LOWER FIT RATE
Policymakers are planning to revise down the feed-in tariff on renewable power as power generation gets cheaper.
Policymakers are planning to revise down the feed-in tariff (FIT) on renewable power for the upcoming round of quotas to grant licences to private investors, says the Energy Policy and Planning Office (Eppo).
Deputy director-general Prasert Sinsukprasert said renewable power generation and systems to manage feedstock have trimmed down generation costs.
Generation is coming from sun, wind, biomass, biogas, and the industrial and agricultural sectors.
As power-generation costs have gone down, the FIT rate should be modified to reflect the new price, said Mr Prasert. The FIT revision will be finalised by the end of the year and become effective in early 2018.
There will be additional changes to the process. Licence distribution by the Energy Regulatory Commission (ERC) may happen via auctions instead of lucky draws, he said.
“Auctioning renewable power licence swill increase competition in the sector,” said Mr Prasert.
He said an auction of hybrid renewable power licences is scheduled to take place in the second half this year. Each licence will entitle producers to 10-50 megawatts. The auction is slated to license 300MW and is directed primarily at small power producers (SPP).
SPP hybrid power purchase agreements will set the business model for firm power purchase agreements in sectors other than renewable power. The auction will be conducted by ERC, and licences will be allocated among zones, depending on the volumes of renewable feedstock.
Energy analyst Manoon Siriwan said the revision is appropriate because Thailand’s renewable power is moving from subsidies to the competition stage.
Renewable power was introduced to Thai investors in 2007, with policymakers supporting its development through high rates, including an 8.5 baht per kilowatt hour rate on solar power. Over the last decade, renewable power has expanded from pilot or administrative projects with a total capacity of less than 100MW to a total capacity of almost 10,000MW.
Dusit Kruangam, chairman of the Thai Photovoltaic Industry Association, said the FIT for capacities less than 10MW should remain flat to support small businesses owning power generation systems, reducing their operating costs.