Thailand: PPA for renewables switching to firm contracts

Thailand: PPA for renewables switching to firm contracts

The power purchasing agreement (PPA) for renewable energy will change from
non-firm to firm contracts for new licences, says the Energy Policy and
Planning Office (Eppo).

The energy policymaker expects licences for total power generating capacity
of 1,000 megawatts from solar, wind, biomass, biogas and waste-to-power to
be granted to investors this year, Eppo director-general Twarath Sutabutr
told the Bangkok Post.

He said the National Energy Policy Council (NEPC) is expected to finalise
the PPA regime by Feb 17.

A firm PPA is a contract under which operators need to supply power as
required by the Electricity Generating Authority to ensure the state
enterprise gets the exact energy supply specified in the contract.

The change in the PPA is aimed at increasing the efficiency of power
generated from renewable resources that are uncontrollable, such as solar
power, which is limited to the daytime and wind energy, which heavily
depends on the monsoon season.

In contrast, power generated from biomass depends on the agricultural waste
from crops that are used as power resources.

Because of this, the firm PPA will not require continuous power load, but
only during the peak times for each power source. For instance, the firm PPA
for solar power will require power to be loaded and stored during the peak
hot season from March to June, said Mr Twarath.

The average "plant factor", which is the ratio of the average power load of
a plant to its rated capacity, will be set at a slightly higher ratio to
encourage investors to seek efficient power-generating turbines and systems.

The average plant factor of renewable power was 20-22% last year, but the
new ratio expected to be used in the firm PPA will be 25-30%.

More specifically, plant factor for solar power was 16-20%, while plant
factor for biomass and biogas were 30-80%, he said.

Over the past three years, more than 9,000MW of renewable power has come
onto the national power grid, rising 50% from 2012. The amount of renewable
power is expected to rise to 19,600 MW by 2036, said Mr Twarath.

Small power producers with capacity between 10-90MW and very small power
producers with capacity lower than 10MW will be covered under the new round
of the firm PPA.

"Investors will be indirectly forced to select an appropriate technology,
power management and power storing technology to operate and supply power to
match the requirements of the firm PPA," Mr Twarath said.

Investors who are operating renewable power projects under the non-firm PPA
could also be allowed to join the new round of firm PPA licences, he said.

The idea of a firm PPA was welcomed by operators.

Cherdsak Wattanavijitkul, chief executive of TPC Power Holding Plc, said the
revision of the PPA for renewable power is not viewed as an obstacle for the
company since its four existing biomass projects currently run around the
clock.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1185049/ppa-for-renewables-switchin
g-to-firm-contracts

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com