco) has won a
concession worth US$700 million (Bt26.18 billion) to construct and operate
yet another power plant on the Theun River in Laos.
It will be the third generating plant involving the Mekong
tributary, each of them either selling or contracted to sell electricity to
Thailand.

Egco, as part of an international consortium that includes
Italian-Thai Development Plc, began building the Nam Theun 2 dam last
November. It is due to begin supplying electricity to Thailand and Laos in
the second half of 2009. Its construction and the creation of a
450-square-kilometre lake on the Khammouane Plain brought an international
outcry from conservationists.

Thailand began buying electricity from the first Theun River
hydroelectric project, called Theun Himboun, in 1998.

The new project, called Nam Theun 1, will be built downstream from
the controversial Nam Theun 2, in the heart of Laos and 160km from the
capital, Vientiane.

The deal struck by Egco involves building the dam and operating it
for 27 years, with a contract to sell power to Thailand. The plant will have
a total capacity of 523MW and is due to begin production in 2013.

Egco said it expected to finalise funding for the construction by
the end of next year and intended to use the same construction and
environmental standards it was employing for Nam Theun 2 as a model.

Senior executive vice president for asset management and planning
Somyos Polachan said the Thai Energy Ministry and the Electricity Generating
Authority of Thailand (Egat) recently acknowledged Egco's proposal on
electricity prices for construction of the new plant.

Egco has teamed up with Malaysian construction giant Gamuda Bhd
and the Lao government for a 40:40:20 investment ratio, respectively, and
will reserve $700 million for the construction budget. The project will take
five or six years to complete and is expected to deliver its first
electricity in 2013.

Somyos said the Nam Theun 1 power plant would be of great benefit
to both Thailand and Laos. The Lao government will receive revenues in
accordance with the ratio of concession, tax and dividends throughout the 27
years of the agreement, while Thailand will enjoy a reduced risk of
depending on other fuels for electricity generation.

At present, most power plants in Thailand burn natural gas to
generate electricity, which results in increased production costs, because
of rising oil prices. When comparing the production costs of natural gas,
oil and hydroelectric power, the last one has a lower cost and is not
affected by fluctuating oil prices. Somyos said this enabled supply
authorities to forecast future electricity prices more accurately.

Source: http://www.nationmultimedia.com

 

 

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