Thailand’s VSPP Program

15 March 2010

Energy Policy and Planning OfficePresented to representatives from

Tanzania

EPPO

Thailand’sElectricity Industry Structure

EPPO

Import(3%)

EGAT(45%)

IPPs(42%)

Generation(% share)

Transmission

Distribution

EGAT (100%)

PEA(66%)

MEA(32%)

Direct Customers(2%)

Users Users

Remarks: Figure of % Share in Fiscal Year 2007

VSPPs(<<1%)

SPPs(10%)

Govt.

ERC

Thailand’sElectricity Industry Structure

EPPO

Thailand’s Fuel Mix for Power Generation (Jan 2010)

Oil 0.2%

Natural Gas 70%

Import and Others 4%Hydro 5%

Lignite/Coal 21%

EPPO

History of Thailand’sVSPP Program

EPPO

• 2002 » VSPP Regulation introduced

» Applicable to renewable and co-generation facilities

» up to 1MW contracted capacity

• 2006» contracted capacity extended from 1 MW to 10

MW» Feed-in Tariffs (“ADDER”) introduced

• 2009» Adder rates adjusted

» Some rules and regulations adjusted (bid bond, , dispatch, and rooftop solar)

EPPO 101.501.508.008.006. Solar

71.001.001.500.80- Installed Capacity < 50 kW

71.001.000.800.40- 50 kW ≤ Installed Capacity < 200

kW

5. Small / Microhydro

101.501.503.503.50- Installed Capacity > 50 kW

101.501.504.503.50- Installed Capacity ≤ 50 kW

4. Wind

71.001.003.502.50- Thermal Process

71.001.002.502.50- Landfill and Digestor

3. Waste (MSW and Industrial Waste, excluding Hazardous Waste and Organic Waste)

71.001.000.300.30- Installed Capacity >1 MW

71.001.000.500.30- Installed Capacity ≤ 1 MW

2. Biogas

71.001.000.300.30- Installed Capacity > 1 MW

71.001.000.500.30- Installed Capacity ≤ 1 MW

1. Biomass

YearsSupport

ed

Special Adder

For Three Southernmost Provinces (Baht/kWh)

Special Adder for

Diesel Replaceme

nt(Baht/kWh)

2009Adder Rate

(Baht/kWh)

2007-2008Adder Rate

(Baht/kWh)

Type of Renewable Energy

Thailand’s Adder Program

EPPO

Thailand’s VSPP Status

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Co

ntr

ac

ted

Ca

pa

cit

y (

MW

)

biogas

MSW

small hydro

wind

biomass

solar

Total

biogas 67.030 42.777 69.321 43.039

MSW 120.550 67.450 96.360 10.820

small hydro - - 6.340 0.540

wind 69.250 33.800 25.040 0.380

biomass 373.733 257.100 1,495.890 287.835

solar 606.630 204.131 1,587.137 7.674

Total 1,237.19 605.26 3,280.09 350.29

under consideratio

n

accepted (w/out PPA)

PPA signedselling to the grid

EPPO

VSPP – types of technology & fuels

•PV

Thin-Film

Crystalline

-Solar Thermal

Parabolic Through

Stirling Engine

SOLAR

• Animal manure

• Industrial waste

• Rice Straw

Biogas

• Rice husks/rice straw

• Bagasse

• Jatropha

• Palm fiber/Empty palm bunch

• corncobs/corn shells

• woodchips/wood slaps

• cassava rhizhomes/pulps

• coconut fiber

• short-rotation plants

Biomass

• Thermal process

• Landfill

MSW

• mini, micro, pico

• (up to 200 kW)

