Despite the government’s plan to increase the share of renewable sources, Thailand’s future in alternative energy investment looks dim because of low returns after recent changes to subsidies, says Sombat Teekasap, chairman of the Federation of Thai Industries renewable energy club.
The Energy Policy and Planning Office (Eppo) recently terminated adder tariffs, a special rate given to private renewable energy producers to promote the sector, and applied a new feed-in tariff instead.
The feed-in tariff will be applied to all new renewable energy operators except those in the solar power sector, which will continue to receive an adder tariff at a lower rate of 6.5 baht per kilowatt per hour, down from 8 baht previously.
“However, the 6.5 baht might change according to the costs associated with changes in technology,” Dr Sombat said.
Eppo said the change was being made because of an excessive number of investors applying for adder tariffs for energy output totalling 7,600 megawatts _ higher than the government’s target of 5,000 MW.
Dr Sombat, who is also vice-chairman of the executive environment committee, said the number of private renewable energy producers would decline as a result of the new feed-in tariff, despite the government’s previous approval of a revised plan calling for renewable energy to account for 25% of the country’s consumption by 2021, up from a previous target of 20%.
The new plan calls for increasing solar power to 2,000 megawatts from the previous target of 500 MW.
“The Electricity Generating Authority of Thailand (Egat) will be affected by this [the new feed-in tariffs], as they might have to increase the amount of power plants due to lower private investment,” Dr Sombat said, adding that the private sector would be hurt as the situation and technologies are changing quickly.
The private sector has sent a letter asking the Energy Minister to postpone the feed-in tariff for another six months.
“Investors applying for adder tariffs in sectors like biomass and biogas should be allowed to [continue using adder tariffs], as applications have not yet reached the projection,” Dr Sombat said.
