Thailand Stock Market Roadshow January 21-25, 2003 · PPA Tariff Structure • Tariff is designed...
Transcript of Thailand Stock Market Roadshow January 21-25, 2003 · PPA Tariff Structure • Tariff is designed...
Thailand Stock Market RoadshowThailand Stock Market RoadshowThailand Stock Market RoadshowThailand Stock Market RoadshowJanuary January 2121--2525, , 20032003
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AgendaAgendaAgendaAgenda
�� RATCH OverviewRATCH Overview
�� Power IndustryPower Industry
�� Benefits of Interest ReductionBenefits of Interest Reduction
�� Operating PerformanceOperating Performance�� Operating PerformanceOperating Performance
�� Investment Consideration Investment Consideration �� Investment Consideration Investment Consideration
�� AppendixAppendix�� AppendixAppendix
RATCH OverviewRATCH OverviewRATCH OverviewRATCH Overview
The CompanyThe CompanyOwnership StructureOwnership Structure 5Ownership StructureOwnership Structure
• RATCH has been set up as a holding EGAT45% Public 34.05%• RATCH has been set up as a holding company with the primary objective of seeking investments in attractive power generating assets in order to
EGAT
EGAT Provident Fund GSB*
45% Public 34.05%
Banpu Grouppower generating assets in order to enhance shareholders’ value.
• Ratchaburi Electricity Generating
14.99%
Fund
3.34% 2.62%
• Ratchaburi Electricity Generating Company Limited (“RATCHGEN”) is a project company which will acquire Ratchaburi power plant from EGAT.
RATCH
100%Ratchaburi power plant from EGAT.
• RATCHGEN’s main objective is to operate the power plant to maximize
RATCHGEN
100%
operate the power plant to maximize its full potential.
• EGAT will hold a significant stake in • EGAT will hold a significant stake in RATCH.�
*GSB = Government Saving Bank*GSB = Government Saving Bank
The CompanyThe CompanyTop Ten Largest ShareholdersTop Ten Largest Shareholders 6Top Ten Largest ShareholdersTop Ten Largest Shareholders
The Company’s top ten largest shareholders as at April 2,2002.The Company’s top ten largest shareholders as at April 2,2002.
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Source: Thailand Securities Deposition Company Limited
RATCHGEN PROJECTRATCHGEN PROJECT7
RATCHGEN PROJECTRATCHGEN PROJECT
Generating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’sGenerating Capacity Comparison of RATCHGEN and Country’s
Capacity (MW)
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������ 12.38%14.61 %
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12.38%
Electricity GeneratingElectricity Generating CapacityCapacity 33,,645 645 MW. MW.
• TH Unit 1 735 MW.
Oct-00 Apr-02 Nov-02
Transferring of TH & CC Power Plants Transferring of TH & CC Power Plants • TH Unit 1 735 MW.• TH Unit 2 735 MW.• CCGT Block 1 725 MW.• CCGT Block 2 725 MW.
Transferring of TH & CC Power Plants Transferring of TH & CC Power Plants
Source: EGAT PDP Source: EGAT PDP 20012001
• CCGT Block 2 725 MW.• CCGT Block 3 725 MW.
Appendix:Appendix:MiniMini Hydro ProjectsHydro Projects 8MiniMini Hydro ProjectsHydro Projects
Project Contract Structure
*��������� ���
RATCH
RE EGATEGAT OMAPPA RE EGATHydro Operating Unit
EGATPower Purchaser
PPA
Mini Hydro Projects
• All commercial contracts i.e. Power Purchase Agreements (PPAs) and Operation and
Maintenance Agreement (OMA) have been structured to mitigate project risk
• 25 years non-firm SPP with tariff structure at Baht 1.68 per unit plus incentive of Baht 0.20
per unit from Energy Conservation Fund for the next 5 yearsper unit from Energy Conservation Fund for the next 5 years
RATCH Overview:RATCH Overview:Power Purchase AgreementPower Purchase Agreement 9Power Purchase AgreementPower Purchase Agreement
• Thermal Units and Combined Cycle Units have separate ���year PPAs.
PPA Tariff StructureUnits have separate ���year PPAs.
