Minimize Construction Costs of Extending the Grid 



Expanding the national electricity grid to poor rural areas can be very expensive because populations are generally small and widely dispersed. Thailand has shown, however, that there are a number of effective ways to minimize costs of grid extentions. The Thai Provincial Electricity Authority has successfully cut costs by standardizing the distribution system as well as all equipment and components used, and by procuring locally manufactured materials. With these cost savings, the PEA has been able to electrify an additional 800 villages.


The idea: 

Most poor rural areas in the developing world have widely dispersed populations and low population density and the construction costs of expanding the grid tends to be very high and limit the number of villages that can be connected. In Thailand, the Provincial Electricity Authority (PEA) has several strategies to minimize construction costs of expanding the grid.

The PEA has instituted a wide-reaching policy of system standardization. During the early phase of Thailand's grid expansion programme, PEA engineers worked closely with the Energy Generating Authority of Thailand (EGAT) to establish over-reaching standards and systems. On this basis PEA's engineers selected 33kVlines for the South (which often experiences severe thunderstorms) and 22kV lines for the rest of the country as the standard distribution system. This early standardization helped to control construction costs and increase efficiency.

The PEA also standardized all equipment and components used for constructing the distribution systems, and this has allowed bulk purchasing of equipment, which effectively reduced procurement, material handling and equipment purchasing expenses. It also significantly reduced the risk of equipment shortages, and provides project managers with an efficiency means of handling materials. This standardization has also allowed technicians to become more familiar with a limited number of components. This has reduced technical difficulties and made technicians better able to complete their tasks on time and within the allocated budget.

Local procurement has also played an important role. Imported materials can be expensive, and generally require a longer procurement time - resulting in delays in the construction schedule. The PEA relies mainly on locally made or assembled components, and this has also significantly reduced construction costs and ensured a steady supply of construction materials. With the cost savings made from purchasing locally manufactured concrete poles and developing local capacity to produce wires and cables, the PEA has been able to electrify over 800 additional villages.

The Thai experience shows us that although there are considerable construction costs involved with extending the national electricity grid, effective measures can be taken to ensure that these costs are kept to a minimum. The result of such measures is that more rural communities can ultimately be connected.


Where and When: Thailand, 1970-present.

Initiated By: The Thai Provincial Electricity Authority.