Proposed Power Development Plan (PDP) 2012 - Palang Thai

Proposed Power Development Plan (PDP) 2012and a Framework for Improving Accountability and Performance of Power Sector PlanningSuch unexpected events though hard to predict are part of the reality of the economy. Their effect has been tothrow growth trajectory toward a path that has ended up being more linear or logistic shaped than exponentiallygrowing. Given the on-going uncertainties of world economy, domestic political environment and extreme climateevents, it is unrealistic to expect that forecast GDP and electricity demand will grow exponentially as predicted.The extent of over-optimism in demand projection becomes more apparent when we compare the projectedannual demand increase as assumed in the PDP 2010 with the historical records, as shown in Figure 3.Figure 3: Annual peak demand increase in MW: comparing the PDP 2010 projections with the past actual recordsand historical averages. The difference between the PDP 2010 forecast growth and the highest actual historicalaverage is about 660 MW in peak demand per year, equivalent to about one coal-fired power plant each year.As shown above in Figure 3, when averaged over the past 25 years, demand for electricity in Thailand has grownabout 830 MW per year. When averaged over 15 years, this shrinks to 813 MW per year. Over the past 10 years itdemand has grown only 772 MW per year, and the past 5 years have seen an average increase of only 407 MW peryear. In contrast, the PDP 2010 assumes average increase of 1491 MW per year. Considering the actual trend overthe past 25 years (lower and lower increases on average every year), it is conservative 4 to assume that long-termfuture demand for electricity increase at the 25 year average rate.In light of this track record, and the available data, the following revised assumptions are used in the demandforecast in the PDP 2012:AssumptionActual 2011 peak used as base for projectingfuture demandLinear demand growth, based on historical25-year average (830 MW/year)RationaleThe February 2010 PDP over-predicted 2011 peak demand668 MW.February 2010 forecast assumes uninterrupted exponentialgrowth, whereas historical growth has been essentiallylinear (with declining averages in past years) and there areuncertainties, such as world economic condition andextreme climate events that affect the Thai economy.Table 4: Ass umptions used in PDP 2012 demand forecast4By “conservative” we mean assumptions that will lead to extremely low likelihood of insuffi cient power plants available to meetelectricity load.12