• Tariff is designed to cover all operating and financing costs and yield an equity Fixed O&M Costs FX/ Inflation
Adjustmentsand financing costs and yield an equity IRR of ��6�
• Revenues are from Availability Payments (“AP”) and Energy Payments
Availability Payment
Availability Factor
Debt Services
Adjustments
Interest Indexation
Return on EquityPayments (“AP”) and Energy Payments (“EP”).
• AP (Baht/MW/month) - includes fixed
Availability Factor Return on Equity
RATCHGENEGAT
• AP (Baht/MW/month) - includes fixed operation and maintenance expenses, debt servicing, and return on equity.
• AP is�payable irrespective of whether
Variable O&M Cost
Fuel Cost
Inflation Adjustments
Efficiency Factor
Energy Payment
• AP is�payable irrespective of whether electricity is dispatched or not as long as plants are available
Source : RATCHGEN
Fuel Cost Efficiency Factor
• EP (Baht/MWh) - includes fuel costs and variable operation and maintenance costs with inflation indexation and pass through mechanism.
Source : RATCHGEN
through mechanism.
RATCH Overview:RATCH Overview:Debt StructureDebt StructureDebt StructureDebt Structure
• Largest ever Baht project financing transaction in Thailand and one of the transaction in Thailand and one of the largest in Asia.
• Debt structure divided into:Tranche A
Lead Arrangers
Tranche A Term loan of Baht ��,����million Tranche B Working capital facility of Baht �,����
Tranche ABaht 42,500 MM.
�Tranche A1 - Baht 18,475 MM
Working capital facility of Baht �,����million
• The tenor of Tranche A and Tranche B is approximately �3 years.
Tranche A2 – Baht 18,716 MMl
� Tranche A3 –Baht 5,309 MM
approximately �3 years.• The interest rate of Tranche A is the
Minimum Lending Rate (“MLR”) and for Tranche B is the Minimum Overdraft
Tranche BBaht 1,500 MM
Tranche B is the Minimum Overdraft Rate (“MOR”).
• Foreign currency risk mitigated as all debt financing has been arranged in Baht. 21 August
9 Oct
2000 Loan
31 Oct
2000 1st
18 April 2002 2nd
1 Nov 2002 3rd
debt financing has been arranged in Baht.• Interest rate risk mitigated as it is passed
through the tariff.
21 August 2000 Term
sheet signed
Loan document
s signed
1st debt drawdow
n
2nd debt drawdow
n
3rd debt drawdow
nSource : RATCHGEN
ed
RATCH Overview:RATCH Overview:Operation and MaintenanceOperation and Maintenance 11Operation and MaintenanceOperation and Maintenance
• EGAT will operate and maintain RATCHGEN under the Operation and Maintenance (OMA).
Maintenance Schedule
• The OMA will expire in year 2010, one year from the completion of the first major maintenance of the last Combined Cycle Block transferred.
Thermal Generating Units No. of days Once everyWarranty Inspection - normal 40 -Minor Inspection 40 3 yearsMajor Overhaul 57 6 years
Combined Cycle Block transferred.
• Extended by mutual agreement between RATCHGEN and EGAT.
Combined Cycle Generating Units No. of days Once everyGas TurbinesGT Warranty Inspection - normal 26 -GT Combustion Inspection 15 1.5 yearsbetween RATCHGEN and EGAT.
• Scope of work covers routine operation and maintenance, provision
GT Combustion Inspection 15 1.5 yearsGT Minor Inspection 30 6 yearsGT Major Overhaul 52 6 years
Steam TurbinesST Warranty Inspection - normal 26 -operation and maintenance, provision
of major maintenance services and additional repair services.
Source : RATCHGEN
ST Warranty Inspection - normal 26 -ST Minor Inspection 26 3 yearsST Major Overhaul 49 6 years
• EGAT personnel experienced in commissioning and operating Combined Cycle and Thermal Power Plants.
Source : RATCHGEN
Plants.
The Power Plant :The Power Plant :Facilities DescriptionFacilities Description 12Facilities DescriptionFacilities Description
• Located on -....��acres of land in • Located on -....��acres of land in
Ratchaburi Province, -��KM from
Bangkok, .�KM from Ampur Muang .�
Ratchaburi, and ��KM from Mae Klong
river.
• RATCHGEN’s total generating capacity
is ,(���MW. With combined capacity of
1,470 MW�for two thermal units and 1,470 MW�for two thermal units and
three Combined Cycle Units of 2,175
MW, RATCHGEN is Thailand's largest
and most advance private power
producer in Thailand
• The existing facility can support future • The existing facility can support future
expansion of upto �����MW.
