Degree of reliance on imported energy:
Thailand is a net importer of crude oil and a net exporter of petroleum products. The country imports over 60% of its total petroleum needs and almost 85% of its crude oil consumption, leaving Thailand highly dependent on global oil markets and volatile prices. About 78% of its crude imports originate from the Middle East, while another 8% are from other Asian suppliers. The country's oil import dependency has spurred the government to promote the use of other fuels such as natural gas, renewable sources, and biofuels as well as to boost crude oil and product stocks and to encourage investment in marginal field production.
Thailand's electricity imports have more than tripled in the past decade as the country's electricity demand growth continues and as grid interconnections expand. Thailand imported 10.8 GWh of electricity in 2011 from neighbouring countries Malaysia and Laos. EGAT currently imports electricity through a 300 MW interconnector with Malaysia to serve the southern provinces of Thailand.
Main sources of Energy:
Thailand had an estimated installed capacity of 32.4 GW in 2011.. Natural gas-fired generation consisted of over 60% of the capacity mix, with coal and renewable energy making up most of the remaining capacity. In order to meet increasing demand, the government plans to double net electric generation capacity to over 70 GW by 2030 with the largest additions to come from renewable sources and gas-fired plants.
Thailand has been highly dependent on natural gas for electricity generation. In 2012, it accounted for 67.5% of the total fuel consumption for electricity generation, followed by coal/lignite (19.5%), fuel oil & diesel (0.7.%), and the rest of renewable energy and other energy (paddy husk, bagasse, agricultural waste, garbage, biogas, black liquor and residual gas from production processes) (12.3%).
Solid biomass and waste have played a strong role as an energy source in Thailand. Most biomass feedstock is from sugarcane, rice husk, bagasse, wood waste, and oil palm residue and is used in residential and manufacturing sectors. Thailand has promoted biomass for heat and electricity, though growth has been very gradual due to industry inefficiencies and environmental concerns.
Thailand's primary energy consumption is mostly from fossil fuels, accounting for over 80% of the country's total energy consumption. Oil was 39% of total energy consumption in 2010, down from nearly half in 2000. As the economy expanded and industrialized, Thailand consumed more oil for transportation and industrial uses. Natural gas has replaced some oil demand and is the next largest fuel, growing to nearly a third of total consumption mix.
Electricity consumption in 2012 was 150 billion kWh. Over the past 10 years, electricity demand has been growing at about 770 MW per year or about 3.2% per year. The current installed capacity is 32,200 MW, with the majority of energy sources from natural gas (66%) and coal (20%). Non-hydro renewable energy contributes a minor (around 5%) but increasing share of total electric power generation.
Extent of the network:
Population access to electricity (2009, source: IEA): 99.3%
The growth in rural electrification in Thailand was relatively low in the early 1970s. Only 7% of poorer households had access to electricity. In the 1980s, with the implementation of the long-term national master plan for rural electrification by the Provincial Electricity Authority (PEA), access to electricity in poor households had remarkably increased, and by 1988, reached 74%. Electricity access had improved further in the 1990s, and reached 98% in 2000. Access to electricity by the non-poor households had crossed the 90% level in the mid-1980s, and had reached more than 99% by 2000.
High voltage transmission in the country operates at 500 kV. Thailand is connected with the power grids of Laos and Malaysia, with puchases totalling 1,288 MW from Laos and 300 MW from Malaysia in 2010.
Controversial electricity imports from Lao PDR, natural gas imports from Myanmar, and volatile global fossil fuel markets risks undermining the security of energy supply. Energy imports also represent an economic burden for the country, consuming almost 12% of gross domestic.
Calculations say that about 60% of the total energy demand is originating from imports and domestic resources, soon to be depleted. Thus, price volatility of fossil fuels is an increasing challenge for Thailand’s energy supply.
Potential for Renewable Energy:
Renewable energy, on the other hand, could be an option to ensure energy security and reduce dependence on foreign energy resources. With relatively good solar irradiation and large domestic biomass resources, as well as high potentials for decentralised power production, there are still various opportunities for the country to achieve its renewable energy targets. The high number of applications for solar power projects under the feed-in tariff has indicated considerable interest of investors. Many jobs have already been created in the construction industry and in the agricultural/biomass sector.
