Thailand's 281 MW solar agreement could unlock $500m investment

After almost a year of delays, Thailand this week approved connection of 281.32 MW of new solar PV capacity across 67 individual solar farms in a move that the energy regulator believes will unlock more than 18 billion baht ($512 million) in clean energy investment this year.

Several listed companies in Thailand finally won the right to sell their solar power to the national grid last week, including Global Power Synergy Pcl, Superblock Pcl, Bangchak Petroleum Pcl and Solartron Pcl.

Following approval, each company now has 120 days to secure and sign PPAs with state electricity agencies across Thailand, and have until December 31 of this year to begin operations. The government has approved 25-year contracts for the 67 solar farms, which will be eligible for a FIT of 5.66 baht per unit ($0.16/kWh).

Revenue generated must be shared between the companies and cooperatives, confirmed Thailand’s director for the Energy Regulatory Commission Viraphol Jirapraditkul.

The regulator is hopeful that these projects will inspire other developers to press ahead with clean energy plans in the country, calculating that a further $512 million in investment could be forthcoming before the year is out.

Solar is poised to play a crucial role in Thailand’s future energy transition. The country uses natural gas to meet 65% of its energy demand, but the goal is to reduce that figure by 40% and increase renewable capacity. Solar’s cumulative size is currently 2.76 GW, and the country wants to raise that to 6 GW by 2036, or 31% of Thailand’s renewable energy output by that date, which is targeted to be 19.6 GW – a 20% increase on the previous clean energy target.

Thailand had previously targeted 6 GW of solar capacity for 2021, but has recently extended that deadline out to 2036 following a consultation in the nation’s energy plan. During this lull in procedure, many Thai solar firms began looking at foreign markets, such as Japan, for investment opportunities.