Transition to an Electricity Market in Thailand: A Case for Asian Developing Countries

Abstract

Factors that drive reform of the electricity supply industry (ESI) in developing countries,especially in Asia are different in many important ways from those that do so in the West. Chiefamong these fundamental differences are (i) the maturity of the ESI structure, economic priority andthe role of the state in development, (ii) the need for the consolidation of a national grid which is ata relatively early stage of evolution, (iii) the directive role of government policy in key sectors of thenational economy and (iv) the way in which a power market should be designed. The inherited pre-reform organizational structures are also very different and this influences feasible post-reformoptions. This paper therefore proposes a transitional mechanism, criterion and synthesizes a modelof reform that is sensitive to these realities. The case of Thailand?s EGAT is used as the main referencepoint due to its medium size and orientation towards restructuring. Short sections on Sri Lanka,China and the ASEAN Power Grid Interconnection Project are included to broaden the relevance ofthe discussion. In addition, the impact of the proposed reform model on power system operation andthe other relevant issues are also presented.