The Department of Mineral Fuels reported last year the country has 8.5 trillion cubic feet of proven reserves, or seven years of power production at 2015 rates. a year. It is scheduled to be ready for operation by 2022, said Energy Minister Anantaporn Kanjanarat.
Thailand’s Power Development Plan (PDP) for 2015-2036 projects the country importing 22 million tonnes of LNG a year, up from 3 million now. PTT was also approved recently to increase its LNG imports to 5 million tonnes per year, signing 15-20 year contracts.
The country is the second-largest net oil importer in Southeast Asia behind Singapore. Thailand has proven oil reserves of 3.86 billion barrels. Most of the Thailand’s natural gas fields are offshore in the Gulf of Thailand, and it imports a hefty chunk from Myanmar.
PTT’s upstream subsidiary PTT Exploration and Production has a stake in many of Thailand’s operational natural gas fields, including Bongkot, the country’s largest. But foreign companies supply the bulk of the country’s natural gas output, with Chevron accounting for 70% from 22 offshore fields.
Some 70% of Thailand’s energy comes from natural gas, followed by 10% from lignite, 5% from imported coal, 4.5% from Laos hydropower, and 4% from local hydropower.
The government has set extremely ambitious goals for increasing renewable energy usage with a target of 25% of total consumption by 2021, up from 10% now. Biomass is expected to provide over 60% of this energy, reflecting Thailand’s dependence on the agricultural sector and its access to large amounts of agricultural waste.
Energy analysts believe Thailand has the biomass sources to generate between 4,000 megawatts and 7,000 MW per year. But folks in the biomass industry remain frustrated by a lack of government support, citing community resistance to biomass plants because of a lack of public participation.
Natee Sithiprasasana, the Federation of Thai Industries vicepresident, told the Bangkok Post the country lacks mechanisms that bring business leaders and communities to the table to discuss and exchange information before investors buy land and seek government concessions. Locals refuse to accept biomass power plants in their communities without environmental impact assessments, even from small projects of less than 10 MW, he said.
This lack of interaction leads developers to keep their projects secret for fear of community protests or
speculators driving up land prices. The government needs to facilitate exchanges between communities and developers if it wants the latter to help build the country’s energy capacity, said Mr Natee.
Though Thailand has vast biomass source material, pioneers in the industry have complained that supply of that material is wildly inconsistent and the price also varies considerably, holding back development of the sector.
In addition to setting up an LNG importing business, the Electricity Generating Authority of Thailand (Egat) aims to develop another 2,000 MW of renewable energy capacity by 2026, up from its current total of 2,948 MW that is mostly from hydropower plants.
Thailand is one of the world’s top 10 players in Clean Development Mechanism (CDM) with 64 registered projects with the UN Framework Convention on Climate Change. The Thailand Greenhouse Gas Management Association has approved 155 CDM projects with a combined capacity to lower carbon dioxide emissions by 9.47 million tonnes a year. Biogas projects dominate the registrations with a 60% share while biomass makes up 23%. CDM is the mechanism that allows industrialised nations to buy carbon credits from projects in developing countries to meet their emission reduction commitments under the Kyoto Protocol by 2012.
The government supports the development of renewable and nonconventional electricity production through its Small Power Producer (SPP) programme. SPPs can sell electricity to Egat for distribution or directly to consumers near their plants provided it is generated using hydro, biomass, or thermal co-generation. The buyback rate is based on the cost to Egat. For example, the Energy Ministry promised to buy back wind power from SPPs for 3.5 baht per unit for 10 years. The tariff has since risen to 6.06 baht per unit.
Since the introduction of its SPP programme in 2006, Thailand has signed contracts to develop 6,300 MW of renewable generation. Some 1,800 MW are for solar energy but only 1,300 MW is online, while 2,452 MW is from biomass. The Energy Ministry’s Alternative Energy Development Plan calls for 3,000 MW of wind energy by 2036, but Thailand currently has only 224 MW of installed capacity (see Table 1). The programme used the bonus model of feed-in tariff design where the final tariff paid is composed of several adders on top of the avoided wholesale cost of generation. In 2016 the scheme changed to a feed-in tariff plus a premium for biomass, biogas and solar power projects of 10 MW and below.
The tariff programme contained a specific adder or bonus for offsetting diesel-fired generation. There was also a location adder or risk premium for projects in the Deep South and an adder to compensate for fossil-fuel price volatility. To increase project diversity, Thailand provided government-backed loans at 4% interest up to THB 50 million per project.
In the future, levelised electricity costs are projected to be in the range of LNG.
As attempts to initiate nuclear and coal plants domestically face vociferous opposition, Thailand appears wedded to natural gas imports. The country wants to increase its natural gas contracts in Myanmar from 5,500 MW, especially with the massive planned deep-sea port in Dawei receiving substantial Thai investment. And Egat expects 1,220 MW of its 7,000 MW supply contracted from Laos hydropower to come from the controversial Xayaburi dam slated for commercial operation by 2019.
The Energy Ministry recently delayed plans for five nuclear plants by three years to 2023, and postponed plans for nine coal-fired plants to 2019.
Egat wants to expand the capacity of its Mae Moh coal-fired complex in Lampang, up to 2,400 MW from 600 MW now. The company plans to switch to a clean coal IGCC system with instruction from Japan.
Thaioil, a refinery in which PTT owns 51%, plans to spend USD 300 million to build two co-generation power plants that were recently granted licences from Egat.
Opponents of nuclear power and coal have questioned the PDP’s forecasts calling for Thai electricity demand to average growth of close to 2000 MW per year through 2021. Electricity demand over the last decade has increased 4.9% per year, plateauing the last few years, according to the Energy Policy and Planning Office. Load growth appears to be slowing and the government’s Energy Efficiency Programme aims to reduce energy usage by 30% (from 2010 levels) by 2036.
Egat claims renewable energies need to be more reliable and less costly to make up more of the country’s power portfolio, as solar panels have to be imported and the capital required for renewable projects is massive. Government incentives will enable renewable energy to increase, but the sector makes up such a small portion of the country’s capacity it is likely to be insufficient to meet demand in the near future, said Egat.
In Krabi province, where the government’s plan to locate a coalfired power plant has faced poisonous opposition, a local group called the Public Policy Foundation released a Green PDP that showed renewables, mainly biomass and biogas, could generate enough capacity after three years of operation to power the entire province. The renewables could provide 287 MW, roughly double the peak energy demand of the province in 2015.
But the government has stopped buying energy from biomass producers because it says the power lines are full, charged the Krabi Provincial Administration Organisation. The Provincial Electricity Authority must install more power lines to encourage the renewable industry, said the organisation.
Safe Energy Group, the biomass power plant operator, is spending THB 1.2 billion to expand production in the Deep South where it operates 40 MW. The group plans to bid for 36 more MW of biomass power plants in the region, which are bid out by the Energy Regulatory Commission this year. State agencies are expected to call bids for a combined 400 MW of biomass and biogas power plants this year.