Green Energy for Great Business

Thailand is heavily dependent on imported energy sources (notably oil, gas, and electricity). To reduce this dependency and lower Thailand’s emission of greenhouse gases, the national energy policy has the underlying objective of an “Energy Sufficiency Society” and “Green Growth”. Alternative energy sources (solar, wind, biomass, biogas, and mini-hydropower) now account for only 12% of overall energy use in Thailand but  the government is planning  to raise this to 25% by 2021. The main policy and regulatory framework for reaching this target is the Alternative Energy Development Plan (AEDP). The projected quadrupling of installed alternative energy capacity by 2021 is expected to come from dramatic advances in solar and wind power, a doubling of biomass energy, and a multifold increase in mini-hydropower.

Thailand has excellent solar power potential, and the government’s target of nearly 2,000 megawatts (MW) of solar PV installations by 2021, accounts for 20% of Thailand’s installed renewable energy and appears to be achievable. Solar power is being supported by a well-structured institutional framework and financial and fiscal incentives. For off-grid applications, solar PV is increasingly competitive.

Thailand’s wind resources, on the other hand are relatively modest, although there has been significant development of wind power projects. Wind parks have tended to be small scale until the recent commissioning of several larger grid-connected wind projects, drawing on the favorable adder tariff system and other incentives. Thailand’s well-established grid and robust load systems are also critical factors in facilitating the expansion of wind power.

The Thai government is strongly encouraging increased production and use of biofuels. Domestic biodiesel production is expected to reach 2,628 million liters by 2021, and bioethanol production, 3,275,000 million liters—increasing current production many times over. The extensive land requirements, more than double the area now under cultivation for biofuel feedstocks but raises concern about food security and the implications for farm communities.

The government has strengthened its promotion of biogas energy, offering subsidies of up to 33% of the total investment in biodigester installations and favorable adder rates to biogas producers who sell electricity to the national grid. Pig farms are becoming large-scale, providing ready supplies of manure, more than 50% of which is now used in biodigesters. For small farms, however, the problem of collecting sufficient manure as feedstock, together with the up-front investment cost, continues to discourage the adoption of the technology. Firewood and agricultural residues are still the primary energy sources in much of rural Thailand.

Source: Renewable Energy Developments and Potential in the Greater Mekong Subregion by ADB

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