Thailand: 4,300 MW of Renewables
with Feed-In Tariffs
Dec 07, 2010 - Paul Gipe - Wind-Works.org
Since the introduction of its small power program
in 2006, Thailand has signed contracts to develop
4,300 MW of renewable generation. Nearly half of
the contracts--1,800 MW--are for solar energy alone.
Currently 850 MW of generation is online as a result
of the program, says Chris Greacen, a former consultant
to the Thai government. The large majority of that,
700 MW, is from biomass. Only 16 MW of solar is in
operation, but the number of projects is growing
rapidly, according to Greacen.
Thailand's Very Small Power Producer (VSPP) program
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 program elsewhere, the Thai feed-in
tariffs are differentiated by Technology. However,
the Thai feed-in tariff program 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.
The Thai program includes anti-gaming provisions
to discourage "briefcase" project developers
from clogging the program with applications that
are unlikely to be built. The program requires 200
baht/kWh ($6/kW) deposit to prove the developer's
good faith. Further, no adder will be paid if project
completion is more than 1 year past its due date.
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 under contract.
To increase project diversity, Thailand is providing
government-backed loans at 4% interest up to 50 million
baht ($1.6 million) per project. Similar to Germany's
KfW (the German Bank for Reconstruction and Finance),
the government has loaned 4 billion baht to 13 banks
at 0.5% interest for use in the program.
The Thai program followed the introduction of a
net-metering policy in 2002. The current feed-in
tariff program went into effect in 2006.
Projects are limited to 10 MW and contracts
vary from 7 to 10 years.
Most solar photovoltaic projects under contract
are large, groundmounted arrays. Interestingly, nearly
all will use inverters made by a domestic Thai manufacturer.
Payment for a typical solar project not located
in the southern provinces would include 8 baht/kWh
solar bonus, 2.6 baht/kWh for the wholesale avoided
cost, plus 0.93 baht/kWh for the fuel volatility
bonus. The total payment, 11.5 baht/kWh is about
$0.38 USD/kWh. However, solar contracts are good
for only ten years.
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