Hydro• high-speed

• low-speed

Wind

VSPP Capacity – before and after ADDER

EPPO

Recent Changes and Lessons Learned

EPPO

Some Recent Changes, Lessons Learned, and the

Way Forward1. VSPP’s simplified application process has been

updated to discourage speculators2. Rooftop solar systems now receive adder based

on total kWh generated, not on net-metered kWh

3. Financial measures not enough4. Technical regulations subject to revision5. “ADDER” rates set to balance investment

against other public policy objectives6. Certain benefits of RE have yet to be quantified

and integrated into long-term power supply adequacy plan

EPPO

1. Simplified rules updated• VSPP regulation was previously designed to

simplify the application process in order to encourage small-scale RE systems to develop

– Previously designed for up to 1 MW contracted capacity– Previously designed before ADDER was introduced

• In 2009, some modifications to the rules have been made to discourage speculators:

Bid bond 200 Baht/kW sale except system sized <100 kW No adder will be given if the project cannot start selling power within 1 year after the SCOD (applicable to proposals without PPAs after Aug 2009)

EPPO

Example: 6 Largest Solar Energy Proposals that Have Been Accepted

No. CompanyTechnolog

yNo. of

facilities

Total Contracted

Capacity

(MW)

SCOD

1 บจก . ดี�แอนดีเจคลี�นเอ�นเนร์ยี่��ซิ�สเท็�ม

Solar Thermal: Stirling Engine

123All facilities have PPAs

718.30 Dec 2009-Dec 2013

2 บจก . เอ�ม เอ ไอ ดี�เวลีลีอปเม�นต์

Solar Thermal: Stirling Engine, Parabolic trough

41with PPAs 26( )

without PPAs (1 5 )

246156( )(9 0 )

Aug 2010-Mar 2011

3 บจก . โซิลี�าร์ เพาเวอร์ PV (Crystalline)

33

with PPAs 3( )without PPAs

30( )

194

176

4 )176( .4)

Sep 2011

4 บ. ผลี�ต์ไฟฟ"าพลี#งงานท็ดีแท็น (ปร์ะเท็ศไท็ยี่)

Solar Thermal: Parabolic trough

14All facilities have PPAs

99 Dec 2011

5 บร์�ษั#ท็ส(ฐิ�ต์� Solar Thermal: Parabolic trough

8

All facilities have PPAs

64 Dec 2009

6 บร์�ษั#ท็ไท็ยี่ โซิลีาร์เอ�นเนอร์ยี่�

Solar Thermal: Parabolic trough

8with PPAs 5( )without PPAs

3( )

6440( )24( )

Dec 2009-Dec 2011

ร์วม 227 1,385.30

80% of solar projects that have been accepted or have PPAs

EPPO

2. Rooftop Solar Systems• Residential rooftop solar systems previously received adder based on the net-metered kWh

• As of Aug 2009, rooftop solar energy systems can receive adder based on total kWh generated

some controversies regarding “residential rooftop” definition

Official definition: residential rooftop systems belong to those systems that subscribe to residential meters

Implementation? Abuse?

EPPO

3. ADDER as one of the supporting measures for RE

• Other financial measures and non-financial measures are needed to accelerate RE development

587 MW, 110 projects

16 MW, 21 projects

200 MW, 49 projects

4 MW, 13 projects

1,585 MW, 332 projects

3 MW, 6 projects

6 MW, 5 projects

2 MW, 48 projects

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

MW

underconsideration

accepted (w/outPPAs)

with PPAs selling to the grid

Solar Farms (>1MW each) Rooftop Solar

Solar VSPPs, dominated by solar farms

372 MW, 58 projects

2 MW, 2 projects

252 MW,35 projects

5 MW, 7 projects

1,494 MW,198 projects

2 MW, 3 projects

284 MW,47 projects

4 MW, 6 projects

0

200

400

600

800

1,000

1,200

1,400

1,600

Cont

ract

ed C

apac

ity

(MW

)

underconsideration

accepted (w/outPPA)

w/PPA selling to the grid

>1 MW ≤1 MW

The majority of biomass VSPPs are large-scale projects.