Power Plant & FacilitiesPower Plant & FacilitiesThermal Power PlantThermal Power Plant 13Thermal Power PlantThermal Power Plant
Generator Transmission Line
TransformerSteam Turbine
Transformer
Stack
Heat Exchanger
Condenser
Fan
Condenser
Dearator
Flue GasDesulferization
FGD
Fan BoilerEconomizer
Cooling TowerDearator
Economizer
ReservoirWater Treatment Plant ReservoirWater Treatment Plant
Power Plant & FacilitiesPower Plant & FacilitiesCombined Cycle Power PlantCombined Cycle Power Plant 14Combined Cycle Power PlantCombined Cycle Power Plant
Steam Generator
Heat Recovery Steam Generator (HRSG)
Transmission Line
Gas Turbine
Steam Generator
DearatorNatural Gas Inlet Value
Generator
Condenser
Transmission LineGenerator
Transformer
Stack CondenserTransformer
Generator
Cooling Tower
StackNatural Gas Inlet Value
Gas Turbine
Water PumpTransmission Line
Gas Turbine
Stack Water TreatmentPlantTransformer
Generator
ReservoirHeat Recovery Steam
Generator (HRSG)Generator (HRSG)
RATCH Overview:RATCH Overview:Gas Sales Agreement (“GSA”)Gas Sales Agreement (“GSA”) 15Gas Sales Agreement (“GSA”)Gas Sales Agreement (“GSA”)
• Natural gas supplied by PTT will be sourced from gas fields in Myanmar.
Gas Pipeline System
sourced from gas fields in Myanmar.
• Aggregate proven reserves of .�trillion cubic feet exceeds gas consumption over cubic feet exceeds gas consumption over PPA term.
• Terms of the GSA will be requirement-• Terms of the GSA will be requirement-based with PTT subject to reasonable endeavors obligation.
• EGAT will be responsible for minimum take-or-pay obligation with PTT under Ratchaburi Master Gas Sales Agreement (“RMGSA”).(“RMGSA”).
• EGAT is obligated to make Availability Payments to RATCHGEN regardless of Payments to RATCHGEN regardless of availability of fuel
Power IndustryPower IndustryPower IndustryPower Industry
Power Industry:Power Industry:Forecast of Peak Generating in ThailandForecast of Peak Generating in Thailand 17
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Forecast of Peak Generating in ThailandForecast of Peak Generating in Thailand
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Source: Thailand Load Forecasting Sub-committee,Source: Thailand Load Forecasting Sub-committee,Energy Planning and Policy Office (EPPO)
Power Industry:Power Industry:Average Annual Expansion of Power DemandAverage Annual Expansion of Power Demand 18Average Annual Expansion of Power DemandAverage Annual Expansion of Power Demand
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Source: Thailand Load Forecasting Sub-committee,
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Source: Thailand Load Forecasting Sub-committee,Energy Planning and Policy Office (EPPO), Aug 2002
Current Power Industry:Current Power Industry:Monthly Peak & Energy GenerationMonthly Peak & Energy Generation 19Monthly Peak & Energy GenerationMonthly Peak & Energy Generation
Peak GenerationMW
Peak Generation
15,500
16,000
16,500
17,000
15,500
16,000
16,500
17,000
5.1%4.5%
9.8%3.4%
7.3%7.7% 6.5%
5.4% 3.7%10.1%7.6% 8.3%
- Highest demand, so far, was on April 4th with 16,681MW with 3.44% increase yoy
13,000
13,500
14,000
14,500
15,000
13,000
13,500
14,000
14,500
15,0005.1%
3.3% 4.1%2.4% with 3.44% increase yoy
13,000Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Month
13,000
2002 2003 2001
-Average monthly energy generation growth in the fiscal year* is 5.07%
Energy Generation
10,000
10,500
GWh
10,000
10,500
8.5%
4.4%6.2% 6.6% 8.6% 5.9%
5.6%8.2%
year* is 5.07%-Average yearly energy generation growth in the fiscal year is 5.67%
8,000
8,500
9,000
9,500
8,000
8,500
9,000
9,500
3.9%
3.2%1.4%
3.2%1.7%
4.4%6.6%
5.6%13.6%
8.2%
13.0%
Source :EGAT , Energy Generation Monthly ReportSource :EGAT , Energy Generation Monthly Report
year is 5.67%* Thailand Government Fiscal year October* Thailand Government Fiscal year October--SeptemberSeptember
7,500Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Month
7,500
2001 2003 2002
Source :EGAT , Energy Generation Monthly ReportSource :EGAT , Energy Generation Monthly Report
Current Power Industry:Current Power Industry:Energy ConsumptionEnergy Consumption 20Energy ConsumptionEnergy Consumption
Energy Consumption for Energy Consumption for 2002 2002 compare with compare with 20032003
- The Large, Medium and Small General Service comprising over 70%
Sale Increase
GWh Weight (%) GWh Weight (%) (%)
Residential 7,422 20.98 7,918 21.22 6.67
Customer Category2002 2003 (Forcast)
General Service comprising over 70% of total electricity consumption.
