Solar and biowaste to drive Thailand's renewables sector

Its share of non-hydro renewables could grow to 22% in 2029 from 12.6% in 2019.

Thailand’s renewables sector is expected to take a huge leap forward, with non-hydro renewables capacity projected to expand to 22% of the total power generation mix (15.5GW) by 2029 from the estimated 12.6% in 2019, according to calculations by Fitch Solutions.

The upsurge of renewables comes at the heels of coal-fired power growth’s stagnation due to popular opposition, which will provide ample opportunities for renewables as the Thailand government seeks to deliver increased power sector investment to meet electricity demand in the country.

The solar and biowaste sectors are projected to boost the installation of renewables due to strong government support for renewables. The regulatory environment, which has already driven rapid growth in the sector over the past few years, includes attractive feed-in-tariffs, tax incentives, bidding programmes, and improved financing access.

Spotlight on solar
Thailand’s latest Power Development Plan (PDP 2018-2037) aims to source 35% of their energy mix from non-fossil sources by 2037. Under the new PDP, solar power generation is also set to open up license granting for a total of 10GW from the Energy Regulatory Commission (ERC) over the next two decades.

“Given that Thailand’s energy policy is written into their constitution, it also ensures policy continuity regardless of the political environment in the country,” Fitch Solutions said.

Most recently, the government has also proposed a ‘Energy for All’ scheme, which aims to develop community-owned power generation projects using largely waste-to-energy and solar resources, particularly in more remote areas. The scheme will encourage local communities to sell crop waste to be used for biomass and biogas, as additional income.

“The government is finalising details of this plan at present, and is expected to launch the scheme this year. We believe these ongoing government efforts will continue to drive renewables expansion and support our growth,” Fitch Solutions said.

The firm also noted that the steady build-up of local solar manufacturing capacity over the last few years will enable access to cheaper solar equipment, and ensure that local panels are readily available for developers without the need for shipping.

“In particular, Chinese solar manufacturers have increasingly targeted the market, as they look to offset the overcapacity in their domestic market and seek out alternative growth opportunities, as well as to diversify their production bases. Several Chinese solar manufacturers already have a strong market presence in Thailand, such as Trina Solar, Zhongli Talesun Solar, Symbior Solar, and Yingli Solar,” Fitch Solutions added.

Grid decentralisation
Ongoing efforts to decentralise and digitalise the grid could also improve the integration and uptake of intermittent renewable sources, supporting growth of the sector. The Smart Grid Master Plan was reaffirmed in the PDP 2018-2037, setting out a list of research studies and strategies that will operate along three core pillars: namely power load response and management, electricity forecasting, and microgrid systems and energy storage systems.

Thailand is also piloting peer-to-peer electricity trading for solar power distribution using blockchain technologies and is working on facilitating the model at present.

PPAs get boost
Commercial power purchase agreements (PPAs) are also increasing in Thailand’s renewable energy sector, in line with broader increasing environmental consciousness across many commercial entities.

A remarkable instance of this was when Tesco Lotus agreed to a solar photovoltaic (PV) PPA with Singapore-headquartered renewables company Cleantech Solar. It covers 19 stores across Thailand, generating around 21.5GWh of electricity.