0.00

500.00

1000.00

1500.00

Cont

ract

ed

Capa

city

(M

W)

Others Rice husks Bagasse

Bagasse 8.00 6.00 92.00 172.30

Rice husks 121.00 101.20 1023.60 81.90

Others 244.73 149.90 380.29 33.64

under considerat

accepted (w/out

w/PPAselling to the grid

The majority of biomass VSPPs that have come online or already have contracts are owned by rice mills and sugar mills.

EPPO

4. Technical Regulations Subject to Revision

• Interconnection limits:– 8 MW ceiling for 22 kV feeder– 10 MW ceiling for 33 kV feeder

-Technically acceptable level of RE may vary from feeder to feeder

- Technical regulation based on “passive integration” rather than “active integration”

Benefits of RE for each feeder not taken into account

Benefits: line loss reduction, voltage regulation, peak cutting.

EPPO

5. ADDER Rates Subject to Revision

• In response to changing market conditions, technological change, and

remaining RE potential

Benefits of increased in RE investment are balanced against:

BENEFITS COSTS

-reduction of energy imports

-increase in FDI

-potential job creation and new business models

-potential local innovation

-reduction of GHGs and air pollution

-technical benefits to power systems

-pass-through to ratepayers

-trade deficits

-loss of agricultural land

-local air pollution ( systems <10 MW not subject to EIA)

EPPO

6. Certain benefits of VSPPs still yet to be quantified and integrated into long-term power supply adequacy

plan

Peak Load Reduction

Line Loss Reduction

GHG emissions Reduction

Power plants deferral

T&D deferral

EPPO

Thank youfor your attention!

EPPO

VSPP Status (Jan 2010)Fuels/ Technology Number

Installed Cap (MW)

Contracted Cap. (MW)

Number Installed Cap. (MW)

Contracted Cap. (MW)

Number Installed Cap. (MW)

Contracted Cap. (MW)

Number Installed Cap. (MW)

Contracted Cap. (MW)

Commercial Energycoal 0 - - 0 - - 4 147.870 24.000 2 19.000 6.000 natural gas 3 7.765 7.450 0 - - 8 36.750 29.600 0 - -

Total Commercial Energy 3 7.765 7.450 0 - - 12 184.620 53.600 2 19.000 6.000Renewables

1 Solar 126 613.930 606.630 62 214.816 204.131 337 1,641.039 1,587.137 51 7.785 7.674 PV 49 134.930 129.630 41 111.296 108.486 55 226.339 258.077 51 7.785 7.674 Thermal 77 479.000 477.000 21 103.520 95.645 282 1,414.700 1,329.060 0 - - - Parabolic trough 6 39.000 37.000 7 51.100 45.000 54 329.900 314.760 0 - - - Stirling engine 45 270.000 270.000 4 24.000 24.000 155 910.300 910.300 0 - - - others (Solar thermal) 7 56.000 56.000 10 28.420 26.645 71 162.500 92.000 0 - - - to be specified 19 114.000 114.000 0 - - 2 12.000 12.000 0 - -

2 Biogas 22 75.484 67.030 30 50.312 42.777 32 85.552 69.321 41 51.012 43.039 animal manure 0 - - 2 0.153 0.133 4 1.410 1.310 8 1.604 1.325 industrial waste 21 73.580 66.030 18 44.169 37.097 25 80.942 64.861 29 47.566 40.054 Rice Straw 0 - - 4 1.300 1.290 0 - - 4 1.842 1.660 Others (e.g., grass) 1 1.904 1.000 6 4.690 4.257 3 3.200 3.150 0 0.000 0.000

