Key Policies in the Thai Power Sector: Integration and Competition

Abstract

This paper discusses the issues of horizontal integration, vertical integration and competition in the Thai power sector. Given the integration structure of the Thai power sector, competition that results in some unbundling of the assets in the power sector raises an interesting question of whether the anticipated gains from competition outweighs the losses in cost savings from the integration structure. This paper argues that competition in the Thai power sector resulted in increases in costs of the power supply due to the nature of the power purchase agreement and suggests alternative policy options to reduce the costs of the power supply.