- The average growth for all customer
Residential 7,422 20.98 7,918 21.22 6.67
< 150 kWh per month 453 1.28 464 1.24 2.57
> 150 kWh per month 6,970 19.71 7,453 19.97 6.94category in 2003 is 5.51% and residential is the most potential in demand growth.
> 150 kWh per month 6,970 19.71 7,453 19.97 6.94
Small General Services 4,870 13.77 5,141 13.78 5.57
Medium General Services
8,078 22.84 8,440 22.62 4.48 demand growth.- The Large Medium and Small General
service growth are 5.8% , 4.48% and 5.57% respectively, indicate the
Services8,078 22.84 8,440 22.62 4.48
Large General Services 12,092 34.19 12,793 34.28 5.80
Specific Business Services
1,601 4.53 1,676 4.49 4.675.57% respectively, indicate the growth for Thailand's industrial sector in year 2003
ServicesGovernment Institutions
1,146 3.24 1,183 3.17 3.19
Street Lighting 161 0.45 169 0.45 4.82
Total 35,371 100 37,319 100 5.51
Source: PEA 2002
Current Power Industry:Current Power Industry:Tariff StructureTariff Structure 21Tariff StructureTariff Structure
- The existing average retail tariff is about 4.05% higher than the marginal cost
DifferenceAverage Tariff (Baht/kWh)4.05% higher than the marginal cost based retail tariff.
- There is significant subsidization for the
Difference
Marginal Cost Based
Existing Tariff (%)
Residential 2.31 2.28 1.32
Customer CategoryAverage Tariff (Baht/kWh)
- There is significant subsidization for the agricultural pumping customers.
- The overall residential tariff reflects the marginal costs; however, the application
Residential 2.31 2.28 1.32
Small General Services 2.47 2.77 -10.83Medium General Services 1.94 2.30 -15.65 marginal costs; however, the application
of the progressive block rates has resulted in cross-subsidization within the category itself. Large residential
Services 1.94 2.30 -15.65
Large General Services 1.90 2.00 -5.00Specific Business Services 1.78 2.00 -11.00 category itself. Large residential
customers have to subsidize small residential customers.
Services 1.78 2.00 -11.00Government Institutions 2.31 2.27 1.76Agricultural Pumping
2.37 1.80 31.67- Moreover, customers under the small
/medium general services and specific business services will pay for electricity
Agricultural Pumping Service 2.37 1.80 31.67
Street Lighting 1.83 0.00
Total 2.11 2.20 -4.05business services will pay for electricity in excess of the marginal costs.
Total 2.11 2.20 -4.05
Source: EPPO, February 2001
Current Power Industry:Current Power Industry:Comparison of neighboring tariffsComparison of neighboring tariffs 22Comparison of neighboring tariffsComparison of neighboring tariffs
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- Thai tariffs are the lowest among the neighboring countries in almost all categories. Exceptional
Source : EGATSource : EGAT
- Thai tariffs are the lowest among the neighboring countries in almost all categories. Exceptional is in industrial classification.
