Energy security is a significant public policy issue that conjures fears and anxieties about reliability of future supplies and uncertainties in the way markets behave. For most developing countries, security of supply means the level of confidence with which they can expand their supply in line with their economic growth. For some, this may be accompanied by an increasing demand for imported energy and investment in import infrastructure in their single-minded pursuit of high economic growth. More or less, this describes the situation of Thailand, which is currently faced with the problem of sinking deeper into a state of energy dependency on its immediate neighbours and countries in the Middle East. The country's continuing growth in energy consumption is out-stripping the modest fossil fuel resources available within its borders. But the scenario analysis presented in this paper shows that Thailand still has options that it can take advantage of, which consist of straight technological interventions and political ones.
Based on the input assumptions of the analysis, natural gas remains a dominant fuel in all scenarios. This has two separate features to it. Firstly, Thailand does not possess large reserves of natural gas and therefore it would need to enter into mutually agreeable long-term arrangements with its neighbours and other suppliers. Secondly, the heavy reliance on natural gas means that electricity generation will remain an important emitter of carbon into the foreseeable future. Although all three scenarios show an improvement in carbon intensity (tonnes/MWh) resulting from the combination of improvements in natural gas technology and replacement of coal-fired plants with natural gas and renewables, the sheer volume of projected electricity demand during the study period will mean total emissions will rise in both BAU and NNC scenarios.
The exception to the observation above is the GF scenario, which registers lower CO2 emissions at the end of the study period (2022) compared to the base year (2002). What is remarkable about this result is that this seems to be occurring by diversifying the country's fuel mix to include resources that are locally available (e.g. biomass, wind and solar). Moreover, these important gains are happening at a marginally higher cost than the BAU scenario without taking into account the costs associated with CO2 emissions. There may also be opportunities in the world of carbon trading. The mechanisms for CDM are there but still being debated 10 years after Kyoto came into being on issues of allocation and accounting. At present, there appears little in the way of incentives for investment in CO2 reduction given that developing countries are not required to adopt GHG reduction targets under the Kyoto Protocol, although some countries such as India, the Philippines and Brazil have taken proactive steps towards entering the CDM market. The wisdom of pursuing cleaner electricity pathways in Thailand are however influenced more by local impacts than global issues, and enthusiasm for CDM projects in Thailand remains low. Further analysis shows that in the NNC and GF scenarios, SO2 emissions are significantly reduced, which implies both direct and indirect improvements in the health of communities surrounding decommissioned coal-fired power stations. Furthermore, the secondary, but still important benefits of pursuing cleaner electricity pathways in Thailand should not be under-estimated. Other factors include new business opportunities, employment and expertise that could potentially bring enormous commercial opportunities from the ASEAN region and beyond as these ‘alternative’ technologies begin to force their way into the mainstream energy market.
Although, there is an enormous uncertainty about what the post-Kyoto agenda will look like once the current protocol expires in 2012, there is a growing global consensus that urgent action is needed in reaching lasting and meaningful agreements in climate negotiations. Many believe that the US position will have changed in 2012 with the likelihood that developing nations—exempted from emission cuts under Kyoto may come under increased pressure to set goals for ecologically sound development aims, including setting national emissions targets. If indeed this happens, the low carbon options in power generation will begin to assume a critical role and begin to deliver on the promises they hold towards a low carbon future.