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Renewables key for Thailand to overcome dependency on fossil fuel

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Renewable energy development is key for Thailand to cut its dependency on fossil fuel imports, as gas-based thermal power generation accounted for nearly 61.3% of the country’s annual electricity generation in 2021, says GlobalData, a leading data and analytics company.

Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “The Erawan field, the largest gas field in Thailand, is facing a decline in output, mainly due to a dispute between Chevron and Thailand’s state-owned oil and gas company, PTT Exploration & Production (PTTEP), which took over the field’s operations in April 2022.

Saibasan concludes: “Although such measures are encouraging for the renewable power industry, the government should look to bolster its renewable capacity on a large scale to overcome its dependence on thermal power and on fossil fuel imports. While environmental activists have opposed the increased use of coal-based power, electricity imports from neighbouring countries, such as Malaysia and Laos, to meet the growing demand may not be a viable solution for the country in the long-term given the rise in price of fossil fuels.” Due to a decline in supplies from the Gulf of Thailand, the share of domestic gas supply in Thailand fell from 64% to 40% in the first half of 2022, leading to an increase in imports of liquified natural gas (LNG), which, in turn, resulted in high electricity bills for end-consumers.

GlobalData’s latest report, ‘Thailand Power Market Size, Trends, Regulations, Competitive Landscape and Forecast, 2022-2035’, reveals that depleting natural gas reserves and rising fuel import bills have become major challenges for Thailand. The government also announced that under the Feed in Tariff (FiT) mechanism, 282.92 MW of renewable power capacity from small power producers (SPP) and very small power producers (VSPP) will be realized. The country is aiming to generate 53% of its electricity from natural gas, 35% from non-fossil fuels and 12% from coal in 2037. In its Power Development Plan (PDP), the government aims to increase the country’s power capacity from 46,090 MW in 2017 to 77,211 MW in 2037.

Saibasan continues: “The plan to meet the demand through coal-based generation and imports create a risky scenario for the country. The country’s natural gas reserves are expected to decline sharply by 2030 if no new reserves are found. A lack of innovation from PTTEP is also a growing concern since gas deposits are found in small pockets in the Erawan field and hundreds of wells are required to be drilled every year to maintain output.” However, the Prime Minister of Thailand ordered the country to cut its power use by 20% as a precaution. In April 2022, the government reassured consumers that there would be no electricity shortages like those seen in Vietnam or Sri Lanka. The country should look to leverage on its strengths.” The country has a developed market for biopower and there are several solar PV projects underway. The electricity generated from these plants will be used to supply to commercial users in 2025–2026.

Written By: Supaporn  Pholrach (Joom)

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