+-----------------------------------------------------------------------+
| # Country or Region: Thailand                                         |
|                                                                       |
| # Electric Power Equipment Opportunities                              |
+-----------------------------------------------------------------------+
| Kitisorn Sookpradist                                                  |
|                                                                       |
| Date (03/2006)                                                        |
|                                                                       |
| ID:# 138134                                                           |
+-----------------------------------------------------------------------+

####### Summary

Rising electric power consumption in Thailand is generating a demand for
U.S. electric power equipment. In response to the country's continued
economic growth, the Thai government has implemented steps to increase
the current power generation capacity of 26,430 megawatt to keep pace
with the forecasted 5% per year growth in electric power consumption.

The revised Power Development Plan (PDP) will add more generation
capacity from both government and private power producers, and create
sales opportunities for electric power equipment such as power
generation, transmission and distribution infrastructure. The
Electricity Generating Authority (EGAT) will develop the major power
generation projects, with additional project opportunities for both
domestic and foreign private power producers. The Thai government is
expected to open a new round of bidding from interested power producers
in early 2007.

Thailand's total electric power equipment import market stood at \$3.5
billion in 2005, with products from Japan, China, and the United States
capturing about 60% of the total. Japanese imports dominated Thailand's
market with a 40.88% market share. Other key sources included Singapore,
Taiwan and Germany. Major buyers include government owned electric power
authorities such as EGAT, Independent Power Producers (IPPs), the
Metropolitan Electricity Authority of Thailand (MEA), and the Provincial
Electricity Authority of Thailand (PEA), as well as private authorities
such as Small Power Producers (SPPs),

Interested U.S. suppliers can enter the market by selling directly to
end users or developing partnerships with Thai companies to pursue
market opportunities.

####### Market Demand

#### 

Market demand for electric power equipment in Thailand is correlated
with the country's electricity demand, which is growing in tandem with
the country's economic growth. Details of the current market demand,
demand forecasts, and resolutions to cope with it are described in the
following paragraphs.

#### Current power demand

In April 2005, the hottest summer month, Thailand's peak electricity
demand was 20,538 megawatts (MW). Thailand has an installed power
generation capacity of 26,430 MW as of May 2005 with about a 20% power
reserve. Thailand's main electric power producer/wholesaler is the
Electricity Generating Authority of Thailand (EGAT). EGAT is the Thai
government-owned electricity generating and transmission company. EGAT
is the country's largest power producer with total electricity
production capacity of 16,000 MW -- about 60% of which is generated
using domestically produced natural gas. EGAT is the country's largest
owner of power transmission lines.

#### Demand forecasts

According to the Energy Planning and Policy Office of Thailand (EPPO),
Thailand's electricity demands will continue to grow at five percent
(5%) per year. This forecast was reduced from a 6 to 7% annual growth
rate due to soaring oil prices that are expected to lower Thailand's
2006 economic growth to 3.5 to 4.3%. EPPO expects electricity demand
(consumption) will increase at 1,000 to 1,200 MW annually through 2010.
Demand will increase 2,000 to 3,000 MW per year from 2011 to 2015.

#### Resolution

To cope with the 5% annual growth in electricity demand, the Thai
government plans to increase the country's electricity generation
capacity and purchase more power from neighboring countries, Myanmar and
Laos. The Thai government has revised its Power Development Plan (PDP)
to better reflect the change in the country's economic growth. The new
PDP for the period 2005 to 2015 requires additional generating capacity
from power producers: 2,800 MW from EGAT, 5,425 MW from IPPs and SPPs,
and 12,755 MW from other producers. There are two objectives to the new
PDP. 1) To produce: from EGAT, the public producer, and private and
independent power producers (IPPs). 2) To purchase: increase power
purchases from neighboring countries such as Laos.

####### 

####### 

####### Market Data

Thailand's Electric Power Demand Forecast (Unit: megawatts)

(Source: Electricity Generating Authority of Thailand - EGAT)

+--------------------+--------------+----------------+----------------+
| ### Year/Producers | ### EGAT     | #              | ### O          |
|                    |              | ## IPPs & SPPs | ther Producers |
+--------------------+--------------+----------------+----------------+
| ### 2005           | ### -        | ### 20         | ### -          |
+--------------------+--------------+----------------+----------------+
| ### 2006           | ### -        | ### -          | ### -          |
+--------------------+--------------+----------------+----------------+
| 2007               | ### -        | ### 2,210      | ### -          |
+--------------------+--------------+----------------+----------------+
| 2008               | ### 700      | ### 2,100      | ### -          |
+--------------------+--------------+----------------+----------------+
| 2009               | ### 1,400    | ### -          | ### -          |
+--------------------+--------------+----------------+----------------+
| 2010               | ### 700      | ### 1,095      | ###            |
+--------------------+--------------+----------------+----------------+
| 2011               | ### -        | ### -          | ### 2,940      |
+--------------------+--------------+----------------+----------------+
| 2012               | ### -        | ### -          | ### 2,205      |
+--------------------+--------------+----------------+----------------+
| 2013               | ### -        | ### -          | ### 2,205      |
+--------------------+--------------+----------------+----------------+
| 2014               | ### -        | ### -          | ### 2,940      |
+--------------------+--------------+----------------+----------------+
| 2015               | ### -        | ### -          | ### 2,940      |
+--------------------+--------------+----------------+----------------+

