There are ample business
opportunities in Asia. Considering the huge investment involved in the
development of power generation and transmission project to meet the increasing
demand in the future, the potential for private involvement is clear.
power generation entails the adoption of one of two methods: either the
sale of existing power plants, or the initiation of projects where the
project sponsor designs, finances and constructs new facilities, in return
the power utility's undertaking to purchase the power produced by the
facility at a price set in accordance with an agreed formula.
As well-awared of
power development to the prosperity of the countries, each government
in Asia envisions the liberalizing and reforming the Electricity Supply
Industry to reduce government burden in power sector. They welcome the
private sector involvement and promote competition to achieve lower power
tariffs and enhance levels of customer service. The countries moving ahead
with electricity industry reform are Indonesia, Korea, Malaysia, Singapore,
Philippines, China and Thailand. They announce their policies for competitive
bidding market through a power pool and privatization of their generation
In 1995, the Singapore Government decided to separate, under the new industry
structure, the generation, transmission and supply function. While transmission
and distribution business remains a natural monopoly, electricity generation
and supply business are open to competition. After addition of more players
in electricity generation market, Singapore's Power Pool commenced its
operation in 1998.
The Philippines congress is in the process of passing the enabling law
for the power sector restructuring that the Department of Energy has been
pursuing. Initially, the National Power Corporation's generation assets
will be sold to new generating companies to introduce competition..
Moreover, China is currently in preparation for establishment of power
pool; the pilot projects are planned to be implemented in Shanghai, Chantung
and Chue Chiang in 2001.
Meanwhile, Indonesia power sector policy is obvious to set up power pool
for bulk supply.
The Malaysia Government plan envisages the separation of Tenaga National
Berhad into generation and transmission companies including power pool
Japan and India
Japan and India are carefully considering their power reform approach.
The Korea Government has encouraged foreign direct investment and privatization
of state-owned public enterprises. Based on the restructuring models of
various countries, the Korean Electricity Industry Restructuring Committee
has developed short-run initiatives by firstly splitting up the power
generation sector of Korea Electric Power Corporation into several power
generation companies to introduce competition and secondly by promoting
efficiency by cost reduction and gradual privatization of the split-up
power generation companies for long-term initiatives. Also, power distribution
sector will be split into several power distribution companies to introduce
competition in the wholesale and retail sectors.
For Thailand, the initial reforms centered on the generation sub-sector
and included the introduction of the Small Power Producer Program, which
placed a high priority on the use of renewable energy resources, the creation
of the Electricity Generating Company and the Independent Power Producer
Program. In May 1998, the Thai Government issued a policy statement for
the privatization of the energy sector. This document set out a clear
direction for the future reform of the generation sub-sector involving
the divestiture of all generation from the Electricity Generating Authority
of Thailand and its transformation into a transmission company.