Chris Greacen Chiang Mai, Thailand 24 January 2013 Grid-connected renewable energy in Thailand under the VSPP and SPP programs MEENet workshop, session 2 Palang Thai

Access to grid Feed-in tariffs Low cost financing Tax incentives Thailand’s SPP+VSPP

$ Access to grid

Technical regulations: Allowable voltage, frequency, THD variations Protective relays Communication channels Commercial regulations: Definitions of renewable energy, and efficient cogeneration Cost allocation Standardized tariff determination Invoicing and payment arrangements Arbitration $ + Standardized Power Purchase Agreement (PPA) Access to grid

Small Power Producer (SPP) regulations: Started 1992 Fossil-fuel cogeneration and renewable energy up to 90 MW (export to grid) Low tariff offered for “non-firm” generators made it difficult for most renewables. Access to grid

Bangkok Cogen, Rayong, 115 MW Map Ta Phut Olefins, Rayong, 70 MW Pluak Daeng, Rayong 70 MW Laem Chabang, Chonburi 100 MW 4494 MW online MW with signed PPAs... 75% fossil fuel

Lopburi solar PV – 73 MW (over 1,000 rai = 160 hectares) Signed PPAs for 767 MW of PV (SPP + VSPP)

Evolution of Thai VSPP regulations 2002 – VSPP regulations drafted, approved by Cabinet – Up to 1 MW export, renewables only – Tariffs set at utility’s avoided cost 2006 – Up to 10 MW export, renewables + cogeneration – Feed-in tariff “adder” 2009 – Tariff adder increase, more for projects that offset diesel for English version of regulations, and model PPA Access to grid Feed-in tariffs

EPPO12 Feed-in tariffs

Wealthy countries pay Feed-in tariff incremental costs?

Thai Government loans funds at 0% interest to commercial banks for investment in: Energy efficiency improvement projects Renewable energy development and utilization projects January 2003 – present 7000 M Baht 11 local financial institutions have participated. Max loan amount: 50 MB Max. interest rate: 4% Max. loan period: 7 years Revolving Fund Low cost financing

15 A source of venture capital for ESCOs to jointly invest with private operators in energy efficiency & renewable energy projects. The program targets SMEs & small projects. Investor Technical Assistance ESCO Venture CapitalEquipment Leasing Carbon Market Equity Investment Credit Guarantee Facility Fund Manager Investor ESCO Fund Investment Committee Energy Conservation Promotion Fund ESCO Fund Low cost financing

16 Thailand’s Board of Investment (BOI)’s tax incentives for renewable energy projects: Corporate income tax holidays up to 8 yrs. Additional 50% reductions of corporate income tax for 5 yrs Import duty reductions or exemptions on equipment and raw materials Tax Incentives Tax incentives

Biogas from Pig Farms Reduces air and water pollution Produces fertilizer Produces electricity 8 x 70 kW generator Ratchaburi

Biogas from Pig Farms

Uses waste water from cassava to make methane Produces gas for all factory heat (30 MW thermal) + 3 MW of electricity 3 x 1 MW gas generators Korat Waste to Energy – biogas … an early Thai VSPP project

VSPP project pipeline as recorded in EPPO data Application under consideration Permission received, awaiting PPA PPA signed Generating & selling electricity Leakage (Project abandoned)

Feb 2007 Thailand VSPP Status 18 MW online

June 2008 Thailand VSPP Status

June 2009 Thailand VSPP Status

Mar 2010 Thailand VSPP Status

Sep 2011 Thailand VSPP Status

Mar 2012 Thailand VSPP Status 1222 MW online (68-fold increase since 2007) PPAs signed for additional 3820 MW

MW Solar in VSPP program installed in Thailand

Import (35%)‏ EGAT (47%)‏ IPPs (38%)‏ Generation (% installed capacity)‏ Transmission Distribution EGAT (100%) PEA (66%)‏ MEA (32%)‏ Direct Customers (2%)‏ Users VSPPs (3%)‏ SPPs (7%)‏ SPPs and VSPPs still a tiny part of Thailand’s electrical energy

Problems “Managing committee” set up after solar “gold rush” to be additional gate keeper. Non-transparent, not clear why some projects proceed and others are denied. Biomass: many projects unprofitable because high cost of biomass. Communities protesting some biomass power plants. – Now no EIS required if <10 MW  Many 9.9 MW plants. – EIS should be required for smaller plants too if pollution is a concern. Mainly huge projects (e.g. solar farms, not rooftop PV), which may have more concentrated impacts. Redesign feed-in tariff to incentivize small projects.

Evolution of Tanzania SPP regulations Approved by regulator August 2009 Up to 10 MW export, renewables & cogeneration SPP Tariffs at average of LRMC and SRMC – Grid-connected SPP tariff (2012): $0.096/kWh – In rural mini-grid areas offsetting diesel (2012): $0.243/kWh 4 SPPs in operation, 12+ in pipeline by December for English versions of regulations, and model PPAs

TPC, Moshi 17.5 MW – selling 4 MW to main grid Cogeneration Sugarcane bagasse 32

Mwenga 4 MW hydro electricity to 1000 households in 15 villages & sells to the grid

Summary Access to grid Feed-in tariffs Low cost financing Tax incentives

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