  -------------------------- ---------- ---------- ---------- ---------------
  **[Market Size for                                          
  Electric Power Systems                                      
  Equipment]{.underline}**                                    

  **(Sales in US Dollars,                                     
  Millions)**                                                 

                                                              

                             2005       2006 (e)   2007 (e)   Projected
                                                              Growth

  Import Market              3,524.98   3,701.23   3,886,29   5.00%

  Local Production           2,369.00   2,487.45   2,611.82   5.00%

  Exports                    2,324.93   2,441.17   2,563.23   5.00%

  Total Market               3,569.05   3,747.50   3,934.88   5.00%

  Imports from US            270.37     283.89     298.08     5.00%

                                                              

  Exchange Rate (Baht:US\$)  40:1       40:1       40:1       

  Expected Inflation Rate    3.5%                             

                                                              

  Sources: Customs                                            
  Department's Import &                                       
  Export Statistics                                           

  Compiled by U.S.                                            
  Commercial Service, U.S.                                    
  Embassy, Bangkok, Thailand                                  
  -------------------------- ---------- ---------- ---------- ---------------

####### 

####### Best Prospects

The government's plans to increase electricity generation capacity to
create sales opportunities for electric power equipment such as power
generation, transmission and distribution infrastructure, substations,
distribution networks, transformers and converters, switching apparatus
and energy efficiency products. The government intends to split half of
the total power requirements to private power producers while EGAT will
be given permission to operate and supply the remainder over the next
ten years.

## Major power generation developments 

EGAT is investing more than 100 billion baht (approximately \$2.4
billion) in the next three years; 65% percent allocated to build new
power plants; 35% invested in new transmission lines. The Thai cabinet
approved EGAT's plans to develop four new power plants of approximately
700 MW each; the first plant in Songkhla province is expected to be
completed in 2007; plants in Nonthaburi, Samut Prakarn and Chachoengsao
(Bang Pakong) provinces are to be completed in 2008.

## Other power generation developments

The Thai government plans to invite local and foreign independent power
producers (IPPs) and small power producers (SPPs), collectively known as
"private power producers," to bid for electric power plant construction.
The Thai government is expected to open a new round of bidding for IPP
projects in early 2007 for power generation capacity to come online from
2011 to 2015. It is expected that the EPPO will draw a conclusion soon
on Thailand's electricity demand and set up conditions for the bidding
and properties of qualified candidates for IPP projects. The conditions
and properties will be considered and approved by the National Energy
Policy Committee before the formal opening for the bidding.

In addition, the government is targeting a new balance of fuel sources
for power generation.

The proportion of power generation from natural gas will be reduced from
the existing 72% to 60-65%. Generated electricity from alternate fuel
sources will increase as follows:

  ------------------------ ------------------------- --------------------
  **Fuel**                 **Current Approximate     **New Targets**
                           Targets**                 

  Natural Gas              72%                       60-65%

  Coals                    10-12%                    13%

  Renewable                0.5%                      8%

  Hydropower               4%                        TBD
  ------------------------ ------------------------- --------------------

Source: Ministry of Energy

####### Key Suppliers

The electric power equipment market in Thailand attracts equipment
imported from Europe, Asia and the United States. In 2005, electric
power equipment imported from Japan dominated the market with a 40.88%
market share followed by products from China, the U.S., Singapore,
Taiwan, and Germany.

  ----------------------------------- -----------------------------------
  **ELP Equipment Market**            

  **Country**                         **Market Shares**

  Japan                               40.88%

  China                               11.69%

  U.S.A.                              7.58%

  Singapore                           5.33%

  Taiwan                              3.09%

  Germany                             2.96%
  ----------------------------------- -----------------------------------

Source: Customs Department

Note: Market share data is based on the Customs Department's customs
declarations which state the location of origin, not necessarily the
exporting company's ownership.

Competition from the market leader, Japan, is high, especially from
well-known brands such as Toshiba, Mitsubishi and Hitachi. Products from
China are mostly electrical apparatus for switching and protecting
electrical circuits including connectors and parts. Major U.S. companies
who have established a strong market position in the generation business
include General Electric and Siemens-Westinghouse. Market reception
toward products from Europe is also strong in Thailand. Among the major
European manufacturers, Thailand imports generators from France
(Alstom), circuit breakers and switching gears from Sweden (ABB), and
switching gears from Italy (Coelme).

