Addressing Technical Challenges in Introducing FiT: the Case of Thailand

Renewable Energy Policy and Regulation: Workshop on Feed-in Tariff Policy Session 4: Addressing Technical Challenges June 21, 2011 ADB Headquarters, Manila Bundit Fungtammasan The Joint Graduate School of Energy and Environment (JGSEE) and Center for Energy Technology and Environment (CEE) King Mongkuts University of Technology Thonburi, Thailand

Scope
Policies and regulations on distributed RE generation The Thai FiT Successes to date Addressing present technical challenges: the case of grid code Planning for the future

Thailands Renewable Energy Policy and Regulation in Brief

Introduced Feed-in premium, or adder in 2007 first in the region Several years of experience dealing with distributed co-generation and RE generators prior to adder

Thailands Renewable Energy Policy and Regulation in Brief (2)

Energy Conservation and Promotion Act (1992), amended 2007
Basis for providing financial and logistics support for energy conservation, energy efficiency and renewable energy projects Basis for setting up ENCON program and ENCON Fund (1995) - derived from a levy on domestically sold petroleum and channeled to support RE and EE projects, R&D, etc

Thailands Renewable Energy Policy and Regulation in Brief (3)

Power Purchase Regulation for SPPs (1992, < 60 MW, later 90 MW in 2006) Obligating state-own generation company to allow SPPs to connect to the grid and to purchase power from SPPs using RE and/or fossil fuels (co-gen) Power Purchase Regulation for VSPPs (2002, initially < 1 MW, later 10 MW in 2006) Allows renewable generators to connect to state-owned distribution companies and received tariffs at the utilitys avoided cost

Thailands Renewable Energy Policy and Regulation in Brief (4)

Early policy targets under SPP program
Typically 300 400 MW for each round of bids

Policy targets under Energy Strategy for Competitiveness (2003)

8% RE share of final energy consumption by 2011 (from less than 1%), including electricity, heating and biofuels

Thailands Renewable Energy Policy and Regulation in Brief (5)

Policy targets under RE Development Plan (2008 2022)
14% RE share of final energy consumption by 2022. Challenges for the next 10 years - Triple capacity of renewable electricity to nearly 6,000 MW - Triple renewable heat to 7,400 ktoe - 4.5 times usage of biofuels to 13.5 Ml/d

Financial Incentives
Tariff subsidies (prior to 2007) for firm and non-firm SPPs , pricing based on bids and other criteria Feed-in premiums (adder provision) introduced in 2007 for VSPPs and SPPs additional purchasing price guaranteed on top of normal tariff for 7 10 years, technology and capacity differentiated (price fixed for VSPPs; for SPPs, fixed for some fuels, otherwise bidding required)

Adder for renewable electricity (on top of normal tariff of ~ 8 10 US Cents/kWh)

Technology Biomass <=1MW Biomass > 1MW Biogas <=1MW Biogas > 1MW Wastes Landfill/anaerobic digestion Wastes - Thermal Process Wind <=50 kW Wind > 50kW Hydro 50-<200 kW Hydro < 50 kW Solar Us Cents/kWh 1.7 1.0 1.7 3.3 8.3 11.6 15.0 11.6 2.7 5.0 26.7* Duration (y) 7 7 7 7 7 7 10 10 7 7 10

* Being revised to reflect the lowered cost of PV

Results on RE deployment
Early SPP and VSPP schemes (until mid-2008) promoted on-grid generation
No. Installed Generators Capacity (MW) SPP VSPP 35 100 615 215 Fuel Biomass Biomass, biogas

Since redefining capacity range and introducing adders in 2007 (as of March 2011)
No. Installed Generators Capacity (MW) SPP VSPP 26 221 Fuel

637 Biomass 954 Biomass, biogas, solar, MSW

Distributed Renewable Generation: Proposed and Installed Capacity by SPPs (MW)

1600 1400 1200 1000 800 600 400 200 0
Solar Biomass MSW Wind Others

As of March 2011

Operating: 637 MW Accepted: 427 MW Pending: 2,394 MW

Source: EPPO 2011

Distributed Renewable Generation: Proposed and Installed Capacity by VSPPs (MW)

3,500 3,000 2,500 2,000 1,500 1,000 500 0 Pending: 1,785 MW Accepted: 4,197 MW Operating: 952 MW

As of March 2011

Source: EPPO 2011

Grid Structure
VSPPs Generating Company SPPs

Transmission
Distribution (Provincial)

Distribution (Metropolitan)

Direct Customers

Distribution Users Users

Barriers Prior to 2008

High technical standards for grid protection (IEEE) Complicated procedures and long time lags for permitting Limited access to grid in some areas High costs

Improvements Since 2008

Energy Business Act (2007): covering electricity generation and distribution, and transportation and distribution of gas Energy Regulatory Commission (ERC) established in 2008
Issues permits for setting energy businesses, sets standards and regulates price

Improvements since 2008 (2)

Energy Business Act (2007) obligates grid operators to accept grid connection by licensed generators Provincial Electricity Authority (PEA) issued a new grid code (Dec 2008) for VSPPs superseding previous regulations (2003) New code simplified to allow easier, more predictable access, still very protective

The New Grid Code (2008)

PEA Grid Code

Service Code

Connection Code

Operation Code

The New Grid Code

Service Code
scope and guidelines for requesting permits to connect to the grid

Connection Code
Minimum, requirements on technical design; detailed specifications of electric equipment; and installation standards Maximum power connection limits (<8 MW/feeder for 22 kV, <10 MW for 33 kV, etc)

The New Grid Code (2)

Operation Code
Duties and responsibilities of distributed generators on grid operation Requirements and technical specification on grid operation practice at the point of connection to ensure safety, reliability and quality of the power and grid systems

The New Grid Code (2)

Barriers and challenges
A number of requirements on design and operation on the part of DGs, responsibility in meeting the cost of several equipment items DGs to bear the cost of upgrading or extending the grid to meet the needs of DGs Limited feeders (occupied by investors who have obtained licenses but not generating) Increase of much more intermittent Res (PV and wind) in the near future

Planning for the Future

PEA announced a clear policy on smart grids and working on a 15-yr roadmap EGAT (Generating) and MEA also studying smart grids EGAT still more conservative, giving low dependability factor for PV and wind generators in current power development plan (PDP2010) Changes could be expected following postponement of nuclear plan

Thank you
bundit@jgsee.kmutt.ac.th