Egat tackles disruption with rejig

The board of the state-run Electricity Generating Authority of Thailand (Egat) has approved an organisational restructuring plan to respond to disruptive technology in the power sector and stay competitive in the domestic market.

The restructuring plan will trim staff to 15,000 people within five years and decrease the number of deputy governors to eight in 2019 from 13 last year, said chairman Witoon Kulcharoenwirat.

Egat currently has 22,000 employees. Hundreds are scheduled for retirement during 2018-22, and Egat will push an early-retirement scheme to help reach the staff cutback target.

The restructuring programme will span all positional levels and is set to go into play this October, Mr Witoon said. That programme is targeted to be instituted before a final report for Egat’s business revamp, being handled by the International Energy Agency, concludes by mid-2019.

Egat wants to learn the lessons from Kodak and Nokia, which collapsed after failing to adapt to the fast pace of technological change.

“This programme has come at the right place and time because disruptive technology in the power sector is taking off and will hurt Egat’s business unless we are prepared,” Mr Witoon said.

He said Egat has been studying new technology for several years, though the revamp programme has yet to conclude.

Although Egat had overestimated its power reserve capacity, it is ready for the swift growth of renewable energy in Thailand, Mr Witoon said, adding that the state enterprise has to be prepared to respond to changes in the sector.

He said Egat is still the backbone of the power industry in Thailand and will need to develop a mainstream power plant.

“Egat has been assigned with maintaining the country’s energy security for more than four decades, and it needs to continue doing this job,” said Mr Witoon, also director-general of the Energy Business Department.

Renewable power from biomass, biogas, solar and wind has been gaining momentum in Thailand over the last decade, from less than 100 megawatts during the demonstration period from 1991 to 2004 to almost 10,000MW, representing 25% of total installed capacity.

Renewable power has been partially subsidised, shifting from an adder tariff regime to a feed-in version, so Egat is burdened with higher power-purchasing costs from renewable players.

Blockchain technology is also being applied in the power sector, including renewables in the global market, another reality Egat will have to adapt to, Mr Witoon said.