There is considerable potential for wind energy on a larger scale in Thailand, especially in the centre and in the Western regions of the country. The wind current in Thailand is rather light, thus it has been frequently overlooked. Unlike large wind turbines manufactured for the European and U.S. markets; the country needs small-sized wind turbines to comply with local conditions. The present capacity of low speed wind turbines in Thailand is 400-1,000 watts. The two major obstacles in using such turbines is the cost per unit of electricity generation and the lack of investment in Thailand for the low speed turbines. However, Thailand does forecast a large increase in use in the near future as these issues will be overcome.
Solid biomass and waste have played a strong role as an energy source in Thailand and comprise roughly 16% of energy consumption. Most biomass feedstock is from sugarcane, rice husk, bagasse, wood waste, and oil palm residue and is used in residential and manufacturing sectors. Thailand has promoted biomass for heat and electricity, though growth has been very gradual due to industry inefficiencies and environmental concerns.
The government has been sponsoring development projects of small hydro power plants for a new planned capacity of 350 MW. The Department of Alternative Energy Development and Efficiency (DEDE) and the Provincial Electricity Authority (PEA) are the main institutions involved with mini- and micro-hydro power plants. DEDE has also installed many village-level hydropower plants, and there is considerable potential for village-scale small hydro in east and central Thailand.
The annual average daily solar radiation in Thailand is about 5.0 to 5.3 kWh/m2/day, corresponding to 18-19 MJ/m2/day. High values, of about 20-24 MJ/m2/day, are recorded during April and May. The north eastern and northern regions receive roughly 2,200 to 2,900 hours of sunshine per year (equivalent to 6-8 sunshine-hours per day). Thailand currently uses solar cells for electricity generation and solar thermal units for thermal..
Local administration organizations in every province, municipalities, Provincial Administration Organizations (PAO), and Tambol (sub-district) Administration Organizations (TAO) are paying particular attention to solar cells as they are becoming increasingly important in rural remote areas, where there are no electricity transmission lines known as off-grid connections. The cells can undoubtedly be used for electricity generation for lighting systems on roads and energy for wastewater pumping in wastewater treatment systems.
Potential for Energy Efficiency:
Thailand’s total final energy consumption in 2008 was 71,092 ktoe, a marked increase of 25.7% from 2007. Industry was the largest consuming sector, accounting for 23,769 ktoe, or 33.4% of total final energy consumption. The second largest consumer was the transport sector, which consumed 17,799 ktoe in 2007. By fuel type, oil accounted for a 50.2% share (35,705 ktoe) of total energy consumption in 2007, followed by electricity and other sources (34.8%), coal (10.9%) and gas (4.1%). Efficiency improvements in the industrial sector alone could amount to a 20% energy use reduction.
The government has created a number of programs, to assist in energy auditing for large consumers, for example in the industrial sector, as well as to promote energy efficient practices, for example recycling, in many sectors. Funding is available from the government for energy efficiency projects from governmental organisations, NGOs, and the private sector. The ENCON Program, currently in its third phase, aims to achieve 7,820 ktoe of energy savings from the industrial and transport sector, and through DSM on households, businesses and the public sector, by the end of 2011.
- Promotion and development of ESCOs, particularly with regard to providing capital for EE projects.
- Incentives for EE projects: Revolving funds or soft loans, Zero interest loans and tax incentives.
- Saving target: 3190 ktoe in 2011.
- Recommendations to EGAT to reduce transmission & distribution losses, as well as intensifying DSM efforts, including load management programs.
- Promotion of public transport systems.
- Transportation Incentive Program, whereby transport operators’ efficiency is analysed, and/or investments are made available for efficiency improvements.
- Saving target: 3413 ktoe in 2011.
- Establishment of minimum energy performance standards (MEPS) for air conditioning, refrigerators, ballasts, FL, and CFL.
- Labelling program for appliances.
- Establishment of efficiency codes in buildings and for building materials.
- Promotion of efficient cooking equipment.
- Saving target: 1217 ktoe in 2011.
- Energy Conservation Program ECP, Phase 3, provides measures to reform institutions in the country to promote EE.
- Establishment of the Energy Conservation Fund to provide funding for EE projects.
- Public awareness campaigns.
The electricity sector in Thailand is still dominated by the state-owned Electricity Generating Authority of Thailand (EGAT). By 2011 EGAT had a market share of 47% followed by the IPPs (39%), small power producers (SPPs) (7%) and imports (7%).
