In order to discover Thailand’s sustainable future we have a meeting with Doctor Sopitsuda Tongsopit (Jiab). She works for Chulalongkorn University’s Energy Research Institute. Together, we have a very interesting discussion about the energy aspects in Thailand, and the Renewable Energy prospects there. Jiab has already very kindly prepared us a small presentation about the subject. Below is the information summarized from her presentation:

Energy mix and future trends

Like many of Thailand’s neighboring countries, it has experienced a rapid growth of power demand, averaging 3-4% per year. And yet Thailand has limited resources; it is heavily dependent on natural gas as fuel for power generation. Fuel diversification is needed in order to increase energy supply security of the country. Currently, in Thailand, the Energy mix for power generation is the following one: 68% from gas, 22% from coal, 5% imported, 4% from hydro and 1% from oil. Thailand is producing gas, that’s why the share of the gas is so important in the mix. Today, the country is extracting domestic natural gas from the Gulf of Thailand and importing gas from Myanmar. More imports are planned in the future, mainly from Liquefied Natural Gas. Thailand also imports electricity from Laos. In fact, Thailand invested strongly in developing hydroelectricity in that country. In the future, the share of gas should be reduced, in order to lower the country dependency on a single raw resource. Also, coal share should be reduced, to decrease the carbon emissions and pollution. There are plans to build two nuclear plants by 2025, powering 2000 MW. Finally, Thailand is making big efforts to develop Renewable Energy in the country.

Thailand’s supportive Renewable Energy framework

Thailand has a very strong and supportive framework to support renewable energy. The Alternative Energy Development Plan or AEDP aims to achieve 25% of energy consumption from renewables by 2021. In order to reach that target, it includes a package of very supportive measures:

– The Revolving Fund has been established to assist Energy Efficiency (EE) and Renewable Energy projects. Revolving Fund is a rather simple soft loan program, providing capital investment with an interest rate of 4% or less. These low interest loans are available from commercial banks for up to $1.6 million per project. Using banks as implementing arms also means that the loan takers are quite well-established companies with good financial standing.

– The Department of Alternative Energy Development and Efficiency (DEDE), then, developed the ESCO Fund to facilitate small EE investment for SMEs. The ESCO Fund can provide, for example, equity investment, venture capital, and equipment leasing. The ESCO Fund can also help the development CDM projects and invest in carbon credit market.

– In addition, Thailand also offers tax incentives for imported equipment related to renewable energy, including 8-year corporate income tax holiday and import tax exemptions for RE equipment.

– Biogas subsidy: Thailand has also provided strong support for biogas production from animal manure and industrial waste and wastewater in the form of subsidy (e.g., starch industry, palm oil industry, ethanol &alcohol industry, canning industry. The subsidy ranges from 20%-50% depending on the type of waste.

Thailand’s attractive pricing structure for renewables

Thailand’s Adder program is basically a type of feed-in tariff. Whereby an adder rate is paid on top of utilities’ avoided costs. The rates have been attractive so far especially because of the rising trend of the base tariff and ft. However, the government has been looking to change the rate structure to a fixed price feed-in tariff. And recent government briefings have looked to solar power and power generation from Napier grass as the first types of RE to get a fixed fit support.

The adder rates are distinguished by technology, scale of installations, and geography. the feed-in tariffs rates for different renewable energy technologies have been implemented since 2007 and adjusted in 2009 to include different scales of power production, and in 2010 the rate for solar has been adjusted down. For example, for biomass and biogas, we give higher rate for installations sized less than 1 megawatt. Special adder rates have also been offered in special areas such as the three southernmost provinces!this is where there have been constant unrests and violence. Special adder rates are also given to areas where the utility provide power from diesel power plants. Such areas include islands that are not connected to the grid system of the mainland.

Upcoming challenges for supporting renewables’ development

BIOMASS: The support for biomass generation in Thailand has been successful in terms of utilization of rice husks and bagasse from rice mills and sugar mills, which make up the majority of biomass fuels that have been developed since the VSPP & SPP program began. However, further development of biomass power lies in the utilization of other types of agricultural residues such as corn cobs, corn husks, rice straws, sugarcane top & leaves, cassava rhizhomes, and wood chips. The challenge of utilizing these fuels lies in organizing the logistics of the collection and transport of these scattered resources. Thailand still lacks professional logistics service that would allow effective management of these resources, which otherwise would be burnt in the field at the end of harvest season, causing local air pollution and regional haze.

BIOGAS: The production of power from biogas in Thailand has increased on a steady basis thanks to the government subsidy program, especially for the biogas production from animal manure and industrial wastewater. The support for biogas power production has made a tremendous impact in terms of creating energy from things that otherwise would cause local air pollution, odor, and nuisance to local communities, such as pig & cow manure or wastewater from starch plants. Based on the study of the Energy Research Institute, it has been found that additional growth of power generation from biogas is still possible. There is a potential of generating an additional 500 MW from 3 types of industrial waste, including the waste from the starch, alcohol, and palm oil industry. In addition, the future support of biogas can be accelerated by combining animal manure and energy crops such as napier grass. The research institute has conducted the feasibility of various forms of business models for investing in a power plant using napier grass as feedstock. They have found that an additional 800 Megawatts of power production from grass-based biogas can be supported with various schemes including a combination of subsidy and FiT.

SOLAR: Thailand is already a magnet for solar farm development. Solar farms whose installed capacity is greater than 1 megawatt makes up about 99% of the capacity that’s already on-grid and the majority of capacity in the pipeline. But opportunities remain for rooftop solar and the government has announced that they expect to release a rooftop FiT by the third quarter of this year.

WIND: Unlike in the North Sea or in, the average wind speed in Thailand is quite low at 4-5 m/s, with the exception of a few areas. There are more than 2,000 Megawatts of proposed projects in the pipeline. Many of these projects will have to encounter some obstacles, including access to land that is marked as conservation areas and yet have high wind potential and the inadequate capacity of the grid to handle the intermittency of the projects in the pipeline. In addition, most projects in the pipeline are large-scale wind farm SPPs. It remains to be seen whether these commercially available technologies match well with the wind conditions in Thailand. On the other hand, the technology for smaller scale VSPP wind farms haven’t been proven competitive quite yet, and it would require continuous R&D to ensure that low-speed wind can be fully utilized.