Policy & Market


Thailand may double solar target to 1GW as investors queue up

Thailand could double its solar generation targets to 1GW by 2022 following strong investor interest in the sector, say energy ministry officials who will propose the move to the country's new government.

Thailand aims to meet 20% of its total energy consumption from renewable resources by that date, and has set a target to generate 500MW of solar power.

In late 2007 it launched generous solar feed-in tariffs designed to help meet the goal, prompting a surge in interest that means the target is already oversubscribed.

“We have already received applications to build 3,358MW of solar projects,” says Twarath Sutabutr, deputy director-general at the Department of Alternative Energy Development and Efficiency (DEDE), part of Thailand’s Ministry of Energy.

More than 2GW of these applications have already signed power purchase agreements, he adds.

DEDE will submit a proposal to raise the 2022 solar target to the new energy minister appointed after this weekend’s national elections.

Increasing the target would depend on several factors, Kurujit Nakornthap, deputy permanent secretary at the Ministry of Energy tells Recharge.

These include the final tariff level and the need to take account of other renewable energy resources such as biogas, biomass and wind energy.

Thailand initially offered solar power producers an ‘adder tariff’ of 8 baht per kWh ($0.26/kWh), but reduced the rate to 6.5 baht to dampen soaring interest in the sector.

Last year it temporarily suspended the tariff, which is paid on top of standard electricity purchase prices.

Nakornthap says it is unclear if the incoming government will back higher targets, but it is unlikely to renege on the current plan.

“The Renewable Energy Development Plan is a 15-year plan and I think the Thai government, whoever the new government is, will always recognise the importance of renewable energy,” Nakornthap says.

Out of the 2GW of solar projects waiting for grid connection, around 700MW is based on PV while the rest relies on solar thermal technology.

Some people have questioned whether solar thermal projects can be operated efficiently in Thailand, admits Sutabutr.

“Solar radiation in Thailand is totally different to that of Spain or California. It’s a risk and it may be that financial institutions don’t want to lend to these projects.”

Sutabutr adds that Thailand’s grid is sufficient to absorb the proposed total of 5GW of renewable energy to be added to meet the 2022 goal.

However, if this target is substantially increased then additional investment in smart-grid technology may be required.