Overview

The energy and electricity sector in Thailand is governed by the Ministry of Energy (MOE) and involves multiple agencies: the Department of Alternative Energy Development and Efficiency (DEDE), Department of Energy Business, Energy Policy and Planning Office (EPPO), the Department of Mineral Fuels (DMF), the Department of Energy Business (DOEB), Energy Regulatory Commission (ERC), Electricity Generating Authority of Thailand (EGAT), Metropolitan Electricity Authority (MEA), Provincial Electricity Authority (PEA), Petroleum Institute of Thailand (PTIT), and PTT Public Co., Ltd.

The total installed power generating capacity in Thailand is approximately 53 gigawatts as of December 2022 generated by EGAT, independent power producers (IPPs), small power producers (SPPs), very small power producers (VSPPs), and imports.   Renewable energy capacity is around  23% of the total installed capacity.  Renewable energy in Thailand relies primarily on domestic production, namely solar, wind, small and large hydropower projects, biomass, biogas, and waste-to-energy.  The country also imports hydropower from Lao PDR.  Thailand has renewed its focus on increasing its renewable energy capacity to meet the country’s climate goals of carbon neutrality by 2050 and net zero greenhouse gas emissions by 2065, announced at COP26. 

The Royal Thai Government is preparing the Thailand National Energy Plan (NEP), a strategy that envisions the future of Thailand’s energy system through the 2040s.  The NEP will provide the policy direction for both government agencies and private companies operating in the energy sector.  The NEP 2023, which is waiting for approval by the new cabinet, is expected to increase renewable energy used to over 50 percent in support of carbon and net-zero greenhouse gas emissions goals. 

In addition to increasing the share of renewables, the NEP aims to promote more efficient energy use, with a goal to cut energy consumption by 30 percent in 2030 and 40 percent in 2050.  The NEP 2023, will combine and synchronize five action plans: Gas Plan, Power Development Plan (PDP), Alternative Energy Development Plan (AEDP), Oil Plan, and Energy Efficiency Plan (EEP).

Thailand’s natural resources support its goal of increasing renewable energy in the country’s energy mix, with solar (grounded, rooftop, and floating) projected to comprise over 80 percent of the planned renewable energy mix.  The country also has a high potential for biopower, arising from an abundance of feedstock resources for biomass, biogas, and biofuels. 

Thailand is currently carrying out pilot projects for the development of an advanced grid system to better manage the grid volatility that accompanies the introduction of renewable energy.  The private sector is also pursuing opportunities to develop projects with battery energy storage system (BESS) technologies.  The government is actively seeking new policy initiatives that enable households to generate and store electricity and then sell excess electricity back to the grid.  The government is considering incorporating these policies in smart cities development so as to evaluate the potential of expanding this mechanism nationwide.  Other energy and energy related technologies being sought to facilitate Thailand’s energy transition are Carbon Capture, Utilization and Storage (CCUS), hydrogen, Sustainable Aviation Fuels (SAFs), grid modernization and digitalization, power system operation and management, and Small Modular Reactors (SMR).

Thailand faces energy security challenges.  Approximately 60 percent of electric power in Thailand is generated from natural gas.  With domestic gas reserves projected to dry up in the next 10-20 years, liquefied natural gas (LNG) will play a critical role in ensuring long-term electricity security.  Given that diversification of the energy supply is seen as a necessary step towards enhanced national energy security, the government is importing more natural gas and is expanding gas receiving terminals, the regasification system, and gas storage tanks to increase capacity to 26 million metric tons per annum (MMTPA) by 2037.

Leading Sub-Sectors

• Renewable energy equipment
• Smart grids/microgrids
• Energy storage system: battery energy storage system
• LNG supply and related
• Hydrogen technology
• Carbon capture technology and solutions

Major buyers include government-owned electric power authorities, including the Electricity Generating Authority of Thailand (EGAT), the Metropolitan Electricity Authority (MEA), the Provincial Electricity Authority (PEA), private power producers (IPPs, SPPs, VSPPs), and industrial estate developers.

Opportunities

Thailand is gearing for a sustainable energy transition and anticipates the following developments will lead to disruption in the energy sector: digitalization, decarbonization, decentralization, deregulation, and electrification.  The country needs to adopt new technologies in the energy sector and focus on energy efficiency.    

Three main themes for energy in Thailand are:

1. Energy for All:  The Ministry of Energy designed the Energy for All plan to support businesses and communities jointly investing in biomass and bio-gas fired powerplants.  Athough the Scheme faced delays due to the pandemic, a cabinet reshuffle, and the revision of its conditions and business model, and legal challenges,  projects in biomass and biogas through community power plants are pushing forward. The first phase was granted with the total generation capacity of 149.5 megawatt (MW).  The capacity for the second phase is expected to increase to 400 MW.  Thailand’s power lines will be upgraded from 115kv to 500 kv or 800 kv to support alternative power and reach communities that produce them.
2. Power Trade Hub of Southeast Asia: Thailand aims to be the power trading hub in Southeast Asia by improving high-voltage transmission lines across the country to open regional power trading and sales of surplus electricity.  The improvement of the transmission lines and grid connections in Southeast Asia with smart and macro grid technologies are critical to achieving this goal.
3. Regional LNG Trading Hub: The Ministry of Energy has championed a plan to promote Thailand as a free trade hub for LNG since 2016. To support Thailand as a regional LNG trading hub, the Industrial Estate Authority of Thailand signed an agreement worth $1.33 billion with Gulf MPT LNG Terminal Company to build the country’s third LNG import terminal. Commercial operations are slated to begin by 2025. At present, Thailand has two LNG terminals; Map Ta Phut LNG Terminal I and Map Ta Phut LNG Terminal II with a capacity of 11.5 MMTPA and 7.5 MMTPA respectively. 

Thailand offers promising market opportunities for U.S. suppliers and exporters of oil and gas, electrical power systems, and energy equipment.  The National Energy Plan (NEP) 2023 plays a significant part in Thailand’s move towards green and clean energy with aggressive measures to reach carbon neutrality between 2065 and 2070.  Reaching carbon neutrality requires deploying new technologies in the energy sector (e.g., advanced energy storage and electric vehicles) and increasing the penetration of existing low-carbon technologies (e.g., solar power) to uncharted levels. 

Demand-side measures such as energy efficiency, fuel switching, and load shifting may become increasingly important, leading to substantial differences in the timing and makeup of energy requirements.  Thailand will transform the full use of transportation to green electricity through the promotion of electric vehicles (EVs) and the 30:30 policy, a plan for Thailand to produce 30% of EVs in country by 2030.  U.S. companies could potentially play major roles in providing know-how and technology. 

Table: Trade of Thailand’s Energy Sector Equipment (Millions USD)

(total market size = (total local production + total import)-total exports)

Data Source: The Thai Customs Department (HS Code: 7304, 7305, 7306, 7311, 8413, 8419, 8421, 8428, 8430, 8431, 8479 8481, 9026, 8705, 8901, 8905)