- Average tariff is 2.45 Baht per unit for combined categoriesNote:1)�2001 figure (Oct 2000 – Sept 2001)1)�2001 figure (Oct 2000 – Sept 2001)2) Tariffs excluded VAT3) Average Baht 44.33/ US$
Benefits of Interest Benefits of Interest Benefits of Interest Benefits of Interest ReductionReductionReductionReduction
Benefit of Interest Reduction:Benefit of Interest Reduction:Interest SavingInterest Saving 24Interest SavingInterest Saving
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* Average MLR of KTB, SCB, BBL and BAY
The amendment on loan agreements
���� ���� ���� ���! ���� ���� ����SCB, BBL and BAY
Interest rate reduction are as follows: -1. MLR* - 1.50% for period of the first three years (from July 1, 2002 to June 30, 2005.)2. MLR - 1.125% for period of the next three years (from July 1, 2005 to June 30, 2008.)2. MLR - 1.125% for period of the next three years (from July 1, 2005 to June 30, 2008.)3. MLR flat for the remaining period(starting from July 1,2008.)The total saving is around Baht 2,734 million
In conjunction, the prepayment fee will be 3%,2%and 1% pertinent to such periodsIn conjunction, the prepayment fee will be 3%,2%and 1% pertinent to such periods
Operating Performance Operating Performance Operating Performance Operating Performance (Unaudited)(Unaudited)(Unaudited)(Unaudited)
Operating Performance Operating Performance 20012001&&20022002 26Operating Performance Operating Performance 20012001&&20022002
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Operating Performance Operating Performance –– 20022002 27Operating Performance Operating Performance –– 20022002
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Investment ConsiderationInvestment ConsiderationInvestment ConsiderationInvestment Consideration
Why RATCH ?Why RATCH ? 29Why RATCH ?Why RATCH ?
Dominant Player
• RATCH is the largest private power producer in Thailand. Its forefront position and financial strength will serve as a solid platform for further
Dominant Player
position and financial strength will serve as a solid platform for further business expansions.
• Strong expansion economics with:
– Average EBITDA of approximately 9 billion Baht per annum during the next ten years.
– Excess cash after dividend at RATCH (payout ratio of 40% and net of debt reserve accounts) retention will be served for business expansion
– Competitive advantage for future expansion potential with minimal investment cost estimated at around US$ 500,000/ MW.investment cost estimated at around US$ 500,000/ MW.
Why RATCH ?Why RATCH ? 30Why RATCH ?Why RATCH ?
Solid Industry Growth
• Electricity consumption still grow at a solid pace; country need new capacity in the near • Electricity consumption still grow at a solid pace; country need new capacity in the near future
Strong Earnings Growth
• Strong earnings growth from the 25 years well structured PPAs.
Why RATCH ?Why RATCH ? 31Why RATCH ?Why RATCH ?
– Minimal earning swings from change in foreign exchange rate as
Low Risk
– Minimal earning swings from change in foreign exchange rate as
total financing will be in Thai Baht.
– No Minimum-Take-Or-Pay risk on natural gas purchases from – No Minimum-Take-Or-Pay risk on natural gas purchases from
PTT.
– Availability Payments will be received irrespective of whether – Availability Payments will be received irrespective of whether electricity is dispatched or any fuel supply disruptions.
– Protected from impact of change in law and Grid Code via the – Protected from impact of change in law and Grid Code via the
ability to pass through cost increases above certain thresholds.
– Minimum DSCR of 1.2x and average DSCR of 1.7x over the life – Minimum DSCR of 1.2x and average DSCR of 1.7x over the life
of all outstanding debt.
Awards in Awards in 20022002Awards in Awards in 20022002
Awards in Awards in 2002 2002 ::Good Corporate GovernanceGood Corporate Governance 33Good Corporate GovernanceGood Corporate Governance
- RATCH ranked the 3rd in Asiamoney corporate governance poll for utilities sector in Asiapoll for utilities sector in Asia
Source : Asiamoney October Source : Asiamoney October 20022002
Awards in Awards in 2002 2002 ::Good Corporate GovernanceGood Corporate Governance 34Good Corporate GovernanceGood Corporate Governance
Award Title : Disclosure Award
Award details : Disclosure of Form 56-1
(Particular on Risk Factors and
Nature of Business)
Organizer : The Office of the Securities Organizer : The Office of the Securities
and Exchange
CommissionCommission
Date : 5th November 2002
Awards in Awards in 2002 2002 ::Environmental and Social ResponsibilitiesEnvironmental and Social Responsibilities 35Environmental and Social ResponsibilitiesEnvironmental and Social Responsibilities
Award Title : Excellent quality Award onNationwide basisNationwide basis
Award details : Excellent maintenance ofNavaratchaburirom ParkNavaratchaburirom Park(a recreational center located in front of the power plant built and maintained by Ratchburi and maintained by Ratchburi Generating Co.)
