Buyers' Toolkit

In 2021, renewable energy accounted for 10% of Thailand's total electricity generation. Although Thailand has long been open to free competition in the private power generation sector, the transmission and distribution of electricity are still managed by state-owned enterprises.

Power plants in Thailand are required to sell electricity generated to the Electricity Generating Authority of Thailand (EGAT), which then distributes it to the two major distribution agencies, Provincial Electricity Authority (PEA) and Metropolitan Electricity Authority (MEA), as well as supplies directly to a small number of eligible customers.

In the second half of 2022, Thailand introduced a new feed-in tariff (FIT) scheme that targeted ground-mounted solar plants while excluding rooftop projects. To acquire renewable energy in Thailand, there are two methods: purchasing unbundled Renewable Energy Certificates (RECs) and entering into Power Purchase Agreements (PPAs).

Currently, I-RECs, in partnership with the EGAT, are the prevalent type of certificates in Thailand due to the lack of national RECs. In terms of PPAs, only on-site rooftop installations of plants are applicable, while the sale of electricity is not allowed. On the other hand, Thailand has recently launched a pilot project for grid-connected unbundled renewable energy trading.

The EGAT is facing challenges in financing rating due to numerous long-term power contracts signed, which has left more than half of power generation facilities still in the financing phase. In addition, according to Thailand's Alternative Energy Development Plan 2018-2037 (AEDP 2018-2037), it is expected that 30% of electricity consumption will come from renewable sources by 2037. Therefore, a grid upgrade and improvement of grid computing will be necessary as well as a challenge for Thailand to achieve an energy transition.

As Thailand's FIT rates have failed to stimulate renewable energy installations in recent years, the development of complementary policies to attract investment will be a key focus going forward. Additionally, the ongoing electricity pilot project will allow for more diverse renewable energy procurement options and align Thailand with the global trend toward bundled RECs.