Competition among local manufacturers is intense, is both the local and
export markets. Competition from the local Thai electric power equipment
industry is strong due to the large number of companies, especially
local distributors and agents of imported equipment. Most of these
distributors and agents provide after sales maintenance services to end
users. Thai manufacturers have retained residual knowledge from Direct
Foreign Investment manufacturers and manufacture products that conform
to international standards such as International IEC, Japan's JIS,
Germany's VDE and DIN, and the USA's ANSI. Most local manufacturers,
especially those making transformers, ballasts, wire and cables, also
export their products out of Thailand.

####### 

####### Prospective Buyers

The end users for electric power equipment in Thailand can be classified
into two major groups: 1) generation and 2) transmission and
distribution.

#### Generation

Electric power generating users are divided into three groups, EGAT,
IPPs and SPPs.

*Electricity Generating Authority of Thailand (EGAT)*

EGAT is the state-owned utility company involved in construction,
operation and maintenance of power plants and transmission networks. In
addition to EGAT's generating facilities, it also purchases power from
Independent Power Producers (IPPs), Small Power Producers (SPPs) and
hydro power plants in neighboring countries. EGAT's generation systems
include combined cycle thermal power plants and hydro power plants
nationwide. Its transmission system (grid) consists of long-distance
high voltage transmission lines and substations that transmit power from
both EGAT's and privately owned power plants to distributing authorities
for distribution to industrial and residential clients. (See
Transmission and Distribution section below)

*Independent Power Producers (IPPs)*

IPPs are privately owned and sizeable power producers with installed
capacity of more than 150 MW. IPPs use commercially a variety of
available fossil fuel sources such as natural gas, coal (both indigenous
and imported) and oil-emulsion. Nuclear power is excluded.

*Small Power Producers (SPPs)*

SPP are privately owned small power producers including those using
renewable energy sources.

Installed capacity of an SPP ranges between 120-150 MW. Sources of fuel
used among SPPs are bagasse, paddy husk, wood chips, natural gas, coal,
oil, black liquor, municipal waste, and waste gas from production
process. Bagasse and natural gas are the most common types of fuel used
among SPPs.

#### Transmission and Distribution

There are two transmission and distribution authorities in Thailand, the
Metropolitan Electricity Authority (MEA) and the Provincial Electricity
Authority (PEA).

*Metropolitan Electricity Authority of Thailand (MEA)*

MEA is a state enterprise established since 1958 currently under the
Ministry of Interior. The organization is responsible for the
distribution and sales of electricity to users in Bangkok and
metropolitan vicinities including Nonthaburi and Samutprakarn provinces.
MEA's distribution area covers 3,192 square kilometers divided into 14
districts.

Currently MEA is modernizing its services and internal operations. The
authority has upgraded customer services and implemented several
automated systems to enhance power distribution (substations). MEA has
integrated the Supervisory Control and Data Acquisition (SCADA) to
optimize the inspection and distribution systems of the main electricity
station and 136 substations. Moreover, it has initiated the computerized
Distribution Automation System (DAS) and adopted the Geographic
Information System (GIS) for electricity systems design, installation
and services.

*Provincial Electricity Authority of Thailand (PEA)*

Similar to MEA, PEA is another state owned utility company under the
Ministry of Interior selling and distributing electricity. The
difference is the coverage area. PEA covers all other parts of the
country except those already served by MEA. The total area served by PEA
is 510,000 square kilometers.

Established in 1960, PEA provides electricity to residential and
industrial users in provincial areas excluding Bangkok, Samutprakarn and
Nonthaburi. PEA operates from its head office in Bangkok, which oversees
four other regional offices. The head office is responsible for policy,
planning, and procurement of equipment for other regional offices. Each
regional office oversees three district offices. Therefore, there are
twelve district offices controlled by PEA. According to PEA, the
organization is planning to utilize its existing distribution network as
a platform to enter other information technology and telecom sectors,
capitalizing on the network which is already distributing power to about
99% of all electricity users.

####### 

####### 

####### Market Entry

Thai users of electric power systems equipment normally purchase
equipment from the original equipment manufacturers. International
brands such as GE Energy, Hitachi, ABB, Alstom (Generators), and
Siemens, are among the major electric power systems equipment widely
used in Thailand. Manufacturers can sell electric power products
directly to the end users, but having a local agent or distributors is
highly recommended. A qualified local representative benefits the
foreign manufacturer or supplier by gathering market information and
alerting them about upcoming market opportunities.

