Thailand needs local infrastructure to become energy hub in ASEAN

According to the Switzerland-based World Economic Forum (WEF), Thailand possesses competitive strengths on which it can capitalize to become the energy hub in the ASEAN region. However, to realize this, there is a need to adopt policies that will create a more diversified, efficient and integrated energy structure. WEF also calls for the phasing out of subsidies on fossil fuel, as these lead to high economic cost and to growing domestic consumption.
Thailand has a strong agricultural base and its long experience in the biofuels sector could make it the “Brazil of the ASEAN,” an objective the government has already articulated, stating its desire to become the hub for ethanol trade in Asia. Its big challenge, aside from the cost of the required infrastructure, is that Singapore has already established itself as a global player and enjoys 15% of the oil trade market worldwide, as reported by WEF. According to Espen Mehlum, associate sirector, head of knowledge management and integration, and energy industries global leadership fellow at the WEF, Thailand’s current level of ethanol production allows for exports to the region; however, its export capacities, infrastructure and storage facilities still need to be developed. He added that there is a need to address the issue of land use for food and energy crop production. Mehlum said that in terms of energy architecture performance, Thailand ranks No. 1 in ASEAN, and 14th among non-OECD nations.
 
For Thailand to become more diversified, more efficient and more integrated, Michael Moore, project manager of New Energy Architecture, said that a number of measures need to be addressed to achieve those objectives, among them:

• Adoption of a flexible policy framework , using a new set of skills to stabilize energy policies;
• Promotion of biofuels, establishment of bilateral relationships with other countries in Asia to obtain new supply sources, and lay the foundation for nuclear power. Aside from the Gulf of Thailand, new potential sources exist, such as the Thai-Cambodian overlapping area, and new marginal fields both in land and offshore;
• Find efficient ways to use energy to meet domestic demand that will continue to grow substantially;
• And, develop connectivity with ASEAN, including human and institutional concerns, as a member of the ASEAN Economic Community.

(October 15, 2012)