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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.

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.

18 comments on “Thailand’s Next Crisis: Power Generation

  1. Ariella
    March 5, 2013

    A slim margin for error is the opposite of good engineering, which includes redundancy. As Murphy's Law states, if something can go wrong it will, so one has to not just plan for best case scenarios.

  2. Brian Fuller
    March 5, 2013

    Ariella, agreed and excellent point. But is it realistic to build that mentality into any government? 

    Seems almost antithetical. 

    What do you think?

     

  3. Ariella
    March 5, 2013

    @Brian Actually, I think it makes sense for governments to plan with solid engineering principles. 

  4. Brian Fuller
    March 5, 2013

    @Ariella, agree with you 100 percent. Two governments come to mind with a preponderance of engineers in politically powerful positions: China and Egypt. 

    I'm not sure whether we can draw lessons there, though. 

     

  5. Daniel
    March 6, 2013

    Brain, china is OK because now they are like global hub for electronic manufacturing. But how its related to Egypt. No idea, can you be little bit elaborative.

  6. FLYINGSCOT
    March 6, 2013

    Just like Thailand receovered from the last disaster I imagine it will take this one in its stride after a wobble or two 😉  However I agree it should have been planned and mitigated.

  7. Brian Fuller
    March 6, 2013

    @Jacob, apologies, that wasn't the most elaborate comment I've ever posted. 

    ;  )

    What I mean is, in response to Ariella's comment, that there are a couple of governments that came to mind that are stacked with engineers in power positions, China and Egypt. China may or may not be good at planning infrastructure with solid engineering principles (her words). They have their share of infrastructure successes and disasters just like the U.S. which is not stacked with engineers in power positions.

    Egypt too has a lot of engineers in cabinet positions but we don't associate Egypt with fail safe infrastructure operations.

    I probably over thought this… but maybe it doesn't take an engineering mind to build a sound national infrastructure. 

     

     

  8. ahdand
    March 7, 2013

    “Just like Thailand receovered from the last disaster I imagine it will take this one in its stride after a wobble or two 😉

    @FlyingScot: Positive thinking but I wont back it since I feel its too early to predict something like that plus the situation at that time is totally different from this. True they have to focus heavily on this matter and pre-plan what they are going to do in such a scenario. 

  9. Brian Fuller
    March 7, 2013

    What do you think had a bigger impact on the supply chain, the earthquake and tsunami or the floods? Seems to me the chain bounced back reasonably quickly after each, despite early fears of supply paralyzation in some areas. 

     

  10. Daniel
    March 7, 2013

    Brain, its ok. I think in most of the countries politician are either with administrative or civics or economics or with law background. Only very few are from engineering or medical field. I personally feels that ministers portfolio has to given to expert peoples from same line of profession.

  11. Daniel
    March 7, 2013

    “Positive thinking but I wont back it since I feel its too early to predict something like that plus the situation at that time is totally different from this”

    Nimantha, I think I can give/update you a real picture by end of this month. From March 15 th to 24, I will be in Thailand for attending various meetings/conferences with respect to supply of semiconductor components.

  12. Brian Fuller
    March 8, 2013

    As of today, it looks like Thailand is gearing up for rolling blackouts during that week in April when its generation capacity gets cut. 

    http://www.nationmultimedia.com/business/Egat-industries-tackle-looming-power-shortfall-30201553.html

     

  13. Wale Bakare
    March 9, 2013

    Do you fearing more on power over natural disasters – earthquake and floods?

  14. SunitaT
    March 10, 2013

    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.

    @Brian, thanks for this update. I am curious to know if this maintenance is done every year ? Why dont they have any backup power-supply during this maintenance ?

  15. ahdand
    March 10, 2013

    Yes Wale since I feel that natural disasters can be forecasted most of the times but power struggles cannot be forecasted plus has dangerous effects on the economy.

  16. Clairvoyant
    March 11, 2013

    Tirlapur, it seems that Thailand doesn't even have the infrastructure to meet regular power demand, therefore it wouldn't have any backup power generation.

  17. ahdand
    March 12, 2013

    Jacob: That would be great. Waiting for your update then. Thank you.

  18. Daniel
    March 14, 2013

    Brain, it seems that the issue is due to the shortage in supply of natural gas from Myanmar. Since majority of power generation is based on this natural gas, this supply cut can cause a shortage of about 70% in power generation. Am not getting how industries can survive during this off period.

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