Wind energy in Thailand
Update: The Thai National Committee for Peace and Order imposed the martial law provision S44IC to release 3,600 rai farmland managed by the Agricultural Land Reform Office (so-called ALRO land) so be utilized for wind farms by repealing current land use legislations (Source: The Nation, 21.06.17)
Thailand is listening to the low wind of change
Wind is caused by the uneven heating of the atmosphere by the sun. Therefore, wind power is a derivative form of solar energy. Wind turbines convert the kinetic energy in the wind into mechanical power. A generator can convert mechanical power into electricity.
In Thailand, the Ministry of Energy’s Department of Alternative Energy Development and Efficiency (DEDE), promotes and supports this type of renewable energy by 70 wind measurement stations, studies on the potential of wind power since 1975 and the wind power potential map as of 2001, which had been updated in 2009. It shows that potential wind power sources are located in the Gulf of Thailand (from Nakornsritammarat, Songkla, to Pattany) as well as some areas in Petchburi and Doi Intanon.
Generally, due to its proximity to the equator, the land of smile has more sun than wind. Wind power can be economically utilized mostly at a particular topography as mountain ranges, canyons, and slopes. As examined in a study of the World Bank, only 0.2 percent of Thailand’s land mass benefits from “good to excellent” winds appropriate for large-scale wind power farms. Therefore, it makes sense to think small and to have low wind-speed technology in place.
Wind farms and Sor Por Kor land
In the past, wind farms had mostly been erected on the so-called Sor Por Kor land, although the activity of a wind farm does not qualify as farming as outlined by such land scheme, defined as “businesses which economically and socially serve or relate to the livelihoods of farmers in the land reform areas.” Therefore, renting Sor Por Kor land to build a wind farm is an illegal misuse of the land, which is solely designated for farming purposes under the agricultural land reform scheme. Sor Por Kor land is administrated by the governmental Agricultural Land Reform Office and, therefore, usually called ALRO-Land.
On January 31, 2017, this legal viewpoint has been confirmed by the Thailand Supreme Court. The decision has been made for a wind farm in Chaiyaphum province The court ruled that the land reform committee’s decision to lease the land to the company was illegal. As a consequence, the court ordered the revocation of the resolution and the revocation of the registered long-term lease contract, although state agencies already signed power purchase agreements (PPA) and the total construction costs amount THB 9 billion.
The court decision leaves the destiny of the various other wrong-placed wind farms open. 19 out of 22 wind farms covering almost 700 rai are scattered on Sor Por Kor land in the two “windy” northeastern provinces of Nakhon Ratchasima (7 companies / 281 rai) and Chaiyaphum (12 / 345). ALRO announced already on February 2, 2017, that officials are looking into details of each and every contract for Sor Por Kor land leased to companies that build wind farms to generate electricity in Chaiyaphum and Nakhon Ratchasima province. All land lease contracts for wind farm projects will be revised to comply with the court’s ruling.
ALRO announced on March 29, 2017, that the court decision will not be applied to any other wind farm venture. If you can’t deny it, just ignore it. Whether this bold statement marks the end of the Sor Por Kor affair, the future will tell. Future investors in wind farms located on SPK land have to evaluate the risks involved, especially in the light of the election scheduled for 2019.
One of the key items when negotiating wind farm ventures is whether the property can be used concurrently for ranching or farming. Another concern is the impact the proposed energy project will have on the usability of the land in the future. PUGNATORIUS Ltd. advises investors to ensure that long-term financial and property interests are protected. The law firm also assists wind energy developers during contract negotiation and drafting, and with building, zoning, and other land use issues.
Professional services offer
Wind 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.”