Thailand ramps up shift to renewables, country to embrace wind and solar to reduce dependency on imported fuel

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A solar installation in Bang Pa-in, Ayutthaya is operated by BCPG Plc, the clean power generation arm of the energy company Bangchak Corporation Plc. (Photo: BCPG)

Thailand ramps up shift to renewables, country to embrace wind and solar to reduce dependency on imported fuel

High gas costs and dwindling domestic supplies increase urgency of adding wind and solar power

The fallout from the global energy crisis is pushing Thailand to accelerate its shift to renewables after dragging its feet for years, the latest country to embrace wind and solar in order to reduce dependence on imported fuel.

The country was forced to rethink its renewable energy strategy following last year’s surge in natural gas prices sparked by Russia’s invasion of Ukraine, said Wattanapong Kurovat, director-general of the Energy Policy and Planning Office. The situation was exacerbated by the drop in local production.

“When we called on renewables plants to sell us more energy last year, we found that what we had was really all there was,” Mr Wattanapong said in an interview in Bangkok. “We couldn’t call for more when we needed it.”

While some countries are responding to the surge in global fuel prices by investing more in coal mines or gas fields, others — like Thailand — are looking at solar panels and wind turbines to make themselves more energy independent.

As part of an energy security push, the government last month announced winners for a power purchase plan covering rroughly 5 gigawatts of renewables — the biggest so-called feed-in tariff programme to date — that is set to essentially double wind and solar capacity by 2030. On top of that, authorities are now also planning another round for 3.67 gigawatts later this year, said Mr Wattanapong.

This is a reversal for Thailand, which had stalled new wind and solar in preference for natural gas for years as a transition fuel to eventually adopt cleaner sources. It can also be difficult in parts of the emerging world for renewable projects to gain a foothold amid grid restraints, red tape and a lack of funding.

The country depends heavily on liquefied natural gas (LNG) imports for power generation, resulting in sky-high costs after spot prices surged last year. The Electricity Generating Authority of Thailand (Egat) was saddled with roughly 150 billion baht in costs to curb utility bill hikes last year.

Rising power costs have become an issue in the campaign for the May 14 election, prompting several parties to propose cutting energy bills. As households and businesses suffer, the groundwork for domestic renewable sources has become more urgent, Mr Wattanapong said.

The government’s next power development plan, which is expected to be proposed later this year to a new cabinet, is going to have more ambitious renewable energy goals, said Mr Wattanapong. The revisions are also aimed at helping Thailand reach its climate goals to cut emissions by 30-40% by 2030, on a path to reach net zero by 2065.

Renewables will account for more than 50% of the power generation mix by 2037, up from about 20% in the current plan, said Mr Wattanapong.

The urgency is also punctuated by declining domestic gas production. Output at Erawan, the country’s biggest natural gas field in the Gulf of Thailand, plummeted by 64% last year after US-based Chevron Corp handed over the field to state-owned PTT Exploration & Production Plc. While it aims to lift domestic output through 2024, the government wants to reduce dependence on the fuel.

“Our domestic natural gas is only going to keep depleting,” said Mr Wattanapong. “Eventually, gas will play an ever smaller role in the power mix.”