Structure / extent of competition:
Under the government regulations, EGAT as the largest generator also has the sole right to purchase power from other private producers including neighbouring countries. The EGAT is also the only firm permitted to supply electricity to the distributors and retailers. Thus, there is no competition in the wholesale electricity market in Thailand. For the distribution and retail sectors, the markets are also under the monopoly of Provincial Electricity Authority of Thailand (PEA) and Metropolitan Electricity Authority of Thailand (MEA).
Thailand has adopted the enhanced single buyer model (ESB), in which EGAT is the sole buyer of electricity. In the generation system, EGAT is in charge of a dominant electricity supply, which presently owns approximately 47% (as of December 2011) of the total capacity in the country, while the rest are owned by private power companies in three categories, Independent Power Producers (IPPs), Small Power Producers (SPPs), Very Small Power Producers (VSPPs).
In addition to the electricity generation and acquisition, EGAT is also responsible for the country’s transmission system, as well as national and regional control centres. There are two distributing utilities in the Thai electricity system, namely the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA). The MEA is responsible for the distribution, sales and provision of electric energy services in Bangkok Metropolis, Nonthaburi and Samut Prakran provinces and the PEA serves the rest of the country.
Existence of an energy framework and programmes to promote sustainable energy:
Renewable and Alternative Energy Development Plan (2012-2021)
The Renewable and Alternative Energy Development Plan (2012–2021) sets the framework to increase the share of renewable and alternative energy to account for 25% of total energy consumption by 2021. This plan promotes the use of renewable energy (such as wind, solar, and biomass), especially for power and heat generation, and it supports the use of transport biofuels, including ethanol-blended gasoline (gasohol) and biodiesel.
National Power Development Plan (PDP)
The Electricity Authority of Thailand (EGAT) formulated a national power development plan for the period of 2010-2030, known as PDP 2010, within the framework of the Ministry of Energy’s policies. This PDP is dubbed the “green” PDP as it incorporates more green energy into the plan. It replaces the former PDP 2007 plan and its revisions. The plan was first approved by the National Energy Policy Council (NEPC) and the Cabinet in November, 2010. After the Fukushima NPP Accident, the plan has been revised twice. The third and current (as of March 2013) revision was approved by the Cabinet in June, 2012.
The plans have been used as a guideline for planning the construction of EGAT’s new power plants, power purchase from independent power producers (IPPs), small power producers (SPPs) and neighbouring countries, as well as transmission system development to accommodate these new power capacities. According to the current revision of PDP 2010, the net additional capacity during 2012-2030 is 55,130 MW (this amount includes the additional capacity from new power plant projects and some power purchased from SPPs and VSPPs). When adding the net additional into the current installed capacity as of December 2011 and subtracting the capacity of retired power plant from the system, the total installed capacity becomes 70,686 MW in 2030.
The strategies of PDP 2010 focused on:
- Security and adequacy of the power system, following the policies of the Ministry of Energy (MoEN) on environmental concerns;
- Promotion of energy efficiency and renewable energy to be in line with the Energy Efficiency Development Plan (EE Plan 2011-2030) and the Alternative Energy Development Plan (AEDP 2012 - 2021);
- Promotion of cogeneration systems for efficient electricity generation.
Energy Efficiency Development Plan 2011–2030
On the demand side, Thailand adopted a 20-year Energy Efficiency Development Plan 2011–2030, which aims to improve energy intensity by 25% in 2030 compared to the 2010 levels.
Thailand Energy Efficiency Revolving Fund (TEERF)
TEERF was established by the Government and managed by the Ministry of Energy, Department of Alternative Energy Development and Efficiency (DEDE). The objective of the TEERF is to provide access to capital for energy efficiency projects, increase awareness of energy efficiency opportunities and improve procedures and implementation of the projects.
Development and Promotion of Renewable Energy Entrepreneurs
In 2010 The Energy Policy and Planning Office (EPPO) launched this program to endorse the building of large scale entrepreneurship in green technology, particularly on renewable energy. Principally, EPPO acts as a promoter and a facilitator for local entrepreneurs to invest in new technologies. Once the prototypes are ready, EPPO will support them on the expansion of technologies at a national level.
Current energy debates or legislation:
How to satisfy Thailand's growing demand for power without ruining the environment, disrupting communities or causing political tensions with neighboring countries is a subject of fierce debate in Thailand, the Mekong region's economic giant. Since the mid-1960s, Thailand has constructed more than forty major dams for power generation and irrigation, resulting in significant opposition amongst rural communities. Villagers' resistance to projects such as the Pak Mun and Rasi Salai Dams have essentially halted new dam construction in Thailand, although these communities are still fighting for permanent decommissioning of the dams to restore their lost livelihoods.
