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Thailand

Thailand

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Published by Susana Lopez Lopez

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Published by: Susana Lopez Lopez on Feb 10, 2012
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02/10/2012

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 T
HAILAND
S
 A 
PPROACH TO
P
ROMOTING
C
LEAN
E
NERGY IN THE
E
LECTRICITY 
S
ECTOR 
 
Dr. Pallapa Ruangrong. Energy Regulatory Commission of ThailandIn Thailand, efforts have been made to diversify away from the use of oil and natural gas for powergeneration by, among others, increasing the use of indigenous renewable energy resources and using fuelenergy-efficient technologies for power generation so as to enhance the security of national powersupply as well as to reduce environmental impact. Various incentive and promotional measures havebeen applied -- most importantly the provision of pricing subsidy/feed-in tariffs via the Small & Very Small Power Producer (SPP & VSPP) programs using renewable energy or cogeneration andmicro-hydro projects, promotion of the use of clean coal technology for power generation, including the recent serious deliberation on the use of nuclear power generation.
P
ROVISION OF
P
RICING
S
UBSIDY FOR 
ENEWABLE
SPP
S VIA 
C
OMPETITIVE BIDDING
 In 2001, consideration was made by the government on the past achievement and SPPparticipation in the SPP program since its launch in 1992. A number of SPPs, using fossil fuel e.g.coal and natural gas or using renewable energy e.g. bagasse, rice husks, wood chips and palm shells,had proposed sale of capacity to the grid system. However,
it was recognized that capital cost was the most important barrier affecting the competitiveness and hence the viability of the renewable energy power generation 
. Therefore, in May 2001, the government initiated the “pricing subsidy” in the form of energy payment adder for electricity generated by renewable energy for a period of five years at a maximumrate of 0.36 baht/kWh, under a competitive bidding. A budget of 3,060 million baht (about US$ 90million, at a rate: US$ 1 = 34 Thai Baht) was allocated from the Energy Conservation Promotion Fundfor this purpose. About 300 MW generated from renewable energy was expected under this pilotscheme. As at 31 October 2001, that is, prior to the final consideration of the proposals submitted underthis project, 47 SPPs (1,958 MW) had supplied power to the grid, but only 24 SPPs (282.4 MW) usedrenewable energy as fuel.Under this pilot scheme, 20 new SPPs, with a total proposed sale of 243.3 MW to the grid, havebeen awarded the pricing subsidy, accounting for a total subsidy of 1,401 million Baht, or an averageadder rate of 0.17 Baht/kWh. However, only biomass projects could participate in the competitivebidding because the cost of energy, using biomass as fuel, was cheaper than other renewable energy projects, so the aim of fuel diversification, which is the key to affordable and reliable electricity, hadnot been fully achieved.
P
ROMOTION OF GREATER USE OF RENEWABLE ENERGY FOR 
P
OWER 
G
ENERATION THROUGH THE
 VSPP
 
P
ROGRAM
 In mid-2002, the government, via the two power distribution utilities i.e. the Provincial Electricity  Authority (PEA) and the Metropolitan Electricity Authority (MEA), announced power purchasefrom VSPPs with capacity supply to the grid
 
<1 MW. This program has been initiated because the existing SPP regulations of EGAT are not designedfor power producers that are smaller than 1 MW.
If small-scale power producers using renewable energy,wastes or residues as fuel have to comply with the SPP regulations, a substantial cost for grid connection will be required, making the projects uneconomic 
. This is aimed, among others, to promote greater use of non-conventional energy for power generation, to promote efficient use of domestic energy sources andto distribute power generation to rural areas and encourage public participation in the powergeneration. The main targets of this program are pig farms and food processing industries. The
Forum on Clean Energy, Good Governance and Regulation16 – 18 March 2008 Singapore1
 
manure and organic wastes from the farms and factories can generate biogas which can then be usedas fuel for power generation.Later, on 4 September 2006, the government, via the National Energy Policy Council (NEPC),approved
 
the
increase of capacity purchase from VSPPs from 
1 MW to
10 MW each 
. Also, the technicalinterconnection restrictions and requirements were revised to facilitate power purchase from VSPPs.
P
ROVISION OF
“A 
DDERS
TO
S
 TIMULATE
M
ORE
P
OWER 
G
ENERATION
U
SING
ENEWABLE
E
NERGY 
 
