Thailand's Next Crisis: Power Generation

Just when you thought Thailand's effect on the global electronics supply chain was a distant nightmare, surprise! It's back!

A month from now, the country's power grid could be brought to its knees thanks to routine maintenance on a gas-fired power plant in Myanmar.

Specifically, the French-run plants in the Yadana offshore gas field will go down for maintenance April 4 through April 15.

Thailand officials believe this will cut gas supplies to Thailand of 1.1 billion cubic feet per day. That's a 25 percent cut in gas supply to the nation that potentially creates an energy supply shortfall.

Powering down: Thailand loses 25 percent of its power generation
for several days in April, raising concerns about the supply chain there.

According to the Financial Times:

Yingluck Shinawatra, Thailand's prime minister, has assured the country that power cuts are unlikely. She has personally appealed to businesses and individuals to reduce their power usage during April.

Risk assessment
We can only go so far in beating on Thailand's recent outsized role in the electronics supply chain. The 2011 floods brought out in relief the disk drive industry's stunning oversight in locating factories in the flood zone. (See Thailand Stages a Comeback.)

This is a risk-assessment lesson and a risk-management moment. Natural disasters are unavoidable. But electricity supply is tangible and measurable. Gas supplies 70 percent of Thailand's power-generation needs, a quarter of that coming from the Yadana field.

The country's estimated power needs for a hot and muggy April are 26,300 MW. The maintenance will pull 6,400 MW off Thailand's grid, leaving total capacity estimated at 27,000 MW. That's a slim margin for error.

These are quantifiable numbers; these are numbers that undoubtedly figure into some electronics executives' risk-management models when they're considering Thailand or other offshore locations.

And yet, here we go again.

Related posts:

• Water Risks Impacting Supply Chains
• Stay Alert: Effective Risk Mitigation Requires Vigilance
• Thailand Stages a Comeback