Chris GreacenChiang Mai, Thailand

24 January 2013

Grid-connected renewable energy in Thailand under the VSPP and SPP programs

MEENet workshop, session 2

Palang Thai

• Access to grid• Feed-in tariffs• Low cost financing• Tax incentives

Thailand’s SPP+VSPP

$

Access to grid

Technical regulations:• Allowable voltage,

frequency, THD variations

• Protective relays• Communication

channels

Commercial regulations:

• Definitions of renewable energy, and efficient cogeneration

• Cost allocation• Standardized tariff

determination• Invoicing and

payment arrangements

• Arbitration

$

+ Standardized Power Purchase Agreement (PPA)

Access to grid

Small Power Producer (SPP) regulations:

• Started 1992• Fossil-fuel cogeneration and renewable energy

up to 90 MW (export to grid)• Low tariff offered for “non-firm” generators

made it difficult for most renewables.

Access to grid

Bangkok Cogen, Rayong, 115 MW

Map Ta Phut Olefins, Rayong, 70 MW Pluak Daeng, Rayong 70 MW

Laem Chabang, Chonburi 100 MW

4494 MW online + 4152 MW with signed PPAs... 75% fossil fuel

Lopburi solar PV – 73 MW (over 1,000 rai = 160 hectares)

•Si

gned

PPA

s fo

r 767

MW

of P

V (S

PP +

VSP

P)

Evolution of Thai VSPP regulations• 2002

– VSPP regulations drafted, approved by Cabinet– Up to 1 MW export, renewables only– Tariffs set at utility’s avoided cost

• 2006– Up to 10 MW export, renewables + cogeneration– Feed-in tariff “adder”

• 2009– Tariff adder increase, more for projects that offset diesel

http://www.eppo.go.th/power/vspp-eng/ for English version of regulations, and model PPA

Access to grid

Feed-in tariffs

EPPO 12

Feed-in tariffs

Wealthy countries pay Feed-in tariff incremental costs?

• Thai Government loans funds at 0% interest to commercial banks for investment in:

• Energy efficiency improvement projects• Renewable energy development and utilization projects

January 2003 – present

7000 M Baht

11 local financial institutions have participated.

Max loan amount: 50 MBMax. interest rate: 4% Max. loan period: 7 years

Revolving Fund

Low cost financing

15

A source of venture capital for ESCOs to jointly invest with private operators in energy efficiency & renewable energy projects. The program targets SMEs & small projects.

Investor

Technical Assistance

ESCO Venture Capital Equipment Leasing

Carbon Market

Equity Investment

Credit Guarantee Facility

Fund Manager

Investor

InvestorInvestor

ESCO FundInvestment Committee

Energy Conservation Promotion FundEnergy Conservation Promotion Fund

ESCO FundLow cost financing

16

Thailand’s Board of Investment (BOI)’s tax incentives for renewable energy projects:

• Corporate income tax holidays up to 8 yrs. Additional 50% reductions of corporate income tax for 5 yrs

• Import duty reductions or exemptions on equipment and raw materials

Tax IncentivesTax

incentives

Biogas from Pig Farms

Reduces air and water pollution

Produces fertilizer

Produces electricity

8 x 70 kW generator

Ratchaburi

Biogas from Pig Farms

• Uses waste water from cassava to make methane

• Produces gas for all factory heat (30 MW thermal) + 3 MW of electricity

• 3 x 1 MW gas generators

Korat Waste to Energy – biogas… an early Thai VSPP project

VSPP project pipeline as recorded in EPPO data

Application under

consideration

Permission received,

awaiting PPAPPA signed

Generating & selling electricity

Leakage (Project abandoned)

Feb 2007

Thailand VSPP Status

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

18 MW online

June 2008

Thailand VSPP Status

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

June 2009

Thailand VSPP Status

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

Mar 2010

Thailand VSPP Status

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

Sep 2011

Thailand VSPP Status

Application pendingReceived permission, awaiting PPA

PPA signedGenerating electricity

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Mi-cro-

hydro

Natural gas co-

gen

Coal cogen

Biogas

Garbage

Wind

Solar

Biomass

Mar 2012

Thailand VSPP Status

1222 MW online (68-fold increase since 2007)

PPAs signed for additional 3820 MW

MW Solar in VSPP program installed in Thailand

Feb-07

Apr-07

Jun-07

Aug-07

Oct-07

Dec-07

Feb-08

Apr-08

Jun-08

Aug-08

Oct-08

Dec-08

Feb-09

Apr-09

Jun-09

Aug-09

Oct-09

Dec-09

Feb-10

Apr-10

Jun-10

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

Dec-11

Feb-12

Apr-12

Jun-12

Aug-12

Oct-12

Dec-12

0

50

100

150

200

250

300

PPAs for PV: 683 MWPPAs for CST: 1129 MW

Import(35%)

EGAT(47%)

IPPs(38%)

Generation(% installed capacity)

Transmission

Distribution

EGAT (100%)

PEA(66%)

MEA(32%)

Direct Customers(2%)

Users Users

VSPPs(3%)

SPPs(7%)

SPPs and VSPPs still a tiny part of Thailand’s electrical energy

Problems• “Managing committee” set up after solar “gold rush” to be

additional gate keeper. Non-transparent, not clear why some projects proceed and others are denied.

• Biomass: many projects unprofitable because high cost of biomass.

• Communities protesting some biomass power plants.– Now no EIS required if <10 MW Many 9.9 MW plants. – EIS should be required for smaller plants too if pollution is a concern.

• Mainly huge projects (e.g. solar farms, not rooftop PV), which may have more concentrated impacts. Redesign feed-in tariff to incentivize small projects.

Evolution of Tanzania SPP regulations

• Approved by regulator August 2009• Up to 10 MW export, renewables &

cogeneration• SPP Tariffs at average of LRMC and SRMC

– Grid-connected SPP tariff (2012): $0.096/kWh– In rural mini-grid areas offsetting diesel (2012):

$0.243/kWh• 4 SPPs in operation, 12+ in pipeline by

December 2012www.ewura.go.tz/sppselectricity.html for English versions of regulations, and model PPAs

TPC, Moshi 17.5 MW – selling 4 MW to main grid

CogenerationSugarcane bagasse

32

Mwenga 4 MW hydroelectricity to 1000 households in 15 villages & sells to the grid

Summary

• Access to grid• Feed-in tariffs• Low cost financing• Tax incentives

Thank you

For more information, please contact chris@palangthai.org

This presentation available at:www.palangthai.org/docs

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