By Abbas Nazil
Thailand is poised to transform its energy procurement landscape by allowing businesses to directly purchase renewable energy from producers, such as solar farms, marking a significant step toward accelerating the country’s green transition.
Prime Minister Srettha Thavisin has issued a directive for the development of a direct power purchase agreement (PPA) framework, with a clear timeline for its completion by the end of the year.
This directive came during a mobile Cabinet meeting in Phayao, where the government emphasized its commitment to advancing clean energy initiatives.
The decision to introduce direct PPAs follows discussions between U.S. Commerce Secretary Gina Raimondo and Thai officials during her recent visit.
Raimondo highlighted the importance of such agreements for businesses seeking to reduce their carbon footprint and adopt renewable energy solutions more efficiently.
In response, Srettha assured that a definitive PPA policy would soon be in place, underscoring Thailand’s readiness to support international and domestic enterprises in their sustainability efforts.
Under the current structure, renewable energy producers in Thailand are required to sell their electricity to the state-run Electricity Generating Authority of Thailand (Egat) at pre-determined rates, limiting flexibility and slowing the pace of renewable energy adoption.
By introducing a direct PPA framework, businesses will gain the ability to negotiate contracts directly with energy producers, fostering a more competitive and dynamic energy market.
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This shift is expected to provide companies with greater control over their energy sourcing, pricing, and sustainability commitments, while also encouraging more investment in renewable energy infrastructure.
To expedite the transition, the Prime Minister instructed the Energy Ministry to fast-track the development of the PPA framework and present it for approval to the National Energy Policy Council (NEPC).
The urgency behind this move reflects Thailand’s broader strategy to meet its long-term decarbonization goals and reduce dependence on fossil fuels.
In a related development, the NEPC recently approved a plan allowing Egat to procure an additional 3,668.5 megawatts of clean energy.
The allocation includes 2,368 megawatts from solar energy, 1,000 megawatts from wind energy, and 6.5 megawatts from biomass, adding to the existing 5,203 megawatts already being purchased under established tariffs.
This expansion signals a robust commitment to diversifying Thailand’s energy mix and enhancing energy security through renewable sources.
The proposed PPA framework is expected to play a crucial role in aligning Thailand’s energy sector with global sustainability trends.
By offering businesses more flexible and direct access to clean energy, the policy supports economic competitiveness while contributing to the country’s ambitious environmental targets.
As the Energy Ministry works to finalize the framework, stakeholders across industries are watching closely, anticipating a greener and more resilient energy future for Thailand.
