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), 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 around 49 gigawatts generated by a mix of EGAT, independent power producers (IPPs), small power producers (SPPs), very small power producers (VSPPs), and imports.  Renewable energy installed capacity is around 11 gigawatts (nearly 23%) of the total installed capacity.  Renewable energy in Thailand has primarily relied on domestic production, namely solar, wind, small and large hydrogen, biomass, biogas, and waste-to-energy.  Thailand has renewed its focus on developing renewable energy to meet rising energy demand and declining natural gas reserves.  Several initiatives have been planned across all the renewable energy sectors.

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 development policy direction in the energy sector for both government agencies and private companies.  The NEP 2022, expected to be endorsed in 2023, will combine and synchronize the five action plans, namely the draft Gas Plan 2018, Power Development Plan (PDP) 2018 Revision (Rev.) 1, draft Alternative Energy Development Plan (AEDP) 2018, Oil Plan 2018, and draft Energy Efficiency Plan (EEP) 2018.

The PDP 2018 Revision 1 (2018-2037) aims to increase generating capacity from 46,090 megawatts to 77,211 megawatts by 2037.  This will be accomplished mainly through power plant construction and power purchases from IPPs, as well as the use of renewable energy.  Out of 46,090 megawatts of operational electricity capacity at the end of 2017, Thailand plans to retire 25,310 megawatts during the operational period of PDP 2018.  This means, by the target year of 2037, Thailand must add 56,431 megawatts of new capacity to the current deployment.  According to the new energy plan, Thailand proposed to achieve carbon neutrality by 2065-2070 that could see renewable energy account for a 50 percent share of its new power generation, displacing natural gas, which is currently the mainstay of its power generation sector.

Both the PDP 2018 Rev. 1 and the AEDP 2018 initiative create market opportunities for electric power generation equipment using conventional fossil fuels, renewables, and alternative energy.  In addition, Thailand will focus on smart grid infrastructure network development.  From the total 18,696 MW of planned renewable energy, solar is expected to deliver 9,290 MW, including floating solar of 2,725 MW.  Around 1,933 MW will be developed through community-based power plants (from biomass, biogas, wastewater, and solar hybrid systems).

Thailand has a high potential of refocusing its energy mix toward renewable sources.  With high solar irradiation and an abundance of bioenergy potential, renewable energy is projected to be 21 percent of the total energy production and more than 30 percent of the installed capacity mix by 2037.  The country also has a high potential for biopower, arising from an abundance of feedstock resources for biomass, biogas, and biofuels.  Energy experts anticipate that these energy sources will see rapid growth and support from the government to power the renewable energy transition.  Regarding the new renewable energy capacity, there are four significant renewable energy targeted efforts: solar, biomass, EGAT hydro-floating solar, and community power plant by biogas, biomass at 8,740, 2,780, 2,725, and 2,453 megawatts, respectively.

Thailand is currently carrying out pilot projects for the development of an advanced grid system to better manage the grid with the introduction of renewables.  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 to allow households to generate and store electricity and then sell excess electricity back to the grid.  With this effort, the development of pilot smart cities is being considered to evaluate the potential of expanding this structure nationwide.

About conventional sources of energy (as Thailand’s domestic gas reserves will likely dry up in the next ten to 20 years), liquefied natural gas (LNG) will play an important role in ensuring mid-term electricity security.  With approximately 60 percent of electric power in Thailand currently generated from local natural gas, 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 34.8 million metric tons per year by 2027.

Although the growth of energy and electric power demand in Thailand has slowed due to the global economic downturn and the pandemic impact, the power sector remains relatively attractive.  The Thai market continues to demand electric power generation equipment using various types of fuels.  The energy industry is important to Thailand as the country strives to achieve economic growth while maintaining energy security with a minimum of 20 percent in power reserves.

Leading Sub-Sectors

• Renewable energy equipment
• Smart grids/microgrids
• Energy storage system: battery energy storage system (BESS)
• 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 up toward a sustainable energy transition.  The country needs to adapt to new technologies in the energy sector, and energy efficiency is not only for large corporations anymore.  According to the Permanent Secretary of the Ministry of Energy, the following developments will lead to disruption in the energy sector: digitalization, decarbonization, decentralization, deregulation, and electrification.

Three main themes for energy in Thailand are:

1. Energy for All Renewable Scheme:  The Ministry of Energy was instructed to formulate an “Energy for all” policy to support the public as well as raise the level of the country’s competitiveness.  The PDP 2018 Rev. 1 has raised the proportion of renewable energy such as solar, biogas, and biomass through community power plants.  The overall target under the scheme is around 1,000 MW by 2023.  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, part of digitalization, targets support of grid connections in Southeast Asia.
3. Regional LNG Trading Hub:  The Ministry of Energy has been pushing forward 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 had signed an agreement worth $1.33 billion with the Gulf MPT LNG Terminal Company selected to build the country’s third LNG import terminal.  Commercial operations are slated to begin by 2025.

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) 2022 will play a significant part in Thailand’s move toward green and clean energy with an aggressive plan and measures to reduce carbon emissions toward the goal of carbon neutrality between 2065 and 2070.  Reaching carbon neutrality will require 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) by the 30:30 policy, which means Thailand will build 30 percent of domestic EV production by 2030.  U.S. companies could potentially play major roles in these efforts as advanced know-how and technology suppliers. 

Table: Thailand’s Overall 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)