It is critical for Thailand to reduce dependence on natural gas for electricity generation amid dwindling domestic natural gas production. One way is to introduce nuclear power. One nuclear power plant unit with a capacity of 1,000 MW is planned to start operations in 2026, and a second unit in 2027.
Major energy studies:
Thailand is also a member of the Association of South-east Asian Nations (ASEAN), and is involved in the regional integration of power networks and energy sector development afforded under the organisation.
The ASEAN Plan of Action for Energy Cooperation (APAEC) 2010-2015 is the third of a series of regional energy implementation plans. It covers the energy component of the ASEAN Economic Blueprint 2015 and aims to enhance energy security, accessibility and sustainability for the ASEAN region to accelerate implementation plans of the following program areas:
- ASEAN Power Grid (APG)
- Trans-ASEAN Gas Pipeline (TAGP)
- Coal and Clean Coal Technology
- Renewable Energy
- Civilian Nuclear Energy
- Energy Efficiency and Conservation
- Regional Energy Policy and Planning
Role of government:
Thailand’s policies related to energy, including electric power and renewable energy policies, are drafted and proposed by the Ministry of Energy (MoE). Policies related to electric power and natural gas transmission are regulated by the Energy Regulatory Commission (ERC).
The Energy Policy and Planning Office (EPPO), which is part of Thailand's Ministry of Energy, oversees all aspects of the country's energy policies, including the oil, natural gas, and power sectors. The National Economic and Social Development Board oversees large energy infrastructure projects and also assists in the policy planning process. The National Energy Policy Council (NEPC) approves all plans. The Department of Mineral Fuels regulates the upstream sector of Thailand's hydrocarbons and is responsible for promoting oil and gas exploration and development including licensing rounds.
The Ministry of Energy is also responsible for the management of Thailand's Oil Stabilization Fund that regulates and, in effect, subsidizes retail and wholesale petroleum product prices. The government is attempting to limit the subsidies for LPG and diesel, but pricing reforms are typically caught between the dual pressures of protecting consumers and industry against inflation and the fund's depletion. As a first step, the government's goal is to raise LPG prices, at least for industrial and petrochemical consumers, as part of pricing reforms.
Government agencies in sustainable energy:
Organisations also responsible for energy include the:
- Office of the Minister—responsible for coordination with the Cabinet, the parliament and the general public
- Office of the Permanent Secretary—establishes strategies, translates policies of the ministry into action plans, and coordinates international energy cooperation
- Department of Alternative Energy Development and Efficiency (DEDE)—promotes the efficient use of energy, monitors energy conservation activities, explores alternative energy sources, and disseminates energy-related technologies
- Department of Energy Business—regulates energy quality and safety standards, environment and security, and improves the standards to protect consumers’ interests
- Department of Mineral Fuels—facilitates energy resource exploration and development
- Energy Policy and Planning Office (EPPO)—recommends economy-wide energy policies and planning
- Electricity Generating Authority of Thailand—the state generation enterprise
- Petroleum Authority of Thailand (PTT) Exploration and Production (E&P) Public Company Limited and the Bangchak Petroleum Public Company Limited—two autonomous public companies
- Energy Fund Administration Institute—a public organisation
- Energy Regulatory Commission and the Nuclear Power Program Development Office— two independent organisations.
Managing Committee on Power Generation from Renewable Energy Promotion
On June 28, 2010, the National Energy Policy Commission (NEPC) passed a resolution to reduce the Adder rate for solar projects and establish a new committee that would oversee policy formulation and regulation of renewable energy policy. The Managing Committee on Power Generation from Renewable Energy Promotion (hereafter, the “Managing Committee”) was appointed to coordinate, follow up, and ensure that the implementation of measures promoting power generation from renewable energy is in compliance with policy.
