The comeback of the sun: The Thai Agricultural Cooperatives Program 2015-2017

The Thai Agro-Solar project gave interesting insights into government acting and the reliability of a public tender procedure.  


The Governmental Agency and Agricultural Cooperatives Program (Agro-Solar) for (initially) 600 + 200 MW had no easy start. The ERC Energy Regulatory Commission of Thailand finished a public tender process to grant licenses to private developers to develop and operate solar farms on land owned by the government and agricultural cooperatives. Cooperatives are mainly agricultural cooperatives, fisheries cooperatives, and land settlement cooperatives. These cooperatives must be the project owner, but neither electricity producers nor sellers. Legitimate right of land ownership covers the land of the cooperatives and land that the cooperatives rent from the members. Subsequently, private companies (“project supporters”) construct and install the solar power system, produce and sell electricity.

The combined capacity of 600 MW for a feed-in-tariff of THB 5.66 per KWH for 25 years had been originally divided as follows:

  1. 200 MW under a PPA with MEA (Bangkok region). Applications for just 180 MW have been received. Now just 6 farm cooperatives are announced as winners in this category.
  2. 389 MW under a PPA with PEA (138 MW Central region, 5 MW Northern region, 87MW East, 159 MW West). 200 MW for Southeast and South planned for 2018. Applications received for 2,709 MW.
  3. 11 MW under a PPA with Royal Navy (Sattaheap Sattahip Electricity). Applications received for 16 MW.

Investors had the chance to bid for one or more solar farm projects with a combined power capacity of maximal 50 MW. However, not all applications met the (i) general requirements for bid security, evidence of financial support (e.g. registered capital of THB 2 million per MW, 25 % paid up) and technical know-how, rights to land, etc. and (ii) special requirements re. governmental agencies and agricultural co-ops.

After the tender had been published and bids had been prepared by governmental agencies, the ERC became aware that these bids are not in compliance with the new public-private-partnership legislation in Thailand. Therefore, all and every bid of governmental agencies had to be rejected as illegal.

The timeline was as follows:

  • On November 10, 2015, the application period for the 600 MW tender had ended. According to our sources, the solar power capacity offered had been oversubscribed less than 5-fold with 618 applications for combined 2,906 MW.
  • Deadline for delivering of supporting documents had been November 20, 2015.
  • For December 11, 2015, the government promised [!] to disqualify applications which do not meet their requirements, above other with respect to details regarding plant location, funding source, technology, compliance with zoning regulations, etc.
  • Qualified applicants should participate in a lucky draw on December 15, 2015, however, this has been delayed due to the PPP considerations mentioned above till April 21, 2016.
  • The official announcements of winning projects by ERC had not been published on December 24, 2015, as scheduled, but on April 26, 2016.
  • PPAs will be signed within 120 days after the announcement.
  • COD commercial operation date (selling power to the grid) should be no later than December 2016.

Among the winners of the so-called lucky draw with a total investment volume of THB 18 billion are mostly listed companies as Bangchak Petroleum, Global Power Synergy, Superblock,  and Solartron.

There is a three-year shareholding lock-up period for the (i) transfer of rights and obligations in the PPAs and to (ii) transfer of ownership in the winning bidder.

Nam keun hai reep dtak.” (Make hay while the sun shines.) More about solar energy in Thailand at pugnatorius.com/category/solar


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