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Thailand developing 4 300MW of renewable generation

Solar energy project
in Thailand
Bangkok, Thailand — ESI-AFRICA.COM — 09 December 2010 – Since the introduction of its small power programme in 2006, Thailand has signed contracts to develop 4 300MW of renewable generation, and nearly half of the contracts “’ for 1800 MW “’ are for solar energy alone.

Revealing this here, former consultant to the Thai government Chris Greacen said currently 850 MW of generation was online as a result of the programme. The large majority of that, 700 MW, was from biomass. Only 16 MW of solar was in operation, but the number of projects was growing rapidly, according to Greacen.

Thailand’s Very Small Power Producer (VSPP) programme uses 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.

As in successful programmes elsewhere, the Thai feed-in tariffs are differentiated by technology. However, the Thai feed-in tariff programme contains several unique features. There is a specific "adder" or bonus for offsetting diesel-fired generation. There is also a location adder or risk premium for projects in three southern provinces and an adder to compensate for fossil-fuel price volatility.

Thailand joins several other Asian countries, such as China, Malaysia, and the Philippines, that have moved to feed-in tariffs or are in the process of doing so.

Contracts to date are dominated by proposed biomass and solar thermal electric projects. There are 1 400 MW of solar thermal electric projects under contract, and 2 100 MW of biomass projects..

To increase project diversity, Thailand is providing government-backed loans at 4% interest up to $1.6 million (R11 million) per project. Similar to Germany’s KfW (the German Bank for Reconstruction and Finance), the government has loaned US$132.5 million (R914 million) to 13 banks at 0.5% interest for use in the programme.