Energy planning procedures:
- a bid bond of 200 Baht/KW (6USD/kW) paid to the utility for project sized equal or more than 100 kW
- applicable retroactively to projects without PPAs before August 2009
- Utilities' acceptance criteria no longer based solely on technical availability of the grid
- additional criteria: evidence of land access rights (for the case of wind applications); evidence of fuel sources and fuel); fuel utilization plan (this for the case of biomass, biogas and MSW projects; Workplan until SCOD date
Accepted (to sign PPA):
- Approved projects will be chosen to sign PPAs with the utilities based on additional criteria
- additional criteria: project's readiness in four aspects: land, loan, technology and permits from other agencies; agreement to pay for grid upgrades (if needed); EIA report (for projects required to undertake EIA)
- projects with PPAs have to submit progress reports within the 6 months before the SCODs
- after the PPA has been signed, any SCOD postponement request will be assessed based on the four aspects of project's readiness; extension is allowed up to 6 months after the first SCOD
- a 6-month grace period for projects that cannot meet the SCOD deadline and are still in contact with the utilities
- a contract termination for projects that are not in contact with the utilities.
Energy regulator Date of creation:
The regulatory framework for the Thai energy sector was reformed in December 2007 with the passage of the Energy Industry Act. This Act established the principles of the regulatory framework for the power and gas sectors and the institutional arrangements for the separation of policy and regulation. The Act provides for the establishment of the Energy Regulatory Commission (ERC) and the seven Commissioners were appointed in February 2008. (ERC, http://www.erc.or.th)
Degree of independence:
The ERC is a regulatory agency set up separately from the Ministry of Energy and other government departments but we work within the policy framework of the National Energy Policy Council.
The Energy Regulatory Commission of Thailand is a separate entity under its own law but does not act as an independent agency in the common interpretation of the term. The Thai administrative tradition is for policy making by consensus among related agencies. Multi-agency policy and regulatory committees are common. Further, the creation of the Commission was done through the separation of the regulatory and policy functions previously carried out by the National Energy Policy Commission. Consequently, time is needed to clarify the definition of different aspects of regulatory policy.
Regulatory framework for sustainable energy:
In terms of specific instruments to promote renewable energy in electricity production, Thailand enacted a Small and Very Small Power Purchase Agreements act, which regulated the connection of small producers to the electricity grid and the sale of their electricity. This policy also acts as base for the feed-in tariff for solar, wind, waste, biomass, biogas, mini and macro hydro power, passed in 2007 and amended in 2009.
Designed as a premium feed-in tariff, the law regulates the payment of technology specific premiums on top of a regular electricity tariff. Interestingly, it awards power producers with an extra “adder” for systems installed in three provinces in Southern Thailand as well as for systems generating RE electricity replacing diesel in the Provincial Electricity Authority (PEA) system.
Modelled on the UK’s Office of the Gas and Electricity Markets, the ERC’s mandate includes:
- input and review of the national energy policy,
- input and review of the Power Development Plan,
- review and comment on the investment plans of the electricity industry, the national gas procurement plan and the energy network system expansion plans,
- development and implementation of customer service standards,
- development and oversight of service provision standards,
- surveillance, inspection and management of licensees in the generation, transmission and distribution sectors,
- development of regulatory codes and standards,
- establishment of stakeholder engagement processes,
- disbursements and administration of the ‘Energy Fund’,
- oversight authority in respect of IPP and PPAs,
- development of regulations and engineering safety standards and the certification of equipment/devices,
- supervision and development of energy consumer protection protocols, including the appointment and operation of ‘Regional Energy Consumer Committees’ (RECCs),
- management and review of electricity tariffs and applications for tariffs,
- adjustment and development of a ‘methodology’ for tariff calculation,
- oversight and responsibility for the security and reliability of the power system, and
- responsibility for promoting competitive practices in the industry.
Role of government department in energy regulation:
The ERC is a governmental organisation, chaired by the Prime Minister. Overall management of the energy sector is the responsibility of the National Energy Policy Council, in addition to the Energy Policy Committee, two organisations established to work in conjunction to manage the sector. The Department of Energy Business is responsible for regulating the quality of service provided by the various companies and organisations operating in the sector.
A major impediment to Thailand’s renewable energy development has been the lack of integration of RE plans with Thailand’s long-term energy planning process. Thailand currently has six separate long-term national energy plans for each type of energy, proposed and overseen by different government divisions. There is no overarching plan to ensure policy coordination and the accomplishment of policy goals. The most immediate manifestation of this policy ambivalence has been discontinuous support for the Adder measure, which -when operational- is one of the major mechanisms that will help the country meet its renewable energy targets. Discontinuous support for the Adder, in turn, has created a high level of uncertainty for investors.
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