Organizer : Ministry of Public Health Date Organizer : Ministry of Public Health Date 31st October 2002
AppendixAppendixAppendixAppendix
Appendix: Appendix: Thai Electricity Market Structure Thai Electricity Market Structure -- Current StructureCurrent Structure 37Thai Electricity Market Structure Thai Electricity Market Structure -- Current StructureCurrent Structure
Key Features of current structureSPPs EGATIPPs RATCHEGCO
• Currently, the private sector has only a limited role ( generation only).
• EGAT has a market monopoly at the wholesale
SPPs EGATIPPs EGCO
•Power Purchase• EGAT has a market monopoly at the wholesale level, supplying electricity to PEA, MEA and some direct customers.
• There are few incentives for private power
Governm
ent
EGAT
•Power Purchase•System Operation•Transmission•Bulk Power Supply
• There are few incentives for private power producers to improve efficiency due to lack of market competition (aside from when bidding for the PPA with EGAT).
PEA MEADirect Customers
the PPA with EGAT).
• As EGAT is responsible for long-term electricity planning, new generating capacity must be
Customers Customers
planned and approved through/by EGAT.
• PEA and MEA are responsible for distribution/retail supply to most end users at the EGAT: Electricity Generating Authority of Thailand
Source: Electricity Supply Industry Reform and Thailand Power Pool, November 2000, modified by RATCH consultant
distribution/retail supply to most end users at the prices regulated by EPPO.
• In some limited cases (mostly industrial users), some end users are able to purchase electricity
EGAT: Electricity Generating Authority of ThailandPEA: Provincial Electricity AuthorityMEA: Metropolitan Electricity AuthoritySPP: Small Power Producer
some end users are able to purchase electricity either directly from EGAT or SPPs.
SPP: Small Power ProducerIPP: Independent Power ProducerEPPO: Energy Policy and Planning Office
Appendix:Appendix:Thai Electricity Market Structure Thai Electricity Market Structure –– New Electricity Supply ArrangementNew Electricity Supply Arrangement38Thai Electricity Market Structure Thai Electricity Market Structure –– New Electricity Supply ArrangementNew Electricity Supply Arrangement
Hydro Plants GENCOsGE
NC
Os
- Over the time of Power Pool operating, customer groups
Key Features of NESA structure
Hydro Plants
Independent System Operator
Forward &
Financial Market
GENCOsB
ilateral Contract
Bilateral C
ontract
GE
NC
Os
and interest parties need for reform it to improve for more efficiency, economic and transparency in the operation of pricing.
Independent System Operator
Forward &
Financial Market
Grid Company
Spot Market
Bilateral C
ontract
Bilateral C
ontract
Bilateral
Contract
Supplier
Custom
er
- NESA provide greater choice for market participants than the Pool-based trading to purchase and trade electricity with more active demand-side participation in the
Supply
Distribution
Direct Customers
Forward &
Financial Market
REDCO
Bilateral C
ontract
Bilateral C
ontractSupplier D
irect C
ustomer
Trader
market, while maintaining the operation of a secure and reliable electricity system by the establishment of close to real time balancing arrangements.
Balancing
Mechanism
SupplyDirect Customers
Customers
Forward &
Financial Market
Retail Co.- The forward trading would lead to the emergence of forward price curves that would better facilitate efficient new entry, by providing both generators and suppliers
Balancing
Mechanism
CustomersR
etailerwith clearer signals.
- The new balancing mechanism and settlement arrangements were designed to ensure the national grid
Source: Electricity Supply Industry Reform and Thailand Power Pool, November 2000
arrangements were designed to ensure the national grid company and independent system operator (ISO) was able to maintain short-term quality and security of supply
- The Balancing Mechanism and the Settlement process required new IT systems to be built and operated.
Appendix:Appendix:Thai Electricity Market StructureThai Electricity Market Structure -- Third Party AccessThird Party Access 39Thai Electricity Market StructureThai Electricity Market Structure -- Third Party AccessThird Party Access
Key features of third party access
• Under a third party access system, EGAT would in • Under a third party access system, EGAT would in most cases maintain its monopoly at the wholesale market level (central supplier).
