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THAILAND’S ENERGy FUTUREf e a t u r e s

Written by: John Diecker

Recently announced delaysin the implementation o gas and coal-fred power

generation projects being developedby independent power producersas well as difculties in sitingthe proposed nuclear generationproject o the Electricity GeneratingAuthority o Thailand means thatthe country’s growing demand or

electricity will need to be satisfed byother sources. Fortunately, Thailandpossesses considerable renewableand alternative energy resources thatcan be tapped to make up or thisexpected shortall in power generationrom conventional sources.

Power Generation from

renewable enerGy

While several thousand megawattso power production rom renewableand alternative sources have beenproposed by developers, only a ewhundred megawatts are currently beingsupplied to the Thailand power system.This is attributed mainly to the lacko technical and fnancial resourcespossessed by the (mostly small)developers.

Biomass is by ar the largest singlecontributor to power generation romrenewable energy sources in Thailand.Most o the successul larger projectsare integrated into the rice and sugarmills that are typically also the project

owner. The large quantities o ricehusk and bagasse produced by themills provide energy or the millingprocess with additional electricityproduction or export to the ProvincialElectricity Authority or MetropolitanElectricity Authority. Stand-alonerice husk-fred projects have beendeveloped with varying degrees o success depending mostly upon thereliability o uel supply.

Other types o biomass, including rice

straw, corn cobs, corn stover, cassavarhizomes and ruit tree trimmings, areabundant and inexpensive. Projectsdeveloped to utilize these typeso agricultural waste are normallylimited by the constraints o uelcollection and storage to only acouple o megawatts, at most. Withproper implementation however,these projects hold great potential orinvestors.

Biogas rom waste streams createdduring the processing o agricultural

products like cassava and palm oil aswell as rom animal manure has seenconsiderable development in recentyears. This is most likely the secondlargest source o renewable energy

 An Overview of Renewable and Alternative Energy for Electric PowerGeneration in Thailand

Thailand possesses considerable renewable and alternative energy  resources that can be tapped to makeup for this expected shortfall in power 

 generation from conventional sources.

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or power generation in Thailand,with most projects being developedand owned by agricultural processing

acilities.

Several mini and micro hydro projectshave been developed, in many casesby government agencies, in some o the more remote parts o the country.Most o these serve communitieswithout other access to the electricaldistribution network or whose powerwas previously provided by expensivediesel generation.

Municipal solid waste projects have

been requently proposed but muchless requently implemented. Bythe time municipal waste reachesthe landfll, much o the readily-combustible material has beenremoved. The remaining materialcontains a very high proportion o vegetable and ood wastes and hasa high moisture content. This makesit unattractive or conventionalcombustion technologies. Othertechnologies may be easible butthey, along with power productionrom landfll methane, are difcult

to implement due to resistance tochange in the status quo on the part o landfll owners and garbage collectionoperators.

A ew wind power projects havebeen implemented, largely on anexperimental basis, in several parts

o the country. Many more areproposed. The relatively low averagewind speeds experienced over mosto the country, with the exceptiono some parts o the South, tend todiscourage most developers rompursuing these types o projects.

Mostly due to their relativelyhigh capital costs, solar powerprojects have thus ar seen limiteddevelopment in Thailand. Severalsolar photovoltaic power plants,

including some larger ones ownedby existing energy companies, arecurrently being developed, however,which indicates that solar energy willprobably contribute an increasinglylarger percentage o the country’spower generation mix.

Government incentives

The Thai government hasconsistently provided incentivesand support to the developers o projects that utilize alternative and

renewable energy or the productiono electricity. These currently includespecial taris, tax incentives andownership privileges.

Privately-owned renewable andalternative energy projects thatproduce electricity under the Small

Power Producer (SPP) and Very SmallPower Producer (VSPP) programsare eligible or special tari “adders”that are paid during the frst seven toten years o operation. These addersvary depending upon the source o renewable or alternative energy. (SeeFigure 1) Additional payments areavailable in areas where the projectsreplace generation that is currentlyprovided by diesel-powered sourcesand in the three southern-mostprovinces o the country.

The amount o tari adders iscurrently under review by the Ministryo Energy. Among others, changes areanticipated in the coming months thatwill take into account the rising costo locally-available biomass as wellas the declining costs o solar photo-voltaic panels in the world market.

Thailand’s Board o Investment(BOI) provides numerous specialtax and other incentives to promotethe development o renewable and

alternative energy projects outside o Bangkok. In addition to normal BOIpromotional privileges such as onehundred percent oreign ownership,land ownership rights, work permitand visa acilitation, and unrestrictedoreign currency remittances, the BOIoers:

• Corporateincometaxholidayofuptoeight years with no cap;

• 50%reductionincorporateincometax or an additional fve years;

• Reductionorexemptionofimportduties on machinery and equipment;and

• Taxdeductionsforinfrastructureconstruction and installation costs.

Periodically, programs are also madeavailable by the government to providedebt and equity fnancing as wellas technical assistance to projectdevelopers.

 John Diecker, Managing Director

o APT Consulting Group Co., Ltd.(www.aptthailand.net), a Thailand-based engineering, planning and consultingfrm, can be reached at: jdiecker@aptthailand.com

Figure 1: Special Tariff “Adders” for Renewable or Alternative Energy 

Fuel/TechnologyAdder

(Baht/kWh)Duration(years)

Biomass/Biogas

Capacity ≤ 1 MWCapacity > 1 MW

0.500.30

77

Mini Hydro (50 – 200 kW) 0.80 7

Micro Hydro (< 50 kW) 1.50 7

Municipal Solid WasteLandfll GasThermal

2.503.50

77

Wind

Capacity ≤ 50 kWCapacity > 50 kW

4.503.50

1010

Solar 8.00 10