3 Biomass 60 491.272 373.733 42 328.050 257.100 201 1,970.865 1,495.890 53 720.026 287.835 Palm fiber 0 - - 2 2.800 2.000 1 9.500 8.000 1 12.000 8.500 Jatropha 0 - - 1 9.500 8.000 1 9.500 8.000 0 - - Bagasse 2 38.000 8.000 1 18.000 6.000 12 258.000 92.000 29 530.800 164.300 Bagasse+Rice husks 0 - - 0 - - 0 - - 1 39.400 8.000 Rice husks 9 75.600 63.500 7 62.740 53.200 35 314.900 267.900 13 71.450 67.400 Rice husks+wood chips 7 62.400 49.500 6 59.000 48.000 93 916.800 742.500 2 27.100 14.500 Rice husks+corncobs 0 - - 0 - - 1 9.000 7.800 0 - - saw dust 0 - - 0 - - 0 - - 1 0.600 0.600 coconut fiber 2 2.400 2.000 3 19.460 16.150 1 6.000 5.000 0 - - corncobs/corn shells 1 1.800 1.800 0 - - 1 9.900 8.000 1 0.160 0.135 corncobs+Rice husks 1 9.900 8.000 0 - - 1 6.000 5.400 0 - - Empty palm bunch 2 17.456 12.280 3 22.000 20.000 6 48.450 36.500 4 26.516 18.200 wood slabs 1 7.500 6.750 0 - - 1 6.000 5.500 0 - - Rice Straw 0 - - 1 0.150 0.150 0 - - 0 - - cassava rhizhomes+pulp 0 - - 0 - - 4 21.900 17.600 0 - - short-rotation plants 0 - - 1 1.400 1.000 5 24.315 21.250 0 - - wood chips 35 276.216 221.903 14 103.600 85.600 38 325.500 265.640 1 12.000 6.200 other biomass 0 - - 3 29.400 17.000 1 5.100 4.800 0 - -

4 MSW 20 140.360 120.550 14 84.580 67.450 14 108.585 96.360 8 12.540 10.820 Gas Engine 6 24.180 22.800 5 15.280 14.950 5 32.925 31.260 6 6.340 5.820 Steam terbine 3 21.980 18.750 7 58.200 47.000 8 70.540 60.100 2 6.200 5.000 Gasification 1 6.000 6.000 1 1.200 1.000 1 5.120 5.000 0 - - to be specified 10 88.200 73.000 1 9.900 4.500 0 0.000 0.000 0 - -

5 Hydro 0 0.000 0.000 0 0.000 0.000 7 6.365 6.340 3 0.560 0.540 < 50 kW 0 - - 0 - - 2 0.070 0.055 2 0.080 0.060 50 - 200 kW 0 - - 0 - - 2 0.185 0.175 0 - - > 200 kW * 0 - - 0 - - 3 6.110 6.110 1 0.480 0.480

6 Wind 11 77.325 69.250 9 34.900 33.800 5 26.424 25.040 3 0.380 0.3807 Used Veg.Oil* 0 - - 0 - - 1 0.025 0.025 0 - -

Total Renewables 239 1,398.371 1,237.193 157 712.658 605.258 597 3,838.855 3,280.113 159 792.303 350.288Grand Total 242 1,406.136 1,244.643 157 712.658 605.258 609 4,023.475 3,333.713 161 811.303 356.288

หมายี่เหต์(1. * ไ ม่�ไ ด้�รั�บส่�วนเพิ่��ม่รัาคารั�บซื้�� อไ ฟฟ�า2. ส่ถานภาพิ่การัรั�บซื้�� อไ ฟฟ�าจาก VSPP ข้�อม่�ล กฟภ. ณ เด้�อน ม่กรัาคม่ 2553 และ กฟน. ณ เด้�อน ธั�นวาคม่ 2552

under consideration accepted (w/ out PPA) PPA signed connected to the grid

EPPO

Solar VSPP by type of technology

0.000

500.000

1,000.000

1,500.000

2,000.000

Cont

ract

ed C

apac

ity

(MW

)Solar VSPP Status (Jan 2010)

Thermal 477.000 95.645 1,329.060 -

PV 129.630 108.486 258.077 7.674

under consideration

accepted (w/out PPA)

with PPAselling to the

grid