SPPs GENCOsIPPs RATCHEGCO
• “Third Party Access” regime would be introduced so that generating companies could directly supply end users through the network of PEA, MEA or EGAT.
IND
EP
EN
DE
NT R
EG
ULA
TOR
EGAT
•Power Purchase•System Operation•Transmission•Bulk Power Supply
users through the network of PEA, MEA or EGAT.
• An Independent Regulator would be set up to regulate transmission/distribution pricing and other standards.
IND
EP
EN
DE
NT R
EG
ULA
TOR
PEA MEA
transmission/distribution pricing and other standards.
• EGAT’s power generating assets (i.e. Thermal, Hydro, CCGTs, etc.) would be ring-fenced (and/or
Large Customers Small Customers Small Customers
Hydro, CCGTs, etc.) would be ring-fenced (and/or grouped) and operate as business units (profit centres). Source: Electricity Supply Industry Reform and Thailand
Power Pool, November 2000, modified by RATCH • EGAT would be structured as a holding company.
Grid Company and other subsidiaries would be separated out and incorporated as separate entities,
Power Pool, November 2000, modified by RATCH consultant
separated out and incorporated as separate entities, whist remaining under the EGAT holding company.
Appendix: Appendix: Operation and Maintenance Schedule for Operation and Maintenance Schedule for 20032003 40Operation and Maintenance Schedule for Operation and Maintenance Schedule for 20032003
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Appendix:Appendix:MiniMini Hydro ProjectsHydro Projects 41MiniMini Hydro ProjectsHydro Projects
Project Contract Structure
*��������� ���
RATCH
RE EGATHydro Operating Unit
EGATPower Purchaser
OMAPPAHydro Operating UnitPower Purchaser
Mini Hydro Projects
• All commercial contracts i.e. Power Purchase Agreements (PPAs) and Operation and
Maintenance Agreement (OMA) have been structured to mitigate project risk
• 25 years non-firm SPP with tariff structure at Baht 1.68 per unit plus incentive of Baht 0.20
per unit from Energy Conservation Fund for the next 5 yearsper unit from Energy Conservation Fund for the next 5 years
Appendix:Appendix:Mini Hydropower Development ProjectsMini Hydropower Development Projects 42Mini Hydropower Development ProjectsMini Hydropower Development Projects
Project Chao Phraya Pasak Cholasith Khlong Tha DanProject Chao Phraya Pasak Cholasith Khlong Tha Dan
Installed Capacity (MW) 12 6 10
Type of PPA Non�firm Non�firm Non-firm
Term of PPA (yrs) 25 25 25Term of PPA (yrs) 25 25 25
Location (Province) Chainat Lopburi Nakorn Nayok
Energy Generation (GWh/ yr) 60�52 31�81 27�99
Use in Station Service and RID (GWh ��yr) 0�54 0�54 ��54
Energy Sale (GWh ��yr) 59�98 31.� � 27�45
Project Cost (Million Baht) 657 �87 324 �04 278 �50Project Cost (Million Baht) 657 �87 324 �04 278 �50
Appendix: Appendix: Future ProjectsFuture Projects 43Future ProjectsFuture ProjectsBiomass Projects*
Project Ayutthaya Suphanburi• All commercial contracts i.e. Power
Purchase Agreements (PPAs) and Husk Sell Agreement (HSA) have been
Project Ayutthaya Suphanburi
Installed Capacity (MW) 9.9
Type of PPA Firm Firm
9.9
Sell Agreement (HSA) have been structured to mitigate project risk. To ensure the supply of husk, rice mill will
Type of PPA Firm Firm
Term of PPA (Yrs.) 21 21
Location (Province) Ayutthaya Suphanburi
be shareholder in each project
• Tentative 21 years firm SPP with tariff structure at Baht 2.30 per unit
Energy Generation 70 70
Use in Station Service 8 8
Energy Sale 62 62
(GWh/yr)
(GWh/yr)
Biomass Projects
structure at Baht 2.30 per unit
*Under studying projects
Energy Sale 62 62
Project Cost 520 520
(GWh/yr)
(Million Bath)
RATCH*Under studying projects
NP
Rice MillEGATPower Purchaser
PPA
Project 1,2,3..NHSA
Powering the FuturePowering the FuturePowering the FuturePowering the Future