Thailand's power purchasing agreements for renewables switch to firm deals

Companies will be obliged to sell power to EGAT as contracted.

The power purchasing agreement (PPA) for renewable energy will change from non-firm to firm contracts for new licences, says the Energy Policy and Planning Office (Eppo), according to Maybank KimEng.

The energy policymaker expects licences for total power generating capacity of 1,000 megawatts from solar, wind, biomass, biogas and waste-to-power to be granted to investors this year, Eppo director-general Twarath Sutabutr told the Bangkok Post.

He said the National Energy Policy Council (NEPC) is expected to finalise the PPA regime by Feb 17.

Here's more from Maybank Kim Eng:

Firm contracts mean companies have an obligation to supply power to EGAT as contracted. Non-firm contracts mean they are not obliged to supply a certain amount of power to EGAT.

PPAs for renewable-power plants are normally based on non-firm contracts, as power resources - solar, wind and waste - are uncontrollable.

However, firm PPAs will not require continuous power loads like conventional power plants, but only during peak times for each power source.

The average plant factor of renewable power was 20-22% last year. The new ratio used in firm PPAs is expected to be 25-30%. This is to ensure efficiency.

The government will also award its new licences based on bidding. Bidding and higher requirements would mean tougher competition. We think the more experienced companies would have an upper hand. These would include key listed renewable-power producers such as EA, SPCG, TPCH, BCPG and TSE.