Debt clogs renewable power operators

Group calls for fairer SPP tariff rate

Over 12 renewable power operators under the small power producer programme (SPP) have suspended their debt repayment because of business losses.

This unfavourable situation has led 31 biomass power operators under the SPP to call for energy policymakers to increase the feed-in tariff, or power rate, purchased by state utilities.

Natee Sithiprasarsana, president of SPP Biomass Group, said the 31 operators have a combined capacity of 681 megawatts.

He said the group can sell power to state utilities at an average rate of 2.65 baht per kilowatt-hour, compared with 4.24 for very small power producers (VSPPs).

The current rate for SPP Biomass shifted to 2.65 baht in 2014, while the VSPP rate has been 4.24 since March 2016.

The SPPs are regulated as firms under power purchase agreements, while VSPPs have non-firm contracts, meaning they do not have to sell power to the Electricity Generating Authority of Thailand.

“We just need a fair rate that is more competitive in this market, helping us gain a profit to repay our debt,” said Mr Natee.

Policymakers have been considering a fair rate since 2015, but there has been no response to SPP operators thus far, he said.

Mr Natee said the suspension of debt repayment for SPPs started in mid-2017, with combined loans exceeding 1 billion baht.

Some operators have suffered huge losses since 2014 because of rising feedstock costs, including wood chips, rice husks and bagasse. Some firms have had their SPP operations confiscated for debt payment.

He said the group has been Thailand’s leading spearhead for renewable power investors since 1998, when the price of rice husk was only 10 satang per kilogramme, but now it is 1.5 baht.

“The country’s renewable energy policy has been unstable over the past decade and policymakers have never talked with SPP operators [before enforcing policies],” said Mr Natee.

Thongchai Mungchareonporn, adviser to biomass operator MC Group, said the group is allocating funds for a rice-mill production unit to complement its two biomass power plants — Mungchareon Biomass and Mungcharoen Green Power.

“Our biomass power plants have suffered huge losses from the unfair rate,” said Mr Thongchai.

Many biomass operators such as National Power Plant Co, Roi-Et Green Co, AT Bio Power Co and Surat Green Energy Co indicated they have suffered from the same problem.