On 26 December 2006, the NEPC approved the increase of power purchase from SPPs (as a whole) from 3,200 MW to 4,000 MW.In order to induce more investors to produce electricity from renewable energy,
in 2007 theMinistry of Energy set a target to purchase power from SPPs using renewable energy,totaling 530 MW
. Also initiated was another supportive scheme, “Adder Provision”
-- an additional energy purchasing price on top of the normal prices that power producers will receive when selling electricity to the Power Utilities 
. The amounts of adders vary, depending on the technology used. The provision of adders will be for a period of 7 years as from the Commercial Operation Date (COD).
 Adder Rates
 
for SPPs Using Renewable Energy
For the required 530 MW from SPPs using renewable energy, the provision of Adder is dividedinto:
- “Fixed Adder” (230 MW) --
the adder rate for SPPs using 
municipal solid waste
&
 wind
is2.50 Baht/kWh (about US¢ 7.35), and for SPPs using 
solar energy
is 8.00 Baht/kWh (about US¢23.53).
- “Adder Bidding” (300 MW) --
for SPPs using 
other types of renewable energy
, such as ricehusks or wood chips, the adder is provided via a competitive bid. However, the maximum adderrate is set at 0.30 Baht/kWh (about US¢ 0.88).
Fuel Adder(Baht/kWh)Purchase Capacity(MW)
MSW 2.50
 100 Wind2.50
Fixed115Solar8.00
 15Other RE Types 0.30 } Bidding 300
 Total 530
 To implement the Adder Bidding for purchase of 300 MW, a Request for Proposals (RFP) fromSPPs using renewable energy (other than MSW, wind and solar energy) to bid for the Adder wasissued on 1 May 2007. The Adder Bidding has been finalized since 12 October 2007, with 7 SPPproposals approved, accounting for a total proposed sale of 335 MW (average price = 0.297 Baht/kWh). The selected SPPs are obliged to sell electricity to the grid by 2012.
Forum on Clean Energy, Good Governance and Regulation16 – 18 March 2008 Singapore2
 
 Adder Rates
 
for VSPPs
 On 6 December 2006, the government approved the Adder Rates for
10 MW VSPPs thatsupply power to the grid, at the following 
“fixed rates
”:
Fuel/Technology Adder (Baht/kWh)
Biomass 0.30 (US¢ 0.88)Biogas 0.30Mini-hydro (50-200 kW) 0.40 (US¢ 1.18)Micro-hydro (< 50 kW) 0.80 (US¢ 2.35)MSW 2.50 (US¢ 7.35) Wind 2.50Solar 8.0 (US¢ 23.53)
Remarks: 1) PEA/MEA announcements issued on 1Feb07 and 2Feb07 respectively.2) VSPPs must submit the proposal to sell electricity by Dec 2008.3) Rate used: 34 Baht/US$.
 After the announcement was made in early February 2007 by the two Distribution Utilities, i.e.the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA), on theprovision of “
 Adder,
” overwhelming response has been received. The number of participating  VSPPs has considerably increased from 23 VSPPs (13 MW) in March 2007 to 264 VSPPs inDecember 2007, making a total proposed sale of 804.83 MW. Of these, 67 VSPPs are already onstream, accounting for a total of 74.60 MW supply to the grid.
Special Adder Rates for Renewable Energy SPPs/VSPPs in the Three SouthernmostProvinces
In order to alleviate the investment risks for power generation from renewable energy in thethree southernmost provinces, i.e. Yala, Pattani and Narathivath, the NEPC passed a resolution on 4 June 2007 approving the Special Adder Rates for renewable energy SPPs/VSPPs located in the threeprovinces. Accordingly, PEA and EGAT have issued an announcement on these Special AdderRates on 13 and 23 July 2007 respectively.
Fuel/TechnologyExisting Adder
(Baht/kWh)
Extra Adder
(Baht/kWh)
Special Adder for SPPs/VSPPs inthe 3 Southernmost Provinces
(Baht/kWh)
Biomass, Biogas 0.30 1.0 1.30Mini Hydro (50-200 kW) 0.40 1.0 1.40Micro Hydro (< 50 kW) 0.80 1.0 1.80MSW 2.50 1.0 3.50 Wind 2.50 1.50 4.00Solar 8.00 1.50 9.50
EVIEW OF
 A 
DDERS FOR 
 W
IND AND
S
OLAR 
E
NERGY 
P
ROJECTS
 
So far, there has been no SPP/VSPP using wind or solar energy participating in the powerpurchase program although the designated adders have been announced. Following a policy research study, it is found that, although the designated adders is added to the purchasing prices forSPPs/VSPPs, power generation using wind or solar energy is still not cost-effective. To address thisproblem and to enhance fuel diversification, on 16 November 2007, the NEPC approved theadjustment of adder rates to encourage investment in power generation using wind or solar energy asfuel. That is, for wind-energy power generation, the adder is increased from 2.50 to 3.50 Baht/kWh;
Forum on Clean Energy, Good Governance and Regulation16 – 18 March 2008 Singapore3

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