To participate in large procurement projects such as construction of new
power plants or development of transmission systems, it is advisable to
be in touch with the users early in the design specification phase. This
approach increases the chance of winning bids as well as avoiding being
excluded. For American companies interested in expanding their electric
power equipment and parts business in Thailand, the best approach is by
making direct contact with the buying authority and periodically check
with the Commercial Section of the American Embassy in Bangkok,
http://www.buyUSA.gov/thailand/en. The Commercial Section can provide
market information, make introductions to government authorities and
private operators, as well as propose qualified Thai companies
interested in developing partnerships with American companies.

####### 

####### Market Issues & Obstacles

In terms of regulatory control, the Thai government regulates the
electric power industry because it is considered a public utility. Thai
government official are well aware of the necessity to separate the
regulator, policy maker and operator.

In December 2005, the Thai government set up an interim regulatory
committee overseeing electricity affairs, mainly to evaluate power
demand, and monitor and revise power prices to ensure fair electric
power prices to the public. This committee is a separate entity from the
existing and widely known Energy Planning and Policy Office (EPPO). It
has seven members acting as a temporary regulatory body to facilitate
EGAT's privatization as proposed by the National Energy Policy
Committee. The newly set up committee will be responsible for
supervising the power business, regulating power rates, working out
measures to promote competition and preventing monopolies. (Source: PTIT
Focus - December 2005)

EGAT is in the process of listing its shares in the Stock Exchange of
Thailand in order to raise funds for future investments and business
expansion. However, the process has come to a halt after the
Administrative Court ordered the Initial Public Offering (IPO)
suspended. Subsequently in March 2006 the Thai Administrative court
ruled that EGAT's corporatization process was non-compliance with the
Thai laws. It is to be seen whether or not or how soon the laws will be
amended in order to pave way for EGAT to resume their IPO process.

####### Trade Events

Asia Power Congress, March 13-17, 2006, Singapore, website link
<http://www.terrapinn.com/2006/asiapower>

Electric Power Mission to the Philippines, Vietnam and Thailand, June
22-30, 2006, contact Andy Collier

Global Trade Programs, U.S. & Foreign Commercial Service, U.S.
Department of Commerce, Phone: 202-482-0680, Fax: 202-482-3113, e-mail:
<andrew.collier@mail.doc.gov>

Power-Gen Asia Conference and Exhibition, September 5-7, 2006, Hong
Kong, website link
[http://www.powergenasia.com](http://www.powergenasia.com/)

####### Resources & Key Contacts

####### 

####### EGAT Public Co., Ltd.

####### 53 Charan Sanitwong Road

####### Bang Kruay, Nonthaburi 11130

####### Phone: 662-436-3000

####### Fax: 662-436-3090

####### Web Site: http://www.egat.or.th

####### 

####### Metropolitan Electricity Authority (MEA)

####### 30 Soi Chidlom, Ploenchit Rd.

####### Lumpini, Pathumwan, Bangkok 10330

####### Phone: 662-256-3094, 662-251-6691

####### Fax: 02-253-1424

####### Web Site: http://www.mea.or.th

####### 

####### Ministry of Energy (MOEN)

####### Pibultham Villa (1897), 17 Rama 1 Rd., Rongmuang

####### Pathumwan, Bangkok 10330

####### Phone: 662-225-2468, 226-4123 

####### Fax: 662-226-4468

####### Web Site: http://www.energy.go.th

####### 

####### Provincial Electricity Authority (PEA)

####### 200 Ngam Wong Wan Road

####### Chatuchak, Bangkok 10900

####### Phone: 662-953-0670, 02-590-5100

####### Fax: 662-590-5047, 02-589-4990, 02-590-5048

####### Web Site: www.pea.co.th

####### For More Information

The U.S. Commercial Service in Bangkok, Thailand can be contacted via
e-mail at: <kitisorn.sookpradist@mail.doc.gov>; Phone: 662-205-5090;
Fax: 662-255-2915 or visit our website:
[www.buyusa.gov/thailand/en](http://www.buyusa.gov/thailand/en).

####### The U.S. Commercial Service --- Your Global Business Partner

With its network of offices across the United States and in more than 80
countries, the U.S. Commercial Service of the U.S. Department of
Commerce utilizes its global presence and international marketing
expertise to help U.S. companies sell their products and services
worldwide. Locate the U.S. Commercial Service trade specialist in the
U.S. nearest you by visiting <http://www.export.gov/>.

*Disclaimer: The information provided in this report is intended to be
of assistance to U.S. exporters. While we make every effort to ensure
its accuracy, neither the United States government nor any of its
employees make any representation as to the accuracy or completeness of
information in this or any other United States government document.
Readers are advised to independently verify any information prior to
reliance thereon. The information provided in this report does not
constitute legal advice.*

*International copyright, U.S. Department of Commerce, 2006. All rights
reserved outside of the United States.*