When Thailand presented its Power Development Plan 2018 overseas investors sniffed an opportunity and the Osaka Gas Singapore Pte. Ltd unit of Japan’s Osaka Gas has now announced it will enter a joint venture (JV) with Thai solar company Energy Pro Corporation Ltd.
The partners will establish a company under the provisional name OE Solar Co. Ltd, to supply electricity from solar assets already in operation. The move will reportedly mark the first involvement of Osaka Gas in renewable energy in Southeast Asia. Parent company Daigas Group said it wants to secure power sources amounting to 1 GW of renewables generation capacity in the region by 2030.
The JV will offer corporate power purchase agreements (PPAs) for Thailand’s commercial and industrial solar sector. OE Solar will install PV on roofs and other free areas of commercial client premises and sell the electricity generated directly to the companies for 15-20 years. The model could prove attractive to customers seeking to comply with renewable energy baselines without making significant upfront investment.
Thailand’s clean energy policy aims to raise self consumption of power and wean generators off feed-in tariffs. For the residential solar sector, Thailand recently introduced a net metering scheme that pays THB1.68/kWh ($0.052), substantially less than the current residential power price of THB3.80/kWh. Solar system owners would also have to pay a grid connection fee of around THB8,500.
The kingdom’s updated renewable energy plan operates on a 2037 horizon and foresees 35% of power coming from renewables by then. The nation currently sources no more than 10% of its energy from renewables.
According to figures published by the International Renewable Energy Agency (IRENA), Thailand boasted cumulative solar power generation capacity of 2.7 GW last year. Only 23 MW were deployed in 2018, however, with most of the nation’s PV capacity installed between 2011 and 2016, when FITs were granted to large scale and rooftop projects.
The solar generation capacity target for 2037 is set at 6 GW but IRENA suggested in a recent report that ambition could be raised to 17 GW. The agency cited abundant solar energy resource potential and rapidly falling system costs as the perfect combination for a rooftop PV market that is mostly untapped. The explosion in new solar capacity witnessed in regional neighbor Vietnam last month illustrates what is possible with the help of supportive PV policies.