Partner Bangkok
"One of the most significant updates in 2024, particularly in energy-intensive sectors like data centres, is the introduction of direct PPAs."
Key 2024 Updates
- Introduction of Direct PPAs
One of the most significant updates in 2024, particularly in energy-intensive sectors like data centres, is the introduction of direct PPAs. These agreements enable private companies to purchase up to 2,000 MW of power directly from renewable energy producers (“Direct PPAs”) via grid connections operated by electricity authorities. This marks a major shift from the Enhanced Single Buyer (ESB) model that required power purchases through electricity authorities and a uniform tariff policy that mandated uniform electricity pricing across similar consumer categories nationwide. Direct PPAs allow foreign investors new entry points into the Thai market, as they are no longer restricted to buying electricity solely through power purchase agreements with electricity authorities. The finalised criteria and conditions for Direct PPAs are expected by the end of 2024.
- Ambitious Renewable Energy Targets
The draft Power Development Plan for 2024-2037 (“PDP 2024”) sets an ambitious goal for renewable energy, aiming for 51% of total electricity generation capacity to come from renewables by 2037, a significant increase from the previous goal of 36%. The country’s focus on solar, wind, and biomass reflects its commitment to reducing its reliance on fossil fuels and advancing toward carbon neutrality.
- Increased Focus on Energy Storage
The draft PDP 2024 also prioritises the role of energy storage systems, which are critical for balancing intermittent renewable sources such as solar and wind. This mirrors global trends and signals Thailand’s intention to integrate more solar-plus-storage systems into its energy mix, enhancing the reliability of its renewable energy capacity.
- New Opportunities in the Renewable PPA FiT Scheme
Whilst the FiT rates remain unchanged, the renewable energy sector will see an expansion of project quotas with 3.67 GW of additional capacity earmarked for procurement under the FiT scheme between 2022-2030. This expansion includes 2,632 MW from solar power, 1,000 MW from wind power, 6.5 MW from biogas and 30 MW from industrial waste. Solar-plus-storage projects are excluded as they have already met their purchasing targets. The Energy Regulatory Commission (“ERC”) retains the authority to adjust these targets annually, based on remaining capacity, in line with the Power Development Plan for 2018-2037, Revision No.1 (PDP2018 Rev.1).
PPAs for these projects will operate on a “non-firm” basis, with contract terms ranging from 20 to 25 years. The quotas for additional electricity will be rolled out in two key stages:
(1) First Additional PPA FiT Stage
Key contacts
"Whilst the FiT rates remain unchanged, the renewable energy sector will see an expansion of project quotas with 3.67 GW of additional capacity earmarked for procurement under the FiT scheme between 2022-2030."
This stage prioritises wind or ground-mounted solar projects that passed the qualifications and technical readiness assessments in the 2022 PPA FiT scheme but were not selected. The total purchasing target capacity for this stage is 2,180 MW, with 600 MW allocated for wind power (first priority) and 1,580 MW for ground-mounted solar power (second priority).
(2) Second Additional PPA FiT Stage
Applicants who did not meet the qualifications or minimum technical readiness criteria or who were not selected under the 2022 PPA FiT scheme or the First Additional PPA FiT Stage are eligible for the second stage. Priority will be given in the following order: (i) biogas; (ii) wind power; (iii) ground-mounted solar power; and (iv) industrial waste. This stage offers developers a renewed chance to participate in Thailand’s expanding renewable energy market.
First Additional PPA FiT Stage Details
Wind or ground-mounted solar projects that were not selected under the 2022 PPA FiT scheme are invited to reapply in this stage. The eligibility requirements for applicants, project selection criteria and FiT rates for this stage are consistent with those from the previous round. For further details, please refer to our earlier article.
Applicants must submit a notice of participation along with a proposal bond of THB 1,000 per kW of offered capacity. The ERC will select projects based on prior readiness assessments and the offered electricity sales.
The table below details the purchasing targets for each type of renewable energy project, aligned with scheduled commercial operation dates (“SCOD”):
| 2026 | 2027 | 2028 | 2029 | 2030 | |
|---|---|---|---|---|---|
| Wind | 200 | 400 | 400 | ||
| Ground-mounted solar | 232 | 200 | 600 | 800 | 800 |
Application Period for the First Additional PPA FiT Stage
The application period for the First Additional PPA FiT Stage is tightly controlled. For Small Power Producers (“SPPs”), applications will be accepted from 9 October 2024 to 7 November 2024. During this window, applicants must submit their notice of participation and proposal bond to the Electricity Generating Authority of Thailand (“EGAT”). For Very Small Power Producers (“VSPPs”), the proposal bond must be submitted to the Provincial Electricity Authority by 6 November 2024 with the notice of participation by 7 November 2024. Applicants’ names will be announced by 14 November 2024, with successful projects selected within 30 days.
Selected projects will be notified of the conditions of their PPAs, which must be signed within 180 days for projects with SCOD in 2026 and within two years for projects with SCODs between 2027 and 2030.
Adjustment of Electricity Amounts for 2022 PPA FiT Projects
"To succeed in this competitive landscape, developers will need to demonstrate readiness in securing land, financing and technical expertise."
Projects that were selected under the 2022 PPA FiT scheme are eligible to adjust their offered electricity amounts in the First Additional PPA FiT Stage. Wind and ground-mounted solar projects that agree to reduce their offered electricity amounts to align with remaining quotas will be allowed to increase their capacity, provided it does not exceed the initial offer in the previous round.
SPP projects must submit their adjustment letters along with a proposal bond to EGAT between 9 October and 31 October 2024. VSPP projects have a submission window from 8 October to 18 October 2024. These adjustments offer developers a crucial opportunity to align their project scaling with availble quotas.
Second Additional PPA FiT Stage Details
The Second Additional PPA FiT Stage will be open to applicants who were not selected in the 2022 PPA FiT scheme or the First Additional PPA FiT Stage. This stage offers these applicants the opportunity to revise their previously submitted electricity sale offers. Additionally, those proposing ground-mounted solar power with energy storage may switch their project type to ground-mounted solar power without storage to participate in this stage.
The eligibility requirements, project selection criteria and FiT rates remain consistent with the previous round. The total electricity available for purchase in this stage will be determined based on grid capacity, which will be evaluated after the First Additional PPA FiT Stage is completed.
Opportunities and Strategic Implications
The 2024 updates to Thailand’s renewable energy framework open significant opportunities for both new and established players. The introduction of Direct PPAs provides greater flexibility for private energy deals, whilst the focus on energy storage creates new avenues for investment and innovation. To succeed in this competitive landscape, developers will need to demonstrate readiness in securing land, financing and technical expertise.
Conclusion
The 2024 updates to Thailand’s renewable energy regime reflect a strategic shift toward more flexible, investor-friendly policies, underpinned by the government’s commitment to sustainability. With the introduction of Direct PPAs, an increase in renewable energy targets and a growing emphasis on energy storage under the draft PDP 2024 and the 2024 FiT scheme, Thailand is positioning itself as a leader in Southeast Asia’s renewable energy transition. Investors and developers should seize the opportunity to align with Thailand’s ambitious renewable energy goals, as the country gears up to achieve 51% renewable electricity generation by 2037.
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Partner Bangkok
Senior Associate Bangkok
Associate Bangkok
