Thailand poised to launch new round of renewable energy auctions

Thailand is once again gearing up to issue new regulations for the procurement of electricity generated from renewable energy by the private sector. In May 2022, the National Energy Policy Committee (NEPC) approved the opening of a new quota for purchasing electricity from renewable energy sources under a Feed-in-Tariff (FiT) scheme between 2022-2030 for power plants with no fuel costs (“New RE Quota”) in accordance with the national Power Development Plan 2018-2037, First Revision (PDP 2018 Rev.1). Under the PDP 2018 Rev.1, Thailand aims to increase renewable energy’s share in the country’s overall power mix to at least 50% by 2050, as part of its climate pledge to achieve carbon neutrality and net-zero greenhouse gas emissions by 2050 and 2065, respectively.

Accordingly, the Energy Regulatory Commission (ERC), as delegated by the NEPC, has issued draft regulations setting out the requirements, terms and conditions for the New RE Quota, which recently underwent a public hearing process from 30 June to 6 July 2022. According to the ERC’s draft regulations, the key elements of the New RE Quota include:

(1) Purchasing Targets:

• State distribution utilities will purchase electricity generated from small power producers (SPPs) or very small power producers (VSPPs) utilizing the following renewable energy sources (in order of priority): (i) biogas (wastewater/waste), (ii) wind, (iii) ground-mounted solar coupled with battery energy storage systems (Solar+BESS) and (iv) ground-mounted solar.
•  Power purchase agreements (PPAs) will be awarded on (i) a “non-firm” basis for biogas, wind and solar power plants with a contracted capacity of not more than 90 MW; and (ii) a “partial-firm” basis for Solar+BESS power plants with a contracted capacity of more than 10 MW but not exceeding 90 MW, each with a term of 20-25 years.
• Total target MW of the New RE Quota is 5,203 MW (335 MW for biogas, 1,500 MW for wind, 2,368 MW for ground-mounted solar, and 1,000 MW for Solar+BESS).

(2) FiT Rates:

FiT rates for the projects under the New RE Quota will be as follows:

(3) Participant Qualifications:

• Participants must be juristic entities registered in Thailand and must not be government agencies or state enterprises.
• Projects awarded a PPA under the New RE Quota must be new projects and not existing ones operating under any other scheme or quota, or which has any other commitment with the government, or which had previously been evaluated by a government agency and found to have suffered issues or failed to be successfully developed under a previous quota.

(4) Other conditions to be set in the PPAs

• Any Renewable Energy Certificates (RECs) derived from the projects under the New RE Quota must belong to government agencies.
• Biogas power plants are prohibited from using any type of fossil fuel to assist in the generation of power (except during the commissioning phase only).

The New RE Quota is expected to generate new investment of up to THB 200,000,000 million in Thailand’s energy sector and represents an excellent opportunity for both foreign and local investors alike to ramp up their footprint and market share in the highly competitive Thai renewable energy space. We will keep you posted on the official ERC regulations for this scheme once it is published in the Royal Gazette.