Restructuring of electricity supply industry in developing countries: lessons from Thailand

Summary form only given as follows. This paper discusses issues associated with the restructuring of electricity supply industry (ESI) in developing countries and includes fundamental background material on the ownership management and restructuring process in both theoretical and practical aspects. The factors that drive reform in developing countries, especially in Asia, are different in many important ways from those that do so in the West. Chief among these differences are the need for the consolidation of a national grid which is at a relatively early stage of evolution, the directive role of government policy in key sectors of the national economy, and the way in which a power market should be designed. The inherited pre-reform organizational structures are also very different and this impacts on feasible post-reform options. This paper discusses several of these issues and places emphasis on transmission system organization and management in ESI reform. The National Transmission Authority (NTA) concept is introduced as an arrangement, which is most suitable for developing countries, where the ownership of the transmission systems has to be accountable at the national policy level. An alternative viewpoint in respect of ownership, management, organizational structure, and power market projects, is developed in the paper. The investment features of the BOT and BOO can be applied to the new facilities in both generation and transmission projects. While the BOT option is suitable for the projects driven from centralized plan handled at the national level, a modified BOO after reform will become a new IPP. Thailand, since it is of medium size and reform oriented, is used as the main case study but short sections on Sri Lanka and China are included to broaden the relevance of the discussion.