The comeback of the sun: The evolution of Thailand’s FIT policy
After the rough years of Thailand first “solar gold rush” the government shut the doors for new solar projects. Starting June 28, 2010, new applications for solar projects had not been accepted (the so-called Solar Power Moratorium) and the Adder for new solar projects had been cancelled and replaced by a Feed-in-Tariff. The reason for this was that applications for over 4,000 MW of proposed projects had been submitted by October 2010, although a year later only 16 MW had been completed.
In 2013, Thailand’s National Energy Policy Commission (NEPC) approved updated feed-in tariffs for both rooftop and ground-mounted solar photovoltaic panels with contract terms of 25 years. There are three size tranches for in total 200 MW rooftop solar photovoltaic panels (6.96 THB/kWh for 0-10 kW, 6.55 for 10-250 kW, 6.16 for 250-1,000 kW). An amount of 800 MW had been reserved for community-owned projects (9.75 THB for years 1-3, 6.4 for 4-10, 4.5 for 11-25) and had to be installed by the end of 2014. It is not unfair to state that the outcome of these programs fall below the expectation for various reasons. These incentive schemes for renewable power generation already phased out end of 2014.
In the past, Thailand’s Adder rates had been differentiated by technology,
installed capacity, and geography. Higher Adders had been paid in the three southernmost provinces which have experienced political unrest; and in off-grid areas where the PEA generates electricity from diesel power plants. These tariffs based on the previous high costs for engineering, procurement and construction (EPC) of solar energy projects, which came typically with a price tag in the range of US$ 2 million per MW. In the meantime these costs could been dramatically reduced – roughly cut in half with solar panel prices dropped by 90% through the last four years.
The National Energy Policy Council (NECP), chaired by PM General Prayuth, developed the new Thailand Power Development Plan (PDP) for the years 2015 till 2036. The new rules and policies distinguish by technology type, installed respectively contracted capacity, and project location. The PDP includes the Energy Efficiency Development Plan (EEDP) and the Alternative Energy Development Plan (AEDP) and provides a comprehensive energy master planning for Thailand.
- The new FiT is provided for 25 years at an amount of THB 5.66/kWh (solar farm 90 MW), 6.01 (Solar rooftop 250 – 1,000 KW), 6.40 (Solar rooftop 10 – 250 KW), 6.96 (Solar rooftop 10 KW. The Adder of 6.5 – 8 for a period of ten years is no longer available. The projected IRR drops from the adder based 25.2% to now 12.2%.
The bidding on solar energy and other renewable energy projects is guided by the Terms of Reference (TOR) which differ from the previous regulations which were on a “first come, first served” basis and had not been properly designed to prevent speculators from bidding for licenses and reselling them at a profit, leaving the country’s old energy plan unrealized. The new bidding regulations include terms and conditions regarding reliability of the bidder, possible transmission lines and sufficient feedstocks.
Electricity bills currently have a base tariff of 3.27 baht a kilowatt-hour since 2011. The calculation is based on capital expenditure by EGAT, MEA and PEA as well as their financial performance. A new base of the tariff rate serves as a reference basis from this year to 2018.
“Nam keun hai reep dtak.” (Make hay while the sun shines.) This post has been published at https://www.linkedin.com/pulse/comeback-sun-thailand-ii-projects-dr-ulrich-eder