Electricity Industry Reforms in Thailand: A Historical Review

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Journal Article
GMSARN International Journal, 2008, 2 (2), pp. 41 - 52
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The Thai Electricity Supply Industry (ESI) has been undergoing reform since the early 1990s. The first stage of reform resulted in the introduction of Independent Power Producers (IPPs) and Small Power Producers (SPPs) programs. This was followed by, in the mid-to-late 1990s, a proposal to introduce a market-oriented reform. This reform program envisaged the separation of generation from transmission and distribution functions; introduction of competition in generation; development of new market-oriented regulatory arrangements, and the privatization of the industry. This reform, argued its proponents, will improve the efficiency of the electricity industry; lower electricity tariffs; improve quality of service; draw private investment into power generation sector; reduce the governments investment burden of financing expensive electricity infrastructure and hence enhance its capacity for investing in other priority programs such as health, education and other social activities. This paper examines the veracity of these arguments. This examination is assisted by a historical review of the evolution of the Thai Electricity Supply Industry (ESI). This review reveals that the above noted arguments are unsupportable on the basis of the technological, economic, environmental, social and political realities prevalent in Thailand. This paper further emphasizes the need to clearly identify the `real rationale for reform so that an appropriate reform pathway consonant with socio-political contexts in Thailand could be selected.
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