ASEAN power policies will disrupt coal market<\/p>\n
TOKYO (AFP): Policy reforms in the electric power sectors of
\nthe Philippines, Indonesia, Thailand and Malaysia over the next
\ndecade and beyond will disrupt coal supply and demand across
\nAsia, a Japanese study shows.<\/p>\n
The study by the Institute of Energy Economics also warns that
\nthe entry of independent power producers, including those with
\nforeign capital, would eventually lead to higher electricity
\ncharges in both Indonesia and Thailand.<\/p>\n
The institute said "various problems and upheavals" would
\noccur as the independents moved into the electric utility sectors
\nof the four biggest members of the Association of Southeast Asian
\nNations (ASEAN).<\/p>\n
Projects involving independent producers not linked to
\nexisting government corporations are expected to account for 30
\npercent of power-generating capacity in Indonesia, Thailand and
\nMalaysia by early next decade.<\/p>\n
In the Philippines, where such projects are being introduced
\nat a more rapid pace, the ratio is expected to reach 40 percent,
\nrising to 60 percent by 2005.<\/p>\n
"Demand for coal is projected to show a rapid increase, mainly
\nin Indonesia and the Philippines, while large-scale imports of
\nforeign coal in and after 2005 are planned in Thailand," the
\ninstitute said.<\/p>\n
Import<\/p>\n
All three countries plan to import from Indonesia and
\nAustralia. At the same time, growing demand for coal is projected
\nin Japan and the newly-industrialized economies of South Korea,
\nTaiwan, Hong Kong and Singapore.<\/p>\n
"It is feared that demand for coal for power generation, which
\nis expected to expand rapidly in the future, will have a
\nconsiderable adverse effect on coal supply and demand in the
\nAsian region at large," the study warned.<\/p>\n
Of the four countries, Indonesia is expected to show the
\nsharpest increase in demand with consumption projected to jump
\nfrom five million tons in 1993 to about 17 million tons in 1998
\nand almost 35 million tons in 2003.<\/p>\n
Consumption in the Philippines is forecast to soar from about
\none million tons this year to more than 12 million tons in 2000
\nand about 17 million tons in 2005, the institute said.<\/p>\n
Thailand's coal consumption -- excluding that by the
\nindependents -- is seen rising from 12 million tons to 15 million
\ntons and 17 million tons in the same period. Malaysia's
\nconsumption is meanwhile expected to double from about three
\nmillion tons in 1995 to six million tons in 2000.<\/p>\n
At the same time, oil demand is projected to decline gradually
\nin all four ASEAN economies with the consumption in 2000 expected
\nto be almost half the 1995 level. Demand for oil may recover
\nlater, although this depends on power demand and how far
\nindependent producers can penetrate local markets.<\/p>\n
As for electricity charges, the institute noted that
\nIndonesia's independent producer wholesale prices had been set at
\nbetween U.S. 6.5 cents and 8.5 cents a kilowatt hour. While on a
\ndowntrend, this is higher than the electric power corporation's
\naverage retail price of 6.2 cents a kilowatt hour.<\/p>\n
Indonesia's electricity charges have been kept low at the
\nretail level for political reasons but prices are expected to be
\nraised in the future, an "unavoidable" development if independent
\nproducers are to expand.<\/p>\n
"Under such circumstances, however, the government finds
\nitself under the necessity of allowing the uptrend of the retail
\nprice from a long-term perspective," the study said. "This need
\nis based on the viewpoint that sufficient power supply -- even at
\nhigh prices -- is preferable to shortages."<\/p>\n
In Thailand, "the electricity retail price may remain stable
\nover the short term but it is also bound to move upward on a
\nlong-term basis," the institute said, pointing to the increasing
\nactivities of independent producers.<\/p>\n
Such a scenario raises the problem of adjusting the country's
\nnew power rate system within the current system, the institute
\nsaid.<\/p>",
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