Biomass facilities in Thailand

Thailand Biomass

Thailand Biomass


Biomass as a source of renewable energy in Thailand

Biomass produces renewable energy from plants. When biomass is burned, the chemical energy in biomass is released as heat. Primary types are wood and wood processing wastes, agricultural crops and waste materials, food, yard, and wood waste in the garbage. Biomass can be burned directly or converted to liquid biofuels or biogas that can be burned as fuels. Other options are biogas and municipal solid waste (MSW) 

Thailand is an agricultural country. A significant amount of agricultural waste is left after harvesting and can be used as biomass energy. Thailand intends to utilize its abundant biomass resources. Typical Thai biomass includes rice husk/rice-chaff, bagasse fiber, cassava, lees of sugarcane, empty fruit bunches (EFB) of palm, and scrapped rubber trees. 

Other than solar and wind power, biomass is renewable but not clean energy. Smoke and ash from the burning biomass and the air pollution associated therewith are adverse side-effects which should be taken into consideration when choosing the location of the site. Besides, roads could be damaged by trucks transporting renewable materials, mainly husks from grain mills and chipped wood, to the biomass power plant. Other environmental concerns include noise and wastewater.

The legal framework for foreign investments in biomass power stations 

Shifting from fossil fuels to renewable energy sources is a global goal. Biomass and biogas are becoming mainstream energy sources in Thailand, with a combined capacity of more than 3 GW.

Currently, Thai biomass power stations – or the co-generation of heat and power – exist in Chiang Rai, Lopburi, Chachoengsao, Ubon Ratchathani, Siriwattana, Surin, Roi Et, Chumphon, Yala, and Trang. 

Most of the biomass-fired industrial facilities are large-scale, centralized plants operating at economies of scale, which require substantial energy flows to be brought from within and across national borders. This requires an efficient logistics infrastructure to ensure the delivery of reliable, high-quality and affordable biomass fuels. 

The development of such supply chains makes it meaningful for a foreign investor to enter into a biomass facility as a joint-venture with a local Thai partner. While wind and solar radiation will be free forever, the costs of future biomass are subject to market conditions and reliability of supply can be much better secured by a Thai partner.

Thailand’s Board of Investment (BOI) promotes the production of electricity or steam from renewable energy, such as biomass by an 8-year tax holiday, exemption of import duty on machinery, raw or essential materials used in manufacturing export products.
Non-tax incentives are, above all, 100% foreign ownership, permission to acquire land ownership and the authorization to bring skilled workers and experts to work in Thailand.

Over the past decade, renewable power has expanded in Thailand in capacity from 100 MW to now almost 10,000MW. The government announced to continue to promote biomass power plants in the Deep South (Yala, Pattani, Narathiwat) with a total capacity of 300MW as it aims to solve power shortages.

Under the Power Development Plan PDP 2018-37, approved in late January by the National Energy Policy Council,  an unexpected limit for the power capacity for biomass and biogas has been set. This PDP is still waiting for the approval by the new Thai cabinet. Under the PDP, Biomass resources have a quota of 3,376 MW only. “There is an abundant agricultural waste, but the plan emphasizes importing costly wind turbines and solar panels, while local resources as biomass and biogas generation offer more benefits to the local economy” is the critical viewpoint of the Thai Biogas Trade Association (TBTA). 

Professional services offer 

Biomass energy and other forms of renewable energy are one of the law firm’s areas of competence, long-standing experience, and unique market reputation. The terms for assigning PUGNATORIUS Ltd. are described at “Legal advice, tax structuring, transaction support services and business matchmaking on Thailand’s renewable energy markets.”

Disclaimer: This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship. Professional services in this industry segment are described <here>.

Comments are now closed for this article.