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Renewables pending unless Thailand implements ‘energy decentralization’

The Ministry of Energy’s Power Development Plan (PDP) claims it will ensure Thailand’s energy security into the future. The national electricity output will apparently surge by 67% to reach 77,221 MW by 2037, with 37% (20,766 MW) coming from renewable energy.

Source: EGAT overview 2018

Kavita Sinha, the South and East Asia regional director of the European Climate Foundation, notes that the development of renewable energy in Thailand must follow a model of power decentralization — the opposite of old-school fossil fuels where the market is oligopolistic or monopolistic.

Thailand has long relied on the Electricity Generating Authority of Thailand (EGAT) for electricity generation. On top of electricity production, EGAT has relied on purchasing energy from private sectors including independent power producers, small power producers, and imports from neighboring country like Laos.

According to the PDP, Thailand will continue to depend mainly on EGAT for energy generation until 2037. Yet a close look at the master plan makes it obvious that advancing the renewable energy industry will rely on licensing private companies. Effective power purchasing agreement regulations are key.

Source: EGAT overview 2018

Kavita suggests that less complicated legislation is needed for the renewable energy market to progress. Lowering regulatory barriers means more players can compete in the energy market.

And when supply is high, the cost of production and energy prices will be cheaper.

"No matter what you do, it's the power of technology, the power of finances and the power of competition. Not monopoly!" said Kavita.

Unless the government implements regulations that allow private companies to enjoy concessions when trading energy, high entry costs will prohibit them from entering the Thai energy market. Neighboring countries like Malaysia have long published bills clarifying power purchasing agreement regulations, making them more appealing in the eyes of investors.

Titiporn Sangpetch, who oversees energy system development planning at EGAT, has expressed the body is willing to cooperate with the private sector in developing the energy industry, especially when it comes to solar panels.

"We are a free country. We can't stop people from putting solar panels on their rooftops," says Titiporn. Even so, the PDP’s continued emphasis on EGAT emphasizes continuing a centralized policy rather than renewable energy decentralization.