Will shift in Thailand's PPA for renewables help or cause harm?

Tougher bidding competition looms ahead.

When the power purchasing agreement (PPA) for renewables in Thailand changes to firm contracts by February, uncontrollable power sources such as solar, wind, and waste may face difficulties in fulfilling their obligations and tougher competition in biddings.

Reports from Maybank Kim Eng show that the Energy Policy and Planning Office (Eppo) expects licenses for 1,000 MW of power from solar, wind, biomass, biogas, and waste-to-power, this move will mean that renewable energy companies shall have an obligation to supply power to EGAT as contracted. However, they will also not require continuous power loads like like conventional power plants, but only during peak times for each power source.

The average plant factor of renewable power to be used in firm PPAs is expected to be 25-30%, compared with 20-22% last year, which will ensure efficiency.

The Thai government will also rewards its new licenses for renewables based on bidding. Bidding and higher requirements may cause tougher competition between industry newbies and big players. Experienced companies such as EA, SPCG, TPCH, BCPG, and TSE are listed renewable